Measure how much your website is worth
Why should you calculate goal values in Google Analytcs? Simple: to determine your website’s ROI (return over investment). Whether a website is an eCommerce store or a site for lawyers, each can benefit from understanding how much a conversion is worth.
Tracking goal values can be done with a simple formula that we decided first to write out mathematically. Don’t worry, it’s math that a ten-year-old could do. Yes, simple math equations suck as homework, but it turns out they can help out in the real world every once in a while.
First, you’ll need to gather the following data:
- Count of total conversions through your website.
Note: Goal values are best done on a per-form/action basis, so your Analytics account will have to be set up to track individual forms for the most accurate numbers.
Total revenue acquired from your website
Note: For this you will either have to have eCommerce tracking or some kind of website sales data
The ridiculously easy formula:
C – Total website conversions
R – Total revenue from website conversions
Gv – Average goal value, or revenue per conversion
Gv = R / C
That’s it, but let’s do an example to illustrate the point:
- Total website conversions: 50
- Total revenue generated from website: $2500
Every goal is ‘worth’ $50
Using data to make informed decisions
The ultimate goal of calculating website goal values is to help a website owner optimise marketing efforts. After all, throwing money and resources at an inefficient marketing channel is a bit like trying to chop a tree down with a spoon…it doesn’t work very well. Understanding goal value and, in turn, ROI allows website owners to ‘use the best tool for the job.’
Have ideas or comments on how to calculate website goal values? Comment and let us know!