In the past month, we have gotten the same question from about 1/2 a dozen of our clients. Each one was considering an online advertising program from another company in their industry and was looking for a way to determine whether it was a good deal for them or not. Before that question can really be answered, there is one piece of data that each business owner needs to make a sound decision:

How Much is Each Visitor to Website Worth to the Business?

This isn’t a common metric that you can measure with a web site stat tracking program - it is different for every company.  There are 3 steps you can take to determine the value of every visitor to your website:

1. Determine how many sales were generated from your website over an extended period of time (the longer the better). For example, if you are a painter, how many new clients found you because of your website?  If you’re not sure, you need to make sure you ask new clients where they found you.  If you don’t want to do that, you can add a call-forwarding number to your website that goes directly to your office line. You can then review the reports from the service to determine if new clients came from the web site.
2. Calculate how much profit was generated from these sales. If you sell pool tables and you sold 15 pool tables to people who found you on the web and the average profit for each pool table you sell in your business is $1000, you generated $15,000 of profit from your website.  Make sure you use profit and not just revenue.
3. Find out how many visitors came to your website over the time you’re examining. Every web site should have some sort of visitor tracking component.

Let’s say that you had 20,000 visitors to your website over the period when you sold 15 new pool tables.  You can divide your total profit ($15,000) by your total number of visitors (20,000) and get an average visitor value of $0.75.

What Does the Average Visitor Value Mean?

Once you get this value, almost every decision you make for your website can be based on the average visitor value. If someone has an advertising option that will bring you qualified visitors to your website for $0.50 a visitor, you should take it.  If they send you 15,000 visitors, it will cost you $7,500 in advertising but you will make $15,000 in profit.  So you will have gained about $7,500 of profit because of this new source of visitors to your website.

You can also use the value to determine the effectiveness of your website. Your goal should be to increase the average value of each visitor. You can do this through several means:

• Increase the Conversion Rate - more visitors buying more stuff
• Attract More Qualified Visitors - visitors more likely to buy your product/service
• Increase the Average Profit Per Sale - through higher value products or lower costs.

Once you have this basic information about your website, you can feel comfortable that you have the knowledge to help you make any decision regarding the site.

If you enjoyed this post then make sure you subscribe to our RSS feed.