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How can I
calculate ROI for my Web site?
While it's difficult
to measure ROI when a company sells on the Web and through
other channels, Jakob Nielsen offers suggestions for what
to track to determine if your site's a success.
From: Inc.com
| October 2001
Internet in Business
Mentor Jakob Nielsen responds:
Measuring Return
on Investment (ROI) for a traditional e-commerce site --
a company that exists only on the Web -- is rather simple.
Calculate the investment by asking, "How much does it cost
to run the company?" and calculate the return by asking
"How much did I sell?" Article Tools Interactive Directory
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Companies The difficulty in measuring ROI takes place when
a company sells on the Web and through other channels. Customers
may browse on the Web but buy retail.
A Web site may
contribute to an off-site sale -- the user looks at what's
available, the price, customer reviews -- but buys elsewhere.
Trying to determine how much the Web contributed to a purchase
is a nebulous situation.
A company with
strong on-site customer support offers good potential for
ROI. In practice, customers prefer to find answers on their
own rather than contact customer service, but most sites
are designed so poorly that answers are difficult to find.
While a Web site can't solve every problem, if you can minimize
the number of support calls you're receiving, the customer
is happy and you save money. And, a company that is always
there for its customers generates repeat business. Ways
to track ROI: Track leads.
Ask clients why
they bought and how they heard of you, in person or through
surveys. Track where leads come from as well as how many
leads are converted to sales. Track advertising. Advertising
on the Web is measured through click-through rates. However,
a good rate does not always mean an increase in business.
It's easy to get a high click-through rate if, for example,
you offer a freebie. But keep in mind that those who take
you up on such offers are not necessarily people you want
to, or will, do business with in the future.
A good way to
measure ROI through advertising is to install cookies to
determine which ads bring customers in and should get credited
for conversion. Track Web traffic. Track Web traffic to
determine the number of unique visitors coming to your site
and how many of them turn into loyal, repeat users. Is the
information on your site so good that users are getting
to the product page?
Determine how
many users navigate through your site and actually read
about your product, and you'll know if your site is working.
Do an online survey of a few users once they get to the
product page. Ask, "Did you find what you are looking for?"
"Is the information we provide helpful?"
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