Chapter 3. Will the Web Site be Worth It?

 Ken knows that doing a good job of planning helps him stay on track through out the project. But, before diving into planning the actual web site, in this chapter, we see how Ken handled two important parts of the Planning Phase – the budget and the anticipated ROI (return on investment).

 When Ken first thought about a web site for his business, he thought that he would build this wonderful web site, everyone would find it, and he would have more business than he could handle. He would learn that it just isn’t that easy. There are details that matter when building a successful web site. After discussions with Dan, his friend and web site consultant, the first thing that he does is establish his budget, his ROI goals, and how he expects to achieve those goals. Later in the process (Maintenance Phase), Ken can adjust his goals as he learns more about how people use his web site.

 First, let’s look at Ken’s ROI goals – Ken makes $100 net profit on each sale of his custom golf clubs. He averages three sets sold per week. Ken wants to increase his sales by seven to a total of ten sets per week. Ken expects the web site to drive five of the extra seven sales. That is, Ken expects the web site to produce sales of $500 per week or $25,000 year. (Ken is a hard worker and only takes a two week vacation.)

 How Ken expects to achieve the ROI goals – Ken has a lot of confidence in his product, he just needs to get the message out. The web site is a key tool in getting that message out and having potential customers take action. Ken’s marketing plan includes:

 

• Referrals. For each new customer, he includes his business card with the web site address. Ken expects the customer’s friends and associates to be impressed with the custom golf clubs and using the web site address, to check him out on the web. Ken knows that a large percentage of people check products out on line before actually buying off line.

• Ken’s community has three golf courses. Ken has a good relationship with the pro shops and he can display a set of custom golf clubs at each course. The display will also include a business card with the web site address where golfers can learn more about the benefits of Ken’s Custom Golf Clubs.

• Ken does expect some potential customers will find him by just surfing the web. Search engine friendly will be a part of the planning process.

• In the future, advertising in the local media.

 

Ken expects that these promotions and visibility can increase his sales by five sets per week.

 The budget – As with most small businesses, Ken watches his expenses closely. Even with a web site that potentially increases his sales by $25000/year, his is still cautious. At this point in time, Ken decides that he can put $1000 into his web site budget. That budget includes $100/ year for the domain name and web site hosting, $300 for advertising, and $600 to build the web site. Ken is busy running his business, but he feels like he can do much of the development work and save some of the $600. He has a back up plan, he can use some of Dan’s services if needed.

 

Bottom line, if the web site drives an extra $25000/year, the $1000 is a very good investment. Later in the process (Maintenance Phase), we will see how Ken monitors his web site’s effectiveness.

 

What do you think about Ken’s ROI analysis?