Now that we are building websites virtually full time these days, I get lots of questions. Primarily over the cost.
Up until 2008 building a business website used to be a lot like getting the old company annual report designed and printed. It was an expense, an annual overhead you put up with, simply there because the law required it and you needed to impress someone. There was no thought of it having a specific ROI and there were no significant costs occurring after the project as done.
However you can’t use this buying model today. Building a website is much more like buying a new car now. There’s lots of different sizes, models, options and manufacturers. Each has their own sales pitch and claims. It’s not just the model, design or upfront costs you have to worry about either, but all the running costs.
You don’t exactly need a license, but you certainly need a lot more understanding of what it is you’re buying – To avoid being ripped off as there’s no WOF, checklists or performance guarantees included with modern websites. The risk of buying a lemon is very high, even with the larger, ‘reputable’ developers – Which means you’ll be stuck with it for years to come, since unless it’s a high traffic shopping website, you can’t sell it to someone else. It’s been made for you alone.
I have a very long prospect list of NZ small business websites, most designed by well known and respected local developers that get virtually NO traffic and generate NO sales leads. I doubt this was the business objective when these sites were sold to them. These websites, like most of these businesses, are stagnating. Any small business that is not constantly marketing today, won’t last long.
Now, why did we need that website?
As I said, with websites, there’s no guarantees, other than how nice it can look visually, since this is the area most are fixated on. Getting traffic and generating business results is apparently, not on the ‘to do’ list! Many fools still believe Google will send them traffic simply because it looks nice and the designer stuffed in some keywords, then submitted their site to search engines! Yeah, right
This is where we are with online now. It’s much like the wild west.
Here’s a more complete list of what you now need to consider to promote your business online. And because many of your customers are now spending more time finding out about you online and not through your brochures, yellow pages, newspaper or radio ads, you really don’t have a choice. Here’s the top items and some indicative costs, based upon a small $500,000 – $2m turnover business. If your operation is bigger than this, scale accordingly.
- Website design / visuals – The visual/branding side only (Allow $2,000 per annual)
- Website development – The backend coding and CMS features ($2,000 per annum)
- Search optimisation – Onsite and offsite SEO work (typically $2,000 per annum)
- Website hosting – Including coding upgrades, backups and security ($75/mth)
- Online Storefront – Optional ‘module’ to the above, to sell online. ($2,000-$4,000 per annum)
- Website Marketing – Blogs, website articles, email campaigns, social media ($500-2,500/mth – outsource or inhouse)
- Search Marketing – SEO upkeep, AdWords, pay-per-click etc ($300-900/mth – inhouse or outsource)
- Offline Marketing – PR events, signage, articles, sponsorships etc ($500/mth – outsource or inhouse)
- IT overhead – ISP connection fees, cloud apps, email, online CRM etc ($250-500/mth)
Most companies only consider the first two, which are often bundled in as one proposal by web designers. And often it’s not an annual cost or rebuild, but thought of as project that only needs to be done every 3-5 years! In other words, set aside say $500/year for our online presence and marketing efforts, when they really need at least 20x this amount to be effective and get a return.
A nice looking website just attracts traffic, as if my magic, right?
Certainly how to get traffic and all the related upkeep items are not on the website design list. It’s seldom discussed seriously, aside from a quick mention around ‘keywords’ and ‘website submission’. Certainly the hosting is thought a commodity item that shouldn’t cost more than $10/mth for a 100% reliable service that never fails. As for writing about your company each week on your website and other blogs, email marketing, or keeping up your Facebook or Linkedin presence is seldom discussed. Yet these are all key items to getting traffic and being found online today.
The cost total
So, what’s the annual cost of having and running a high traffic and highly successful small business website today? That’s one that is generating 10, 20, even 30 leads per week… If you look at my list, it’s around $15,000-30,000 per annum investment. And this doesn’t include the in-house costs for someone to manage it all. Most companies end up hiring a marketing assistant ($40k/yr) for this.
This shouldn’t surprise most people. Many companies had few problems spending $10,000 on the yellow pages advertising alone a few years back to bring in new clients and a similar amount on newspaper ads. But now they’ve got it into their heads that this online stuff, for the most part, is free. Just build a simple brochure website every few years and we’re done. Sorry to disappoint…
p.s. Like everything in life and business, you can’t avoid putting in the hard work. But the neat thing with online, is that with good research, there are ample ways to define which market you should target and processes to use to reduce the risks.