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How can you optimise your website's profitability and ROI?

How can you optimise your website's profitability and ROI?

Published on: 6 June 2023 - Updated on: 7 August 2023 - Read 317 times - Reading time:  3 minutes


What is ROI?

ROI, or Return On Investment, is an indicator that measures profitability of actions taken on a site, whether marketing actions or not.

The calculation of ROI allows you to know if the marketing efforts and investments made, for example, business application developments, have generated profits or losses.

In theory, it seems simple, but in practice, the calculation is a bit technical. If you manage an e-commerce site, you will only need to compare revenue and initial investment to know if you are making a profit.

It's when you have to calculate the profitability of a non-commercial site that everything gets complicated. The reason is that these sites do not sell physical items but carry out a series of actions to encourage users to download, subscribe to the newsletter, or better use the dedicated intranet or business application. Here again, we calculate the ROI, but the approach will be more technical.

How to calculate ROI?

The formula for calculating ROI, the general rule is as follows:

how to optimize the profitability of your website and its roi: the roi calculation formulaThe calculation of ROI in percentage is the result of the ratio between investment costs and profitability multiplied by one hundred.

 

So for a merchant site, the calculation is simple to do, here's an example to help you understand:

Before establishing a new SEO strategy, your online store recorded 1000 euros in sales. You decide to launch a new campaign and invest 500 euros. A few months later, the site records a turnover of 3000 euros, or 2000 euros more than before the SEO campaign. Your ROI will then be (2000 - 500) / 500 x 100, giving you 300%.

Another example, that of an investment in the development of a business application: before the development of the dedicated application, the management of registrations for a school took about 1600 hours of work over the year, or the equivalent of full-time (about 21000 euros for an annual minimum wage including charges). The school invests 12000 euros in the development of a dedicated application, and, after the delivery of this application, the annual processing time for registrations has dropped to 301 hours, a 75% reduction in processing time! (Figures given by our client on 12/31/2021) The ROI is therefore considerable since he paid off his investment in the first year by gaining three-quarters time that he could use on other more lucrative tasks.

In other words, the efforts made are often profitable, and the ROI, by allowing you to measure the effectiveness of your actions, helps you develop even more effective strategies such as a new version of the application or another application.

Practical Exercises

Now that you have read this article, and to thank you for going all the way to the end, let's move on to the practical exercises 😊 No matter what site you have, you are entitled to question its profitability. Are you ready? Then let's go..

The Questions / The Steps

In the quiz below, read the question and try to answer it. These questions can help you get an overview of the performance and profitability of your site, based on key indicators and measures specific to your case. Don't have all the answers or still don't know how to do it? We will help you by giving you the steps to help verify or find the answers to these key questions about site profitability.

  1. What is my site's ROI? Have you calculated the Return On Investment (ROI) for your marketing actions and investments in development, and is it positive? 

  2. How has the revenue changed after investments in marketing or development? An increase in revenue may indicate that the efforts are profitable.

  3. What is the cost-effectiveness compared to gains? Comparing initial costs with obtained benefits, such as the reduction of processing time in the case of the business application, may indicate profitability.

  4. Is there continuous growth in conversions and sales? For an e-commerce site, growth in sales and conversions can be a good indicator of profitability.

  5. Have the efforts and investments allowed us to reach or exceed the set goals? Meeting or exceeding goals may be signs that the strategies in place are profitable and effective.

These steps will help you understand if your efforts on the site or if your developments are profitable. Remember that a combination of quantitative and qualitative analysis, using both numerical data and an evaluation of the context, will often be the most effective.

Article updated on August 4, 2023

Eric Lamy
Bio rapide : Après avoir passé plus de 20 ans dans le marketing et l'optimisation de Système d'Information, j'ai créé l'agence Agerix en 2009 afin d'avoir une approche des projets tout aussi commerciale que technique. Fouiller, creuser, réfléchir et amener le projet au plus haut niveau qualité, c'est le Leitmotiv de notre bureau d'études et l'ADN que nous insufflons chaque jour dans nos projets. Que ce soit pour nos développements, nos projets d'intégration, ou même l'article que vous venez de lire, notre but est de livrer le meilleur.