Measuring the Value of a Site

From the previous discussion, it is obvious that for most companies, Web sites cannot be successful sales channels to consumers for most of their products. They are primarily ordering vehicles and information providers. They may be excellent sales channels for spare parts and supplies and for obscure and slow-moving items that dealers will not stock. To think properly about the role of the Web site, we must begin to think of it as a cross between mass media ads, spare parts distributors, and customer service. The value of a manufacturer’s consumer Web site today is estimated in Table 3-1.

Table 3-1 : Monthly Value of a Commercial Consumer Web Site

	Customers	Rate	Value
Visits per month	500,000	$ 0.02	$ 10,000
Customers registered	20,000	$ 1.00	$ 20,000
CSR time saved	50,000	$ 4.00	$ 200,000
Data printed	40,000	$ 2.00	$ 80,000
Rebate certificates printed	25,000	$ 2.00	$ 50,000
Certificates redeemed	15,000	$64.00	$ 960,000
Parts sold	8,000	$12.00	$ 96,000
Total value			$1,416,000

Let’s start one step up from the bottom:

• Parts sold. Every Web site should sell spare parts and replacement items that dealers will not or cannot stock. These parts are not a profit center. They are a reason for consumers to visit the site. They can be the most important draw on any site and can turn existing customers into advocates. To determine the value of parts sold, we have to consider three factors:

  • The profit made on the parts themselves, which may be quite low, depending on how you want to price them

  • The acquisition of a customer name and email address, which can be valuable for marketing

  • The goodwill and brand name publicity value of the site

• Certificates redeemed. To determine the value of these certificates, we need to consider the profit from the sale of the item less the rebate and fulfillment costs. If the profit, for example, is $80, we must subtract $15 for the certificate and $2 for the fulfillment cost, giving us $63 net profit. To be totally accurate, you can make the assumption that some of your products might have been sold to these same people without the certificate, so that the profit from the sale that is attributable to the Web would be less than the full profit. You can experiment and test to get the right answer.

• Certificates printed (whether redeemed or not). There are two benefits of having a certificate printed. First, of course, is the fact that some of the certificates will be redeemed, which has already been discussed. But whether a Web certificate is redeemed or not, it has value to the issuer, because before the certificate is printed, we require a valid name, address, and email name. To determine the value of a name, we can use the method described in Chapter 5, “The Value of a Name.” Here we are assuming that it is $2.

• Data printed. When people go to your Web site, you make it easy for them to find information and print it out on their PC printers. Make sure your name and identification is on everything that they print. People who are looking for a refrigerator may print out information from your site and take it with them when they visit a store. They will print out the specifications of your automobiles, your swimming pools, and your condominiums. This is wonderful! It’s great advertising to have detailed information on your products in the hands of people who are about to make a purchase. This is worth a lot of money to you, and it is much cheaper than mass marketing, where you pay for ads that millions will not read or listen to.

• CSR time saved. One important function of your Web site must be to reduce the time that your customer service reps spend explaining things that are more easily read and printed by customers. Put thousands of pages of information on your site free. Provide a super search engine so that anyone can find anything in three clicks. Measure your success by hours of time saved by customer service reps at $4 per telephone call. Encourage your CSRs to get customers to do the research themselves.

• Customers registered. Of course you want customers to register if they come to the site. Most of them won’t, of course, but many will. You can follow up with an email thanking them for the site visit and answering any questions that they posed when they registered. Why is registration worth money? Because you will use the email names that they give you to send marketing messages to in the future.

• Web visits. There is value to a Web visit, whether or not the consumers who visit print data or certificates. Your Web page is, after all, an advertisement. We can assign a value to this, just as we do to TV, radio, or print ads. We are assuming that a Web visit is worth $0.02.

• Total value. Assigning a total value to a Web site is important. It permits you to decide how much to spend on the Web site, and it lets you budget for the staff that is maintaining it.

If you do a good job of designing your Web site, it will capture many customer names every month. These names may be used for marketing programs. In this example, the total value is $1.4 million per month. Your site may not be as valuable as this, but you can use this table to estimate the benefit of your site to your company. It is probably worth more to you than you thought.