Website Costs: Understanding and Budgeting One Time and Recurring Costs
To measure your website’s value to your business — your return on investment (ROI) for the time, effort, and money you put into it — you need to track the cost of building and maintaining your website and compare that amount to the revenue your website generates for your business over time. Begin by asking yourself the following questions:
- What needs to be done to design and build your website?
- What needs to be done to populate your website with content on a regular basis?
- What needs to be done to promote your website on a weekly, monthly and annual basis?
- What needs to be done to keep your website bug and hacker free, up and running, and always available for your target audience?
Depending on the complexity of your website, the platform you decide to build your website on, and the skills you and your team possess, you may be able to reduce costs by completing some work internally but to calculate your website’s return on investment accurately, you need to include the cost of internal work as well. Create a spreadsheet to track your setup and ongoing costs — be sure to include both internal costs and external costs, including:
- Hard costs – actual financial outlay for creative, technical and support service providers, hosting and assets such as stock photography, audio tracks for video editing, and even paper, pizza, stick notes and pens for planning meetings
- Effort costs — time spent by you and your team on research, planning, design, building, launching and maintaining your website
On your spreadsheet, record all one-time and recurring hard costs. For effort costs, but sure to record the number of hours spent by you and members of your team, the hourly cost of that effort to your organization, and the total cost of all internal efforts. Common one-time costs include:
- Logo design
- Font and brand color selection
- Graphic design including page mockups, product illustrations, product and service photos, diagrams, infographics, team profile photos, etc.
- Hosting setup
- Website content management installation and configuration
- Theme and specialty plugin fees for page builders, e-commerce shopping carts, shipping calculators, payment processing, events calendar, price list displays, membership management, landing page builders, SEO management, form builder, mailing list builders, etc.
- Content posting and proofing before launch
- SEO meta tag and description writing, editing, and posting
- Social media account setup on Facebook, Twitter, LinkedIn, Instagram, Pinterest, etc.
- Email account setup
- Website hosting account setup
- Google Analytics account setup
- Email list platform account setup
- Social media post scheduler account setups such as Hootsuite or Tweetdeck
- E-commerce payment processing account setup such as PayPal or Stripe
- And more
Common recurring costs include:
- Monthly web hosting
- Monthly email hosting such as Gmail for Business
- Monthly SEO and marketing services
- Month mailing list hosting and email blast sending platforms such as MailChimp
- Monthly social media post scheduling platforms
- Monthly website maintenance of themes, plugins and CMS updates
- Website security, debugging and restoration services such as Sucuri
- Daily, weekly and monthly offsite file and database backups
- Monthly e-commerce transaction fees
- Annual domain registration
- Annual SSL certificate fees and maintenance
- Social media post writing, editing, and posting
- Blog writing, editing, and posting
- Product and service description updates
- Google analytics review and analysis
- Customer support
- Pre-sales support
- After-sales follow up and support
- Returns and refunds support
- Mailing list review and maintenance
- And more, depending on your website’s size, complexity, and your ongoing marketing needs
To develop an accurate return on investment measurement, you’ll need to understand and track every hard cost and effort cost required to build, launch and maintain your website.
Reduce Costs, Maximize Revenue
Tracking your costs can also help you eliminate unnecessary items and activities.
- To maximize revenue, minimize costs and save time, only engage in activities and pay for products and services that help your target audience decide to buy your products and services
Once you’ve created your tracking spreadsheet, review the details, consider each cost you are committed to spending time or money on and ask the following:
- Will spending time and money on this activity, product or service help my target audience better understand how my products and services solve her problem?
- Will spending time and money on this activity, product or service help my target audience more clearly see that my products and services are better than those of my competitors?
- Will spending time and money on this activity, product or service help my target audience more easily purchase my products and services, or contact me to find out more about them?
If the answer to any of these three questions in relation to the activity, product or service is ‘NO,’ set the activity, product or service aside and move on to the next item. Don’t waste time on distractions. Focus on results. Why?
- If the product, service or activity you are considering spending time and money on does not help your target audience better understand how your products and services solve her problem, it serves no purpose; it will waste her time, and result in her leaving your website to find your competitors.
- If the product, service or activity you are considering spending time and money on does not help your target audience clearly see that your products and services are better than those of your competitors, it encourages her to shop around, off your site, and she may never come back.
- If the product, service or activity you are considering spending time and money on does not help your target audience easily buy your products and services or contact you to find out more about them, it will slow down and potential stop the conversion process, rather than greasing the wheels and ensuring that your customer follows through with a purchase.
Your website’s job is to make it easy for your target audience to:
- Solve his problem
- Trust that your solution is the best
- Buy your products and services
The goal here is to ensure you think realistically about the full range of hard costs and effort costs that go into setting up and operating your website, starting from the beginning of development, to launching your website and beyond. By reviewing costs and eliminating unneeded activities, products, and services, your website return on investment will improve dramatically. Our Lean Web Canvas Online training course can help you put costs into perspective with many other elements of your website. Take our Lean Web Canvas Online Training Course
Showcasing Your Products And Services
Three Key Elements
Answer the following 3 questions to start creating a description of your primary product or service.
- What is your product or service name – does it include one or more terms related to the problem it solves or the solution it provides? If not, why not?
- How would a member of your target audience describe the problem she is having, the reason she is searching for your product or service online?
- In 25 words or less, describe exactly how your product or service solves the problem – use an example from a real customer.
You can repeat this exercise for additional products and services, but for now, focus on the product or service that solves the biggest, most urgent problem your customer has.
Up next, Exploring New Website Revenue Opportunities – a discussion of selling products and services on your website.