How to do ROI calculations for conversion optimization?

Calculating the ROI of your conversion optimization efforts is much more difficult and time consuming than calculating the ROI of any marketing campaign (SEO, PPC etc).

This is because when it comes to measuring the performance of a marketing campaign say ‘SEO’, you can assess the performance of SEO by assessing the performance of ‘organic search traffic’, in terms of completing and assisting website conversions.

Similarly, when it comes to measuring the performance of ‘PPC’, you can assess the performance of ‘paid search traffic’ in terms of completing and assisting website conversions.

But when it comes to measuring the performance of a conversion optimization program, you can’t quite put your finger on anyone thing. When you do CRO, you work on improving the overall website user experience. You work on removing the bottlenecks in your sales funnel. As a result, you increase sales and ROI across multiple marketing channels.

All marketing campaigns (from SEO, PPC, social media to email) benefit from your conversion optimization efforts in one way or the other and as a result each campaign deliver better ROI over time.

However it is not possible to determine, exactly which part of a marketing campaign or which part of the sales funnel, can/will benefit from your conversion optimization efforts and by what degree.

If your CRO program has been successful, you will notice significant improvement in overall website sales and ROI. But you still can’t put your finger on anyone change or set of changes you made to improve the business bottomline. You still can’t make a claim that this particular change or set of changes on the website improved the sales and ROI.

In a multi-channel and multi device world, different marketing channels, marketing messages, website elements, and devices work together to create user experience and conversions. No single marketing channel or particular set of website changes can be held solely responsible for generating sales and ROI.

Besides, following factors also positively or negatively affect the overall sales and ROI of a website and that too almost 24/7:

  • Seasonality
  • Changes in advertising
  • Changes in competitors landscape
  • Changes in social media & search engine landscape
  • Changes in weather
  • Website redesign
  • Introduction of new products
  • Discontinuation of existing products
  • New product pricing
  • Introduction of new offers etc

With so many variables in play, it becomes very challenging to assess the performance of a conversion optimization program in isolation.

What I have found, the best way to assess the performance of a conversion optimization program is to measure the incrementality it brought to the projected overall sales and ROI.

However, before you calculate the ROI of your conversion optimization program, take a baseline measurement by forecasting the overall website sales and ROI for the next 4 to 6 months.

Determine what the projected sales and ROI will be, for the next 6 months, if you continue to operate the way you are currently operating, without optimizing your website and user experience for conversions. Forecast where your current marketing activities will take your online business, if you do not test and optimize your website any further, for conversions.

When it comes to forecasting sales and ROI, you can go as scientific in your approach as your current skills and resources allow.

For example if you are currently executing both marketing mix modelling and ‘attribution modelling’ and you have a data scientist at your disposal then you can feed your attribution modelling data to your marketing mix model and carry out regression analysis to accurately forecast the impact of various marketing activities on sales and ROI, for the next 4 to 6 months.

Even if the statistics and data science are not your forte, you can still make a reasonably accurate guess of future sales and ROI based on your:

  1. Current marketing activities
  2. Historical sales data
  3. Business and marketing plans in the immediate future.

Whether you use statistical analysis or do educated guessing, it is important that you spend some time in forecasting sales and ROI for the next 4 to 6 months. Otherwise you will have very hard time in understanding the impact of your conversion optimization program on overall sales and ROI.

Follow the steps below to forecast sales and ROI:

Step-1: In order to forecast the sales and ROI as accurately as possible, involve following stakeholders in forecasting calculations:

  • Marketing professionals (SEO, PPC, Email, Social media experts)
  • Web Analyst, Usability experts, Data scientist (if you have got one)
  • People from the finance team
  • IT team
  • ‘C’ level executives (CEO, CMO, CFO etc).

Step-2: Ask marketing professional to forecast sales and ‘cost of sales’ from their marketing efforts in the next 6 months.

