Cheap vs expensive websites


1st February 2018

Economic Advice & Solutions

By Alan Perkins

Managing Director


YOUR website sits at the heart of your digital marketing. It should be like a member of your team, delivering leads to your salespeople or selling products for your retail operation.

Like any team member, poor performance can have a big impact on the business, as can fantastic performance. So, you need a decent website - how much should it cost you?

To determine how much to spend on a website and its marketing, start with the end in mind - how much business would you like the website to deliver? For example, suppose in a B2B lead gen environment you'd like 20 more leads per month, and you convert one in four leads to a sale at an average sale value of £20,000. This means you're looking for five sales per month with an additional revenue of £100,000 per month, or £3.6 million over three years. (Substitute your own numbers for your business. They could be much lower or higher than this).

Over the three years, then, how much is it worth spending on the website and its marketing in order to deliver that £3.6 million revenue? It depends on the margins in your business, but a typical answer might be 10 per cent, or £360,000 over three years. The cheaper you can make the website and hosting, the more is left to spend on creating content and marketing to deliver those sales - but there's a catch. In fact, several catches: speed, security and production quality.

Cutting costs on development and hosting can result in a website that is slow or insecure. Prospects are unlikely to persevere on a slow site and a hacked site is even worse, possibly resulting in reputational damage. Slow, insecure websites with low production quality have a lower conversion rate, i.e. fewer leads for a given number of visitors. This reduces the effectiveness of any marketing spend. To put it simply, there is a baseline quality that you need to make everything else work. Spending £355,000 over three three years marketing a £5,000 website will probably deliver a lower return than spending £340,000 over three three years marketing a £20,000 website.

The most expensive websites are those that don't pay for themselves and especially those that damage your reputation. Spend enough to fairly represent your business and maximise your chances of marketing success.

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