How To Accurately Measure Your Website’s ROI

Most business expenses are relatively predictable. A decent laptop typically runs a couple of thousand dollars, and your rent is the same every month. But a website is much more of a wildcard. While many businesses pay less than $10,000, web development agency projects cost an average of $66,499. 

The thought of paying six figures for a few pixels might make you queasy, but cost isn’t the only factor to consider. You also need to think about your site’s return on investment (ROI). This figure calculates how much profit you’re actually gaining from your website. 

Depending on the ROI, a website could be a great investment — or a huge money pit. Figuring out which category your site falls into is key to boosting your profits. But businesses often struggle to measure their returns. 

Get practical tips for tracking and boosting website ROI from two expert marketers.

What Is Website ROI and Why Does It Matter?

Website ROI measures how much value you gain from your site versus how much you put into it.

Businesses often assume that just having a website is enough for success. After all, if you build it, they will come, right? Not always. Many factors can impact a site’s effectiveness — like sluggish loading times or a bewildering checkout process. Tracking ROI helps you spot these issues so you don’t miss out on sales. 

Of course, it’s not all about money. Web ROI can also measure intangible benefits, such as improved lead generation and brand awareness. That way, you can make sure your site is actually meeting your long-term goals. 

Monitoring ROI can help you make smarter decisions, too. When you understand your site’s value, it’s easier to allocate resources. If your ROI is gradually dropping, for instance, you might invest in a website redesign to get back on the right track. 

How To Calculate Website ROI 

While you can use a website ROI calculator, the formula is pretty straightforward: 

Website ROI = (Revenue - Investment) / Investment x 100

Say you don’t want to design it yourself — HTML is your nemesis — so you hire a freelancer for a cool 10 grand. Then you spend $300 for a year of hosting and drop $20,000 on content marketing so your site’s not empty. That brings you to $30,300.

Your bank account is feeling a little lighter, but not for long. That first year, your online shop makes $40,000. Your ROI would be: ($40,000 - $30,300) / $30,300 x 100 = 32%. Not a bad payoff. 

Plus, your ROI could be higher in year two because you’ve already paid for the site design. 

How Much Does It Cost To Run a Website?

If you’ve ever scoped out agency prices, you already know that web design is typically the most expensive part of setting up a site. If you’re tech-savvy, you could theoretically handle this task yourself for free (or, more accurately, whatever your time is worth). 

But this isn’t the time to DIY. You need a professional who’s well-versed in all the nitty-gritty details of building a site. Of course, this expertise will cost you. According to Clutch, web development agencies typically charge $25 to $49 per hour. 

Don’t forget to factor in ongoing costs, such as:

• Domain name: Up to $30 annually
• Hosting: $0 to $300 or more
• Maintenance: $200 per year
• Software subscriptions: A few dollars to hundreds per month 

These expenses vary by industry. If you have a small business, you can probably get by with a simple website, as long as it has a built-in shop. Meanwhile, an e-commerce giant or SaaS company may spend thousands on hosting and software subscriptions.

How To Effectively Measure and Track Website ROI

While the web ROI formula itself is simple, monitoring ROI is a little more complex. Get started with these four steps. 

1. Identify Sources of Revenue

When you hear the word “revenue,” your mind probably immediately goes to sales. But don’t forget about other sources of income, such as lead conversions and subscriptions. 

2. Ensure Proper Attribution Models for Accurate Tracking

Don’t assume that your website is doing all the heavy lifting. Customers may come across your brand a few times before they finally follow through with a purchase.

“Businesses often struggle to track exactly where revenue is coming from,” explains Veronika Nedashkovskaya, Head of Content and Comms at Rocketech. “Someone might see an ad today, visit next week, and buy a month later. Which channel gets the credit in this case?”

Attribution models help you measure the impact of each touchpoint. That way, you’re not skewing your ROI by giving your website too much — or too little — credit.

3. Essential KPIs for Measuring Website ROI 

It’s always nice to see your traffic and sales growing. But they don’t tell the full story about your website’s performance. 

Nedashkovskaya recommends tracking several metrics related to revenue, including: 

• Conversion rate
• Customer acquisition cost
• Customer lifetime value
• Revenue per visitor 

“These tell you if your website is actually making money, not just generating traffic,” Nedashkovskaya notes. For instance, if you’re attracting more visitors but your conversion rate is low, you might need stronger calls to action. 

4. Track Website ROI With These Recommended Tools

Your ROI website is only as accurate as the numbers you use to calculate it. As Nedashkovskaya puts it, “If data is missing or inaccurate, you’re flying blind.” 

There are plenty of tools to help you measure KPIs and attribution, such as: 

• Ahrefs
• Hotjar
• Google Analytics
• CRM parameters
• Urchin Tracking Model (UTM) parameters 

Of course, you also need the right people to “pull the data together and make important decisions,” observes Colby Flood, Founder at DataAlly. If you’re not an expert number cruncher yourself, you may need to hire a data analyst or train your existing staff. 