For example, you can ask your SEO expert to forecast sales and cost of sales from organic search traffic in the next 6 months. Do not worry about being 100% accurate or going into too much detail. This is not an accounting exercise.

The forecast just need to be reasonably accurate. However do look at the method your SEO used to forecast sales and question him/her if the projected sales does not look reasonably accurate based on historical data.

It is important that you involve marketing professionals in projecting sales and ‘cost of sales’ from their own marketing efforts. There are two strong reasons for that:

#1 Marketing professionals understand their industry landscape and campaigns the best and are thus in a better position to more accurately forecast sales and ROI than you.

#2 They are less likely to make a claim on the incrementality in sales you generate by your conversion optimization efforts in the near future, as they won’t be able to raise objection on their own projected sales and ROI data.

Step-3: Ask the IT team, what website changes they are planning to make in the next 4 to 6 months. Note down their plan.

Step-4: Ask business owners / ‘C’ level executives what they are planning to do in the next 6 months to increase overall sales and ROI. May be they are planning to launch a new product line, or discontinue a product. May be they are in the middle of acquiring a company, starting new form of advertising, increase product pricing etc. Get as much data as possible about their immediate future business and marketing plans.

Step-5: Collect and combine the projected sales and cost data from all the stake holders and then consult your web analyst or data scientist, to confirm that the forecasted sales and ROI makes sense, is statistically significant or at least reasonably accurate.


Once you have projected sales and cost data in place, any incrementality you bring to the projected sales in the near future, is most likely because of the result of your conversion optimization efforts.

Your conversion optimization program would/should exceed projected overall sales volume and ROI.

Now the question comes, how much incrementality in projected sales is acceptable to justify investment in conversion optimization?

The answer to this question, depends upon your fees for carrying out conversion optimization. Whether you do SEO, PPC or CRO you should consider delivering at least 100% ROI.

100% ROI means if you client spent X on conversion optimization program, then he gets 2X in return.

So if you are charging say $40k as a fees for carrying out conversion optimization on a website, you are expected to deliver at least $80k in additional sales during your contract period. This is the revenue in addition to the projected sales.

So if projected sales for the next 6 months is say $200k

Then after carrying out the conversion optimization program, the projected sales should be around $280k. This will give you a ballpark figure of what to aim for. The more you charge, the more you would be expected to deliver. So beware of how much you charge for conversion optimization.

It is worth noting that at no point I asked you to focus on improving website conversion rate. At no point I asked you to forecast conversion rate metric. In fact it is highly unlikely that you can forecast conversion rate for the next 6 months even with a small degree of accuracy. This is because conversion rate is a ratio metric which changes all of the time.

Above all your website conversion rate is destined to decline over time. The ever increasing traffic on your website will always tend to lower the conversion rate and the website traffic does not increase in proportion to the conversion volume (sales, transactions and other conversions), no matter what you do.

Not every website visit will lead to conversions. You will always get some traffic which won’t convert, no matter what.

If you do not see lot of fluctuation in your website conversion rate on a weekly/monthly basis, then it means your traffic acquisition strategy is weak. You are not as aggressive as you should be, in acquiring new traffic. You have become content with the existing traffic volume. Such contentment will sooner or later make you less profitable despite of your rigorous conversion optimization efforts.

While it is good to convert more of existing website traffic into sales and leads, you always need lot of new traffic because majority of your existing users/customers will eventually disengage (visit your website less often, complete less conversions, generate less sales etc) from your website and become less profitable over time for no apparent reason. You need a constant flow of new traffic regardless of your conversion optimization efforts.

Conversion rate is a horrible metric to focus on when assessing the performance of a conversion optimization program esp. if you are heavily involved in multi-channel marketing.  Focus on improving overall conversion volume (sales, orders, gross profit).

Related Article: Here is Why Conversion ‘Volume’ Optimization is better than Conversion ‘Rate’ optimization


Do you know the difference between Web Analytics and Google Analytics?

