The cost of your website – are you looking the right way?
Most people when asked about the cost of a
website will talk about the design cost and then, maybe, add in the cost of
hosting. Few will go much further.
A website should be a key element in an
integrated marketing information system. The huge advantage
of web marketing is that you should never have to commit sums of
more than £10K without having prior proof of its effectiveness - and
for small companies this risk element can normally be reduced to
£2.5K.
Yet, the more successful your website, the
more costs are incurred on handling the orders and queries it generates.
Fine, you may say, that is no different from any other promotion channel.
Advertising brings in sales as well and we don’t normally treat the cost of
fulfilment as part of the media cost.
There are two important differences between
promotion via a website as against traditional media:
-
the website is lasting and therefore
needs regular updating
-
the information generated is digital and can be handled more efficiently.
Website design costs are comparable with the
creative and media costs of advertising – and as variable!
For a good introduction to estimating design costs, look at:
www.telecomsadvice.org.uk/features/website_cost.htm.
They go some way to explaining why top-end
estimates can be 20 times greater than the lowest. However that design cost should be spread over the life of
the website; say 2-3 years before a major revamp is necessary.
An advertisement has a much more limited time horizon, even when it is
partly justified as creating long-term awareness.
The website that lasts 3 years will require
constant updating with new products and services to maintain its information
function to customers. It will also
require modification as the result of customer response. So, for example, if customers have a regular query, the
relevant answers should be added to the site in a FAQ section. If you also want to generate interest and repeat visitors,
you must give them sufficient reason to come back. The site that can only be
updated via the services of an external webmaster is likely to be less
responsive than one where the marketing manager can make immediate change as
required. The costs and the
alternatives need to be considered in the initial design.
The fact that response from a website
arrives in digital format gives opportunities that many companies are not yet
using. The data can be directly
integrated with other systems whereas orders by post, for example, will need
in-putting into the system. A
company without the right internal systems could easily waste 2 minutes on
re-entering data on every order or query. 100 such orders per week could be the
equivalent of throwing away £67 per week at an average cost of £20 per hour.
Equally, the right system will immediately reveal a repeat order or a new
customer and the service can be adjusted accordingly.
Finally reports are available without further effort if the systems are
designed correctly – and good information should lead to better marketing.
Customer Relationship Management (CRM)
systems are gradually increasing in popularity but there are many companies
without. A website gives them one
more reason to review their information and customer handling.
Standard budget procedures often fail to
manage effectively costs that cross departments and time periods.
Managers must therefore pay particular attention to ensure that their
strategy is coordinated fully when the finance department is unaware of the
implications. Web marketing should impact on each of Marketing, IT, Finance and
Human Resources.
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