Majority of companies can’t prove online ROI, survey finds

Even some retailers bringing in as much as multiple millions of dollars online don’t know the ROI from their web site, according to a study by interactive agency Brulant. Of 102 senior managers across industries of which retailers constituted about two thirds, 56% said they can’t confidently demonstrate ROI for their online channel.

“It’s not that the online channel doesn’t generate more ROI, it’s that companies haven’t figured out how to measure it, even 10 years along the Internet adoption curve,” says Len Pagon, Brulant’s CEO.

Pagon says retailers whose online sales are growing at the annual rate of 25% or more understand their online business and make continual investment in it. However, that leaves a field of retailers that aren`t growing web sales at anywhere near that rate, generally for two major reasons, Pagon says.

One is a lack of awareness and sponsorship of the site at the retailer`s level. The other is a lack of dedicated, experienced managers to run the online part of the business. Pagon does note such people must be effective across multiple disciplines from technology to business and as such, can be difficult for companies to find. However, a lack of the right experience in such positions can be costly in terms of lost opportunity.

Pagon cited but did not disclose one multi-channel retailer now doing about $35 million in sales online annually. Yet a probe of why conversions at the site had actually declined following a $2 million site upgrade revealed that the retailer didn’t even accurately understand its conversion rate prior to the site upgrade.

Investment on a site pays off only when site operators understand such basics and have a firm grasp on analytics, including an understanding not only how to calculate web ROI but also how to quantify the web’s effect on offline channels.

“The online channel is growing 25% to 60% annually while other channels are maxing out at 7% growth,” says Pagon. “This alone is sufficient justification for not only investing in the online channel, but also for investing in the tools and expertise needed to effectively measure web ROI.”