Website redesign ROI calculator

How the number is worked out

Enquiries are visitors multiplied by the visitor-to-enquiry rate. Customers are enquiries multiplied by the enquiry-to-customer rate. Revenue is customers multiplied by the average deal value, and gross profit is that revenue multiplied by the gross margin. The monthly figure is gross profit less the running cost. Payback in months is the build cost divided by that monthly figure. First-year return is twelve months of the monthly figure less the build cost, divided by the build cost plus twelve months of running cost.

Benchmarks worth comparing against

A worked example, with the arithmetic shown

A professional services firm is quoted $12,000 for a new site, with $150 a month to run it. It expects 3,000 visitors a month once the site is live and indexed. Two per cent become enquiries, sales close 25% of those, the average deal is worth $4,000 and gross margin is 50%.

Enquiries are 3,000 multiplied by 2%, so 60. Customers are 60 multiplied by 25%, so 15. Revenue is 15 multiplied by $4,000, so $60,000. Gross profit is $60,000 multiplied by 0.50, so $30,000. Take off the $150 running cost and the monthly figure is $29,850. Payback is $12,000 divided by $29,850: under a month.

That is what a healthy model looks like, and it is worth noticing why. Halve the traffic to 1,500 and payback is still under a month. Halve the deal value to $2,000 as well and it is still under two.

The build cost is rarely the sensitive input. Drop the enquiry rate to 0.6% instead, which is what a slow, unclear site often achieves, and monthly profit falls to $8,850, payback stretches past a month, and the first-year picture changes shape entirely.

How to read the result

Payback answers the question a finance team asks. First-year return answers the question a board asks. Both come from the same monthly figure, so if you distrust one you should distrust the other, and the input to distrust first is almost always the conversion rate.

If the monthly figure comes out at zero or below, there is no payback at these numbers and the calculator says so rather than printing an enormous number. That is not a verdict on websites. It means the traffic, the conversion rate, the deal value and the margin you entered cannot together fund a build at that price, and one of the four has to change before the spend is justifiable.

The calculation runs in your browser. Nothing is sent anywhere, nothing is stored, and no email address is asked for.

The cost of doing nothing

The comparison that carries a business case is not the new site against zero. It is the new site against the current one, running for another year.

So run the calculator twice. Once with today’s traffic and today’s enquiry rate, and once with what you expect after the rebuild. The gap between the two monthly figures, multiplied by twelve, is what another year on the existing site costs. In the example above, moving the enquiry rate from 0.6% to 2% is worth exactly $21,000 a month in gross profit, and twelve months of standing still is the number to put in front of whoever signs the invoice.

Be honest on the first run. The temptation is to enter a pessimistic current state to make the case look better, and a board that spots it will discount every other figure on the page.

What this calculation does not account for

• Ramp-up. A new site does not reach steady-state traffic on day one, and organic search in particular takes months. Real payback is usually slower than the figure here.
• The rest of the funnel. A website produces enquiries; people convert them. If nobody follows up within a day, the close rate you entered is optimistic.
• What the site replaces. If it takes over work someone currently does by hand, that saved time is a return this model never sees.
• Credibility. A site that makes a company look serious wins work nobody can attribute to it. Real, and not countable here.
• The cost of the traffic. Visitors are an input to this model, not an output of it. Whatever you spend to earn them sits outside these figures, which is what the ad budget calculator is for.

Measure this before you rebuild

Four numbers, recorded before anything changes, are what turn a redesign into something you can prove: monthly visitors, enquiries per month, close rate, and average deal value. Without a baseline you will be arguing about the new site’s merits from memory.

Google’s good threshold for Largest Contentful Paint, 2.5 seconds at the 75th percentile of page loads, is worth recording too, because speed is one of the few build decisions that shows up directly in the conversion rate you are modelling.

When to stop calculating and talk to someone

Stop when the model says the site is not the problem. If your conversion rate is healthy and enquiries still do not become customers, a rebuild moves money without moving the outcome. Stop, too, when you cannot tell whether the current site is slow, unfindable or simply unpersuasive, because those need different fixes: the free on-page SEO checker settles the first two in about a minute.

When the case does hold up, the next question is scope and price, and the project planner turns six answers into an ordered plan with the published starting budgets attached. Our website development service sets out what a build includes, and how to choose a web development company covers what to ask before you sign with anyone, including us. Bring your four baseline numbers to a free consultation and we will tell you if a rebuild is the wrong answer.