Simple Lesson in Public Sector/Non-Profit Website Return on Investment (ROI)

I just finished writing an initial draft marketing strategy for a major government department that is still using “outdated” web metrics such as “unique visitors” and “pageviews” to gauge the performance of its website.

One of the key things I try to emphasize is that typical “highly measurable” private sector conversion goals such as “user purchased item under $50”, can be easily adapted to the public sector to help track ROI.

Currently, performance measurement in most departments is limited to very uninformative web analytics which are not tailored to the website’s objectives and as a result are quite meaningless since they do not gauge quality of traffic but rather sheer quantity. The first step of good Performance Measurement is identification of Key Performance Indicators (KPI’s). In terms of web analytics, these are often referred to as conversion goals. A conversion goal can include measurable items such as reaching a particular page on your site, downloading a file, a particular on-page action or an e-commerce sale (each conversion goal must first be set up manually on Web Analytics Software in order to be tracked–>use Google Analytics it’s FREE).

The first step is looking at your objectives:

Let’s say a key marketing objective is to get citizens more engaged or learn more about your department’s purpose (Remember specific objectives must be SMART). Not just boost the traffic to your site, but rather, increase the level of interaction with them; help them do or learn something useful that your department is ultimately in existence for.

Possible examples of conversion goals for a departmental website could then be as follows:

  1. User booked a “chat with an employee” date
  2. User spent 10 minutes using the embedded application on the site (could be a game, a tax calculator tool, an interactive map, anything “engaging” really…)
  3. User signed up for the departmental newsletter or rss feed

The next step involves assigning quantitative values to these goals. These values can be based on any number of factors such as contribution to departmental objectives, government priority, etc…

  1. User booked a “chat with an employee” date= 4/10
  2. User spent 10 minutes using the embedded application (could be a game, a tax calculator tool, an interactive map, anything “engaging” really…)= 5/1
  3. User signed up for the departmental newsletter or rss feed= 7/10

The assigned values can also be turned into relative proxy monetary values to facilitate the creation of ROI reports. This can be extremely beneficial, especially for justifying additional funding needed for site maintenance or a particular SEM campaign. For simplicity, let’s assume the following values:

  1. User booked a “chat with an employee” date = 4/10 = $0.04
  2. User spent 10 minutes using the embedded application (could be a game, a tax calculator tool, an interactive map, anything “engaging” really…) = 5/10 = $0.05
  3. User signed up for the departmental newsletter or rss feed = 7/10 = $0.07

These proxy measures can now be used to gauge ROI.

Example: If you invested $15,000 in the creation of the embedded application and 40,000 people use it for 10 minutes or more, then the ROI is as follows:

  • 400,000 * $0.05 = $20,000
  • $20,000/$15,000 = 1.3
  • ROI= 1.3 (1.0 would mean you broke even, >1 is a success)

If you follow this step for a each conversion goal and add the ROI numbers together, you will come out with a properly “weighted” overall ROI figure for your web campaign. You can now use this value as a benchmark for subsequent campaigns or website improvements.

Simple enough right?

Not so fast. This is just the beginning (although a good start!). If you’re ready take web metrics to the next stage, beyond the world of conversion, I suggest you immerse yourself in anything to do with Avinash Kaushik (books, blog, podcast comments, etc…). He is the current GURU on the topic.

Cheers gang!

21 Replies to “Simple Lesson in Public Sector/Non-Profit Website Return on Investment (ROI)”

  1. Mike,

    Very nice post! This is something we’ve been discussing a lot around here as we are hammering out the evaluation portions of our interactive plans. Have you bought Kaushik’s book? I was thinking about getting it, but was curious how other social marketer/social media’s folks thought?

    Thanks!
    SocialButterfly

  2. It’s on my Amazon wish list. I’m currently reading: Join the Conversation, Meatball Sundae, The Long Tail and Presentation Zen. Once I get through these I’ll order it.

  3. These are such important concepts for anyone getting into Web Analytics to understand. Proxy conversions break your mass of traffic into discrete segments with definite action. Tracking action is where the real power of analytics becomes apparent.

    And, I can’t agree with you more about reading Avinash’s work. Not only does he get analytics but has a good understanding of the people behind the numbers.

  4. Thanks for the excellent advice and pointer to the excellent book!

    Just wanted to let you know I came across this post and am using it to set up our plan for a blog we are setting up. The focus is on public sector innovation which of course includes the use of Web 2.0.

    I bought the book by Kaushik, and I’m starting to get it a once through…

    Once the plan starts to take a little bit more shape I’d be more than happy to share…

  5. Having worked in web analytics within the Government for a number of years, I can truly attest to the need to measure the success of our web sites. Thanks for writing about this Mike.

  6. Hi Mike
    Great post and good to see an approach to this not entirely focussed on ecommerce.
    The guys from ZaaZ, Jason Burby and Shane Atchison have a great tool on Clickz that allows calculation of ROI over time in terms of optimisation. Its useful for non commerce sites as it allows a success event, not just a sale
    http://www.clickz.com/Website-optimization-ROI-calculator They also authored the excellent Actionable web analytics which details their methods for monetising content, sites etc – always an issue for government sites
    cheers
    Jon

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