Not surprisingly, one of the questions people raise reasonably early in discussions about optimizing their business' internet marketing program is "how much is this going to cost?"

And while it's perfectly understandable that someone would want to know how much of an investment he/she will need to make before making a commitment, an equally valid question - one that's often considered but rarely asked - is "how much is it going to cost me if I do nothing?"

In fact, when you really think about it, the question about the cost of doing nothing may be even more important because that cost is meant to be a productive cost that will bring you a return many times over - just like any other investment - so delaying or forgoing such an investment means you are actually robbing your business of revenues and profits.

Know How Your Website Measures Up

Before you can begin to get a handle on the cost of doing nothing, you're going to need to get clear on the purpose of your website. And while there are many possibilities, for the sake of simplicity we're going to assume that you are a strictly commercial enterprise and that the purpose of your website is to provide:

• Sales - customers not only find you online, they can also complete full transactions online

• Leads - prospective customers may find you online, but sales are made/concluded in the "offline" world

• Sales and leads - customers can engage with your business either way

Now that we're clear on your website's basic purpose, we're going to need to gather some data on how well your website fulfills that purpose (you should look back at least one quarter's worth of data, but preferably get your hands on a full year's worth).

And while there are a lot of data you can and should track, we're going to focus only on a handful that will serve us as the high-level key indicators of website performance:

• What is the dollar value of an average sale?

• How many sales do you make, on average, every month?

• What are your average monthly sales?

• How many of those sales, on average, come as a result of someone first connecting with your business by visiting your website?

• What are your average monthly sales that are attributable to your website?

• What is the average number of visitors to your website every month?

• What is the average conversion rate (. As you can see - assuming other variables remain stable - this has the effect of increasing the revenue attributable to the website from $5,000 to $6,000 per month.

In the next column - Increased Conversion - we've left the traffic at the current level but have increased conversion by 20. This has the net effect of increasing the revenue attributable to the website from $5,000 to $7,200 per month.

Not surprisingly, the whole is greater than the sum of the parts.

Calculating the Cost of Doing Nothing

This table about the Cost of Doing Nothing summarizes most of the key elements you should take into consideration when weighing up virtually any investment decision:

• Projected benefits - because the improvements to your website's performance will continue to pay dividends over the mid- and long-term, you should based your calculations on 12 months of results

• Total costs - factor in upfront costs as well as any ongoing costs if applicable

• Net benefits - the net benefits are simply "benefits - costs"

• Return on investment (ROI) - is calculated by dividing the net benefits by the total costs

• Breakeven point - the breakeven point is calculated by dividing total costs by projected benefits then multiplying the result by 12 (as in 12 months)

• Monthly cost of doing nothing - is calculated by dividing the net benefits by 12 (as in 12 months)

As you can see, doing nothing is actually costing our fictional website owner $1,575 per month.

And while it is obviously not always true that doing nothing will cost you money (very often doing nothing - or doing something else - is the right thing to do), the key takeaway is simply to be more inclusive when weighing up decisions and look at both the cost of taking action as well as the cost of not taking action.

Your bottom line will thank you.

Send me an email at dbarber@dawsonbarber.com or use the handy contact form on my website and let me know if you'd like a copy of the Key Performance Indicators for a Website worksheet and the Cost of Doing Nothing Calculator and I will be happy to send them along.