(Cost savings and earnings as a result of project) divided by (Dollars Invested)

IMHO, things get sticky when you try to define "cost savings and earnings as a result of a project". This is because returns from marketing investments are broader and often more abstract than returns from some other types of investments. Marketing investments result in not only direct monetary benefits, but also indirect benefits. To make matters even more difficult, indirect benefits are often intangible and difficult (if not impossible) to measure.

If you are part of a typical small business with limited resources you may be in a seemingly no win situation. Accurately computing ROI requires a detailed analysis for which internal resources and expertise are often lacking. Outside consultants can spend hours unearthing data and computing an accurate ROI, but this can be expensive on a small budget.

This does not mean, however, that you cannot make your best effort and use ROI as only one of several inputs into your project evaluation. When figuring ROI and evaluating project success, keep in mind that each project will realize different types of benefits. Aside from direct dollars cost and direct dollars returned, consider other potential project benefits, including how well it supports your site goals. Other aspects to consider:

Improved customer relationships.

Happier customers can represent a return on investment. This can be gauged through repeat order patterns, by a change in number of complaints/compliments, or through customer surveys comparing pre and post project satisfaction.

Influence on off-line sales.

Online activities often have an influence on off-line transactions. You may experience sales leads originating from your Internet programs. Customers may also be driven to your off-line store as a result of online information.

Brand building.

Online activities can mean better long term growth for your brand. Market share changes, online interactions, and brand awareness surveys are some ways you can judge brand building effects.

Company growth potential.

Factor in long term growth prospects when evaluating your project. For many businesses, Internet provides access to new markets and customers. If you have a local business, for example, your Web site could extend your business far beyond city limits.

3 Step Approach

Take into account these broader implications, pay attention to how well a program supports your site goals, and measure project results. By taking this three pronged approach, you can better choose marketing programs that will result in a successful site.

In Part 2 of Web Site Success Series, I look at several Web metrics, ways to measure and improve your site by understanding data. Read "How To Measure and Improve Site Success, Part 2: Evaluate Site Activity With Web Metrics" here: http://www.websitemarketingplan.com/Arts/WebMetrics.htm

About Author

Bobette Kyle is author of Marketing Plan Guide "How Much For Just Spider? Strategic Web Site Marketing for Small Budget Businesses". Read more about guide here: http://www.websitemarketingplan.com/book_information.htm

Copyright 2003, Bobette Kyle. All rights reserved.

5. If leads companies can navigate this challenge successfully....the resulting leads will truly be "quality". They will definitely be interested in being contacted. So this could be a silver lining...or glass half full....situation. However, it could well be at a higher cost than we now see.

6. Now....if you read carefully on FTC website, it mentions that there is a period time of which someone can still be contacted.

a. If they were a customer, you may contact them for up to 18 months after last business transaction.

b. If they requested information (as website says, submitted an inquiry) you can contact them for up to 3 months.

Lead companies will have to provide Date/Time stamps and IP stamps with every lead. Is this hard? No, they do it anyways, so it shouldn't result in large cost increases.

Additionally, all company/personal "prospecting" websites will need to contain language similar to this: "By submitting your information you agree to be contacted by phone, email, or regular mail with information regarding a home based business, secondary income source, or a work from home opportunity." This will bind user to 3 months of being contacted.

All that doom and gloom aside....what we hopefully will see is a drastic reduction of junk lead companies or companies that generate leads not targeted for our industry. Those that navigate impending changes with quality compliant opt-in systems will survive and prosper. Those that don't.....m'bye bye.