Calculating The Average Value of Your Site Visitors
15th June 2015
Understanding the average value of each of visitor to your site is essential to monitor the performance of any existing digital marketing activities and the effective management of future campaigns.
You can work out the average value of your visitors with a very simple formula: deduct your initial investment (cost of your products or services to you) from the total amount of money which has been generated through the site (even if the customer used the site simply to get your contact details) and divide this amount by the total number of unique visitors (unique sessions in Google Analytics).
Average Visitor Value = (Revenue Generated Through or Instigated by the Website - Cost of Your Goods or Services) / Number of Visitors to Your Site
“OnlyWhiteTrainners.com” sells each pair of white trainers for £50. The company sell 100 pairs of these in one month, and the company get 1000 visitors on your website. The company pay £25 for these trainers so by selling 100 pairs the company have made £5000 and £2500 in profit. This means the company take £5000 from 1000 visitors on its website, which works out to £5 per visitor in turnover, and £2.50 per visitor in pure profit. This is the value of each of the company’s visitors.
“xStreams.com” sells a music streaming service for £15 a month. The website takes 15000 visitors a month, and 1500 of these pay for this service in full monthly. The licensing cost for the company is £2500 a month, so overall the company take £22,500 a month, and with licensing costs the company take £20,000 profit. Per visitor this means the company take £1.50 per visitor in turnover, and £1.33 per visitor in pure profit. This is the value of each of the company’s visitors.
An effective digital marketing campaign will always look to ensure that the amount of money you invest in attracting new visitors to the site is never higher than the amount of money you are likely to get in return.