I put an Excel spreadsheet together for a client to use to estimate the potential return on investments from further improvements of the conversion rate on their web site.
You can download load it. I think it’s pretty simple to use and can be used to estimate ROI from many types of campaigns.
Here’s an explanation of the columns etc –
Visits In period: To the estimate potential ROI from conversions from all sources of traffic insert the number of visitors (ideally unique visitors if available) from your web site stats/reports or from site analytics .
Or if you have the approximate number of conversions from a particular source of traffic, AdWords or an email campaign for example, then you could insert the number of visits (or “click-throughs” or “message opens” etc) from that source.
Number of Days in period: The number of days in the period is used later to estimate the increase in value from conversions for a year (which of course doesn’t apply to all sources of traffic such as email campaigns).
Approx Conversions: The approximate number of conversions, whether it’s a single conversion goal, such as onsite purchases or lead inquires, or a total of two or more conversion goals.
This number could come from Analytics or PPC conversion tracking for example, or it could come from an actual count of conversions from the web site. Or it could be just a rough guess.
Conversion rate: The conversion rate will be calculated for you. It’s, Approx Conversions / Unique Visits In period.
Approx value each conversion: This should be an estimate of the value for a conversion to you. It could be the immediate revenue or gross profit for an online sale, or the estimate of first year or life-time value of a new customer etc. For lead generation you’ll need to figure your approximate leads to sales number to get the estimated value (See the posts mentioned below for more on this)
Approx value of conversions: This will be calculated for you. It’s, Approx Conversions X Approx value of each conversion, i.e. the total value of the conversions during the period.
What if improve conversion rate to: Enter a “what if” value here to see the effect of improving the conversion rate to this amount.
The Results Columns –
Then Approx conversions: This column will be calculated. It’s the approximate number of conversions that would have resulted if the conversion rate had been improved to the “what if” conversion rate.
Then Approx value of conversions: This column will be calculated. It’s the approximate value of all the conversions that would have resulted if the conversion rate had been improved to the “what if” conversion rate.
Approx Increase in conversion value for Period: This will be calculated. It’s the approximate additional value you would have seen from the additional conversions in the period.
Approx Increase in conversion value for 1 year: This will be calculated. It’s the estimated additional value you would have seen from the additional conversions over a year (which of course doesn’t apply to all sources of traffic such as email campaigns or may not be valid because of seasonality etc).
Multiple Conversion Goals – You can estimate more than one type of conversion goal. The calculator is set up to accommodate two conversion goals. For addition goals select and copy an entire row then paste into a blank row.
For More Information
- Cost justifying using a Search Engine Marketing Agency to run a PPC campaign. This post was specific to PPC campaign but there’s a technique that can be adapted to most situations.
- Increased conversion rate 300% by redesigning web site using Conversion Point Architecture. Scroll down to the section named ”Estimate the potential ROI from improved conversion rates on your site”
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