Tool for Calculating the ROI of Website Optimization

 

A very useful tool in planning GWO experiments is the ZAAZ ROI Calculator, found on the ClickZ.com website. It’s exceptionally easy to use and can be very illuminating.

 

 

You simply enter:

• Average visitors per month
• Average success events per month
• Average value of a success event

Then you enter estimates of:

• How much you can improve traffic, and
• How much you can improve conversions

Finally, you enter the estimated cost of optimizing the page. Once you’ve entered this information, the tool tells you the following, both monthly and annualized:

• Current value of the page
• Estimated future value of the page
• Incremental value
• Incremental success events
• Return on Investment

Results are presented both graphically and in a table:

 

 

Naturally, it can be difficult to predict how much you will be able to increase traffic and/or conversions by. But that’s okay, because the tool is so quick and easy to use, you can enter a wide range of variables and end up with a useful range of predicted outcomes.

I did spot one little mistake in the instructions. When you roll over the “more info” icon beside the “Increase conversions by X%” field, the pop-up tells you to enter any percentage between 1% and 100%. Same thing with the “Increase Traffic” field:

I thought this was odd, as I might not actually be increasing traffic in an experiment, yet the tool insists I must increase it by at least 1%? And why limit my increase in conversions to a “mere” 100%? (Hey, I’m an optimist.) At any rate, it was all moot because the tool will in fact accept any value.

This tool can be very useful in helping you:

• Decide which page to conduct an experiment on, or
• Convince a decision-maker of the potential ROI of testing

Sure, it would be easy enough to make such calculations yourself. But the beauty of tools like this is that they allow you to quickly enter a whole range of values and see what the outcome would be.

This can come in handy if, for example, you’re concerned that your development costs are likely to wipe out any advantage of optimization. With this tool, you can simply enter your predicted development costs. Then you can quickly calculate what lift you will need to make the changes pay off within a reasonable timeframe. If it turns out that a 5% lift will pay off, it’s likely worth moving forward. If a 75% lift will be required, you may decide that optimizing the page will never pay off and you can focus your efforts elsewhere.

A very handy tool, well implemented.