“For direct-to-consumer marketing, understanding the website add-to-cart rate and checkout-initiated follow-through uncovers why a website's ROI is high or low,” Flood continues. “We built this calculator to understand the website's metric and how improvements would impact ROI.”

Best Practices for Measuring Website ROI Accurately 

Miscalculating ROI is almost worse than not measuring it at all. Overestimating can lead to false confidence, while underestimating just stresses you out. These practices will help you get it just right. 

Define Clear Goals

Sure, everyone wants to earn more money. But you should have more specific goals for your website that fit your larger business plan. Here are a few examples: 

• Attract 600 unique visitors each week
• Increase brand awareness by 10% this quarter
• Boost conversion rates by 25% by November 

Use these objectives to decide which KPIs to pay attention to. 

Don’t Focus on Vanity Metrics

Make sure the metrics you’re tracking actually matter. “A lot of businesses obsess over vanity metrics like page views or bounce rates,” Nedashkovskaya explains. “But those don’t always translate to revenue.” 

“The real question is: Is the website turning visitors into customers, and at what cost?” Nedashkovskaya adds. For example, if you have thousands of visitors each month but few sales, your messaging might be off. 

Be Patient With New Websites 

Don’t expect your site to become an overnight sensation — or break even for the first few months. 

“One of the key issues businesses face is understanding the value of their website with the longer sales cycle,” Flood says. “Many of the ROI metrics don’t show as an immediate payoff because customers go through a long sales process.” 

Give your new website at least three to six months before you try to analyze it. In fact, it’s not even worth obsessing over the data until then. 

Consider Customer Feedback 

Up until now, this article has mostly focused on cold, hard data. But don’t forget to check in with your customers. As Nedashkovskaya puts it, “Data tells you what is happening, but user feedback tells you why.” 

“If data shows a problem and user feedback explains it, you know exactly what to fix,” Nedashkovskaya continues. “However, businesses that rely only on numbers risk making the wrong changes.”

For example, analytics might show that your customers tend to drop off once they reach the checkout page. Based on just this data, you might assume that there’s something wrong with the page itself — maybe clunky formatting or an expired security certificate. 

However, heatmaps may tell a different story: customers get confused by unclear pricing. This revelation can help you get to the root of the problem instead of throwing money and time at the wrong thing. 

Account for Seasonal Fluctuations 

While it would be nice if ROI only went up, that’s often not how it works. “It’s vital to remember that ROI isn’t static but changes with trends, seasons, and events,” Nedashkovskaya explains. “Looking at raw numbers without context can be misleading.” 

During the holidays, you might pour more resources into ads. That can make it seem like ROI is lower, even if revenue has actually increased. Nedashkovskaya adds, “Seasonal dips aren’t always bad either: Lower conversions might come with more email signups, leading to future sales.” 

Comparing similar time periods can help you see the big picture. If your ROI dipped in Q1 this year and the year before, it’s probably just a seasonal trend.

Regularly Update Cost Inputs

Like doing your taxes, ROI shouldn’t be something you only look at once a year. Stay on top of your paperwork so you can always check your performance with minimal hassle. 

Use a spreadsheet to track all your related expenses, including: 

• Content creation
• Paid advertising
• Ongoing web development 

Consider Customer Retention and Repeat Customers

While you appreciate all your clients, they’re not all created equal. Repeat customers will always bring more value to your business through sales and word-of-mouth.

Additional Reading to Enhance Your Website's ROI: "How To Increase Your Website's Conversion Rate (Free Checklist)"

How To Interpret Your Website ROI Results

Understanding web ROI isn’t rocket science. Positive ROI means your website has earned more than you put in, while the opposite is true for negative ROI.

Research industry benchmarks to see how your ROI compares to others. But use common sense, too. If you just invested thousands in a website redesign, it may take a year or two to earn a positive ROI. That doesn’t mean your website is a failure. 

When To Invest in a Website Redesign 

Your website might be costing you more than it's worth if: 

• You have a negative ROI for several quarters.
• Your traffic is down.
• You’re spending more money on maintenance and repairs. 

Sound familiar? It might be time to refresh or redesign your site. Browse Clutch’s directory of web designers to find reputable professionals. 

Take Action To Improve Your Website ROI 

Some sites are incredible marketing tools that rake in the profits. Others are money sinks, costing much more than they earn. Calculating website ROI will help you figure out how you stack up. 

If your site just isn’t getting results, it’s time for a website audit to pinpoint the problem. Or get in touch with a skilled web designer to help you reimagine your site.
 

About the Author

Jeanette Godreau Senior Content Marketing Specialist at Clutch

Jeanette Godreau crafts in-depth content on web design, graphic design, and branding to help B2B buyers make confident decisions on Clutch.  

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