is your website a cost or an investment?

11.12.2008
view your website as an investment not a cost

The way you think about your website can be the difference between the success or failure of the online strategy. A simple shift in expectation is all that is needed to turn a business cost in to an investment with a return.

Is your website a cost or investment?

How you think about your website can be the difference between success or failure online. A simple shift in expectation is all that is needed to turn a business cost into a fantastic return on investment.

How? Read on …

  • Definitions

One definition of an investment: To Risk money in the hope of gain.

One definition of a business cost: Something that costs money that you need in order to carry out your business.

Both result in spending money, only one has the expectation of providing a gain, seeing your website as an investment. Thinking of your website as providing some sort of gain, creates the air of expectation that there will be a return on the Investment.

  • Return on investment

If, for example, the website cost £5K initially and £1K a year to run — how do you know what return has been made on that investment?

To calculate the ROI the following assumptions must be made.
• The site is regarded as an investment not a cost
• For this example lets assume an average of 25% of new leads are generated
• Each sale is worth an average of £1K profit
• The site then generates just 2 new leads a month.

This would mean the site would…..

Pay for itself in the first year and make £5K a year from year 2 onwards.

  • Building on your Investment

The real benefit of the Investment mindset means you can now do two things:
a. Set Objectives for your website
b. Review Performance against these objectives

Setting objectives makes the expectation stronger. If you know you can make the website pay for itself in one year with two sales leads per month, raise the glass celing of your expectations by setting a target of four or eight sales leads per month.

Set big goals, most people set low goals because they limit them to what they see as realistic. If you miss your goal, you learn something, if you hit your goal you learn something and you reap fantastic rewards.

Review your website performance against your objectives and use what you learn to get closer to your goal. Just measuring your performance will usually increase what you achieve by 10%. Take some positive action will almost certainly move you towards your goal more quickly.

I hope you´ve taken time to scan through this article, and more importantly you´re able to get your website moving in the right direction.

Meanwhile, Happy Hunting!

 

 

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