The 4 Factors That Determine Your Website Value

website value

Increasing Your Website Value

Like other assets of your business your website can be appraised and assigned a value as part of selling your business or as part of an acquisition or merger. We’ve boiled down the main 5 factors appraisers and business brokers use to determine a value. Whether or not you want to sell your website, understanding how each factor affects your digital worth empowers you to understand how to increase its value as an asset.

Read on to understand what factors influence the value of the appraisal and learn how to maximize them.

Your Website Value: The 4-Factor Breakdown

By targeting investments to address the under-performing factor(s) in the website value equation below, you can efficiently optimize your website and supercharge its value.

The Website Value Equation

Website Value =  Lead Generation + Domain Name + Inbound Links + Revenue

1. Lead Generation

In the same way a franchise is valued for its proven business model, any business that has a replicable lead acquisition and lead conversion process has inherent value. Appraisers see whether a business has a firm understanding of its cost per acquisition and average revenue per transaction. If an appraiser detects you’ve mastered a repeatable system of acquiring leads which generates an attractive ROI against a consistent lead conversion system, they’ll credit you with a high value within this factor.

You can increase your overall website value by improving the system by which your website generates leads. The key to increasing your website’s lead generation value is by increasing your website’s ability to identify a visitor pool that can be acquired for a defined cost.

While paid advertising drives lead to your website, websites with high organic rankings acquire visitors at the lowest cost possible making them more valuable. While organic rankings are highly valuable, achieving them takes time. Because time is money, appraisers assign a lower dollar value to websites with little-to-no real estate on search engine results pages (SERPs).

Being able to measure and report where your website ranks for queries that drive quality leads is key to increasing its value. The more key terms your website ranks for, the more valuable it is. If your website needs an SEO evaluation, contact an SEO expert with a proven track record of success.

2. Domain Name

For this example, think of your website in terms of constructing a building. Before you start building, you’ll need to purchase land. Even if you don’t build anything on that land, it still has value. Just as with real estate your domain name has value whether there is a website built on it or not.

The worth of any domain name is based on its marketable potential. Domain name values range from a few dollars to seven figure numbers!

The top metrics determining the marketable potential of a domain name include:

  1.  Length— the shorter, the better.
  2.  The Number of Words in the Domain— fewer words are more valuable.
  3.  Spelling and Use of Words— if it’s hard to read, type, or remember it’s worth less.
  4.  The Top Level Domain (TLD) (.com, .org, .edu, etc.)— .com extensions hold the most value across the board.

In essence, domain names that hold the most value are unique, simple, short, easy-to-remember, and end with the popular “.com” extension. To best to determine the approximate value of your website’s domain name is with a free domain name appraisal service like Google Domains or Go Daddy.

If your domain name is impeding your website value, invest in a more valuable domain name aligning with the above value metrics.

3. Inbound Links

An inbound link is a link from another website pointing to yours. Link building is very labor intensive and time consuming. Again, appraisers understand the monetary value of time. The link itself can be assessed either by assessing the direct traffic it generates or by assessing the value of the domain where the link originates. There is a standard industry value that communicates the “authority” or value of a link.

The greater number of qualified, valuable links to your website materially increases its value. Try out this link building strategy to start increasing the value of your website’s links.

4. Website Revenue

Measurable revenue sourced to your website is also a value-determinant. Typically, revenue is achieved a result of:

  • E-Commerce— selling products or services from your website.
  • Google AdSense or Ad Network Marketing — allowing ad networks, like Google, to access your site’s content and display relevant ads to visitors.
  • Subscription Access— offering subscription plans to your visitors to access premium content.
  • Affiliate Marketing— promoting an endorsed product on your website.
  • Lead Generation— attracting highly qualified leads that will convert to sales.

Having a revenue-generating system on your website is essential to increasing its value. If you can’t document or demonstrate any revenue generating from your website, appraisers can’t assign a value to it.

If your website isn’t generating revenue or attracting leads through traffic generation, you have a problem worth investigating. Start optimizing your website to make you more money.

Grow Value with Easy Website Performance Tracking

In order to know which website value factor(s) are under-performing, keep track of your website’s performance with a website data aggregating tool like Google Analytics. If you have no time to learn the countless features, there’s an easier way.

With Smylelytics, you get the easiest and fastest way to monitor your website’s performance data for free— and that’s something to smile about! See how we make your website performance data effortless.