Important: Tracking is not 100% accurate, but the figures give a good indication and above all a comparative value.
In today’s digital world, a website is far more than just a business card on the internet; it is one of the most powerful tools in your business arsenal. But despite its importance, many SME owners rarely ask the crucial question: “How much does my website actually contribute to my business?” In this blog post, we’ll get to the bottom of the matter and show you how you can quantify the value of your website, specifically through lead generation and conversion.
A well-structured online presence can be decisive in attracting potential customers and persuading them to opt for a service or offer. But do you know how many customers actually contact you via your website? Do you know the cost of a lead and how many of the prospects will ultimately become customers?
These questions are especially important if you are investing in paid advertising strategies where every click counts. Let’s explore together how you can determine the true value of your website and optimize your marketing strategies accordingly.
While a website can serve many purposes, one of the main purposes for SMEs is to generate leads. A lead is defined as a potential customer who contacts you and shows interest in your service/product.
The value of a lead
To understand the true value of a website, it is essential to know the value of a lead. A “lead” is a person who shows interest in your offer through your website, whether by filling out a contact form, subscribing to a newsletter or requesting a quote. But how exactly is the value of such a lead measured?
Calculation of the lead value
The value of a lead can be determined using a simple but meaningful formula:
Value of a lead = (conversion rate to customer × average revenue per customer)
- Conversion rate to lead: This is the percentage of visitors who become leads. If 100 visitors come to your site and one becomes a lead (contacts you), then you have a conversation rate of 1%.
- Conversion rate to customer: This is the percentage of leads that actually become paying customers. For example, if on average every third lead becomes a customer, your conversion rate is around 33%.
- Average revenue per customer: This is the average amount a customer spends on a transaction. If a customer spends an average of 1000 francs, this is your average turnover per customer.
Assuming your website generates 10 leads per month, and 3 of them become paying customers, with an average turnover of 1000 francs per customer, your calculation will look like this:
Value of a lead = (0.33 × 1000.-) = 333.-
But we can also use it to calculate the value of a visitor:
Value of a visitor to the site = (0.01 × 0.33× 1000 francs) = 3.30 CHF
So if your site has 1000 visitors per month, then the contribution of the website is:
1’000 x 3.30 = 3’300.-
Importance of lead value calculation for Google Ads
This value is particularly important to evaluate the effectiveness of your marketing activities and to ensure that your investment in advertising achieves a positive ROI (return on investment). If the value of a lead is higher than the costs you incur to generate this lead, you are on the right track.
So let’s take a Google Ads campaign
New Google Ads campaign
- Budget: 1,500 francs
- Cost per click: 5 francs
Step 1: Number of visitors
With a budget of CHF 1,500 and a cost of CHF 5 per click, you can attract 100 visitors to your website:
- 1,500 francs / 5 francs per click = 300 visitors
Step 2: Lead generation
Based on the conversion rate to the lead of 1%:
- Of these 300 visitors, 3 visitors become a lead (300 visitors x 1%).
Step 3: Converting leads into customers
With a conversion rate of 33% to the customer:
- Of these 3 leads, one actually becomes a paying customer.
Step 4: Calculating the revenue from this campaign
With an average turnover of 1000 francs per customer:
- The turnover of this one customer is 1000 francs.
Analysis and strategy
In this scenario, CHF 1,500 was spent and the revenue from this campaign through new customers amounted to CHF 1,000. The result is a negative ROI, as the costs exceed the income.
This example underlines that improving conversion rates or average revenue per customer is crucial to increasing the profitability of your Google Ad campaigns. It can also be helpful to optimize other aspects such as target page design, offer design or more specific target group approaches in order to achieve better results.
Measurement and analysis
The ability to accurately measure and analyze the performance of your website is critical to the success of your online business. By using web analytics tools, you can develop a deeper understanding of how visitors interact with your site, where they come from and which pages are most effective at converting leads.
Tools like Google Analytics offer a wealth of data that can help you understand the traffic on your website. This is about more than just the number of visitors. You can see which marketing channels attract the most visitors, how long they stay on your site, and more importantly, what actions they take before they leave. By tracking conversions – whether it’s filling out a form, subscribing to a newsletter or requesting a quote – you can identify which pages and which specific elements on those pages are most effective.
Here are some steps on how to start the analysis:
- Set up goals in Google Analytics: Define specific actions on your website as “goals” to track when they are achieved. This could be filling out a contact form or making a purchase.
- Consideration of traffic sources: Analyze which channels (organic search, paid advertising, social media, email marketing) bring in the highest quality leads. This will help you understand which channels you should invest more in.
- Analyze behavior flow: Examine the path that visitors take on your website. This will show you what content they are interested in and where there may be barriers to conversion.
By regularly reviewing and analyzing this data, you can not only constantly improve your website, but also ensure that your marketing budget is used efficiently. Encourage your team to use these tools and conduct regular data reviews to ensure your website is contributing optimally to lead generation and customer acquisition.
At Wundernetz, we use Google Tag Manager in conjunction with Google Analytics as standard. We define the submission of forms, the sending of e-mails or the clicking of a telephone link as target events that appear in the monthly report.
Conclusion
Now that you understand the importance of accurately measuring and analyzing your website, it’s time to take action! Start using or optimizing your web analytics tools to get the full value of your online presence. Here are some concrete steps you can take to get started right away:
- Use Google Analytics on your website: If you’re not already using an analytics tool, now is the perfect time to start. Google Analytics is free and offers extensive insights into the behavior of your website visitors.
- Review and update your goals: Make sure your goals in Google Analytics are up to date and reflect exactly what you want your visitors to do. This could be filling out a contact form, registering or completing a purchase.
- Analyze your data and adjust your strategy: Use the data you gather to see what works and what doesn’t. Refine your content, offers and marketing campaigns based on these insights.
- Invest in successful channels: Increase your investment in marketing channels that generate the most quality leads. Be it through optimization of your SEO, stronger engagement in social media or more targeted paid advertising campaigns.
- Carry out regular reviews: Schedule regular appointments to review your analysis results and adjust your strategies accordingly. This keeps your website dynamic and responsive to changes in your market or customer behavior.
Take the initiative now and start revealing the true value of your website. Improve your conversion rates, increase your sales and build a stronger connection with your customers. Your online success is waiting for you!