99.99% of course creators themselves don’t know the difference between Web analytics, Google Analytics (GA) and Google Tag Manager (GTM).

So they are teaching GA and GTM in the name of teaching Web analytics.

They just copy each other. Monkey see, monkey do.

But Web analytics is not about GA, GTM.

It is about analyzing and interpreting data, setting up goals, strategies and KPIs.

It’s about creating strategic roadmap for your business.

Web Analytics is the core skill. Google Analytics is just a tool used to implement ‘Web Analytics’.

You can also implement ‘Web analytics’ via other tools like ‘adobe analytics’, ‘kissmetrics’ etc.

Using Google Analytics without the good understanding of ‘Web analytics’ is like driving around in a car, in a big city without understanding the traffic rules and road signs.

You are either likely to end up somewhere other than your destination or you get involved in an accident.

You learn data analysis and interpretation from Web analytics and not from Google Analytics.

The direction in which your analysis will move, will determine the direction in which your marketing campaigns and eventually your company will move to get the highest possible return on investment.

You get that direction from ‘Web analytics’ and not from ‘Google Analytics’.

You learn to set up KPIs, strategies and measurement framework for your business from ‘Web analytics’ and not from ‘Google Analytics’.

So if you are taking a course only on 'Google Analytics’, you are learning to use one of the tools of ‘Web analytics’. You are not learning the ‘Web analytics’ itself.

Since any person can learn to use Google Analytics in couple of weeks, you do no get any competitive advantage in the marketplace just by knowing GA.

You need to know lot more than GA in order to work in Web analytics and marketing field.

So what I have done, if you are interested, is I have put together a completely free training that will teach you exactly how I have been able to leverage web/digital analytics to generate floods of news sales and customers and how you can literally copy what I have done to get similar results.

Here what You'll Learn On This FREE Web Class!

1) Why digital analytics is the key to online business success

2) The number 1 reason why most marketers are not able to scale their advertising and maximize sales.

3) Why Google and Facebook ads don’t work for most businesses & how to make them work.

4) Why you won’t get any competitive advantage in the marketplace just by knowing Google Analytics.

5) The number 1 reason why conversion optimization is not working for your business.

6) How to advertise on any marketing platform for FREE with an unlimited budget.

7) How to learn and master digital analytics and conversion optimization in record time.


My best selling books on Digital Analytics and Conversion Optimization

Maths and Stats for Web Analytics and Conversion Optimization
This expert guide will teach you how to leverage the knowledge of maths and statistics in order to accurately interpret data and take actions, which can quickly improve the bottom-line of your online business.

Master the Essentials of Email Marketing Analytics
This book focuses solely on the ‘analytics’ that power your email marketing optimization program and will help you dramatically reduce your cost per acquisition and increase marketing ROI by tracking the performance of the various KPIs and metrics used for email marketing.

Attribution Modelling in Google Analytics and Beyond
Attribution modelling is the process of determining the most effective marketing channels for investment. This book has been written to help you implement attribution modelling. It will teach you how to leverage the knowledge of attribution modelling in order to allocate marketing budget and understand buying behaviour.

Attribution Modelling in Google Ads and Facebook
This book has been written to help you implement attribution modelling in Google Ads (Google AdWords) and Facebook. It will teach you, how to leverage the knowledge of attribution modelling in order to understand the customer purchasing journey and determine the most effective marketing channels for investment.

Himanshu Sharma

Digital Marketing Consultant and Founder of

Himanshu helps business owners and marketing professionals in generating more sales and ROI by fixing their website tracking issues, helping them understand their true customers' purchase journey and helping them determine the most effective marketing channels for investment.

He has over 12 years of experience in digital analytics and digital marketing.

He was nominated for the Digital Analytics Association's Awards for Excellence. The Digital Analytics Association is a world-renowned not-for-profit association that helps organisations overcome the challenges of data acquisition and application.

He is the author of four best-selling books on analytics and conversion optimization:

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