How to calculate ROI for CMS?

I have been working with website Content Management Systems (CMS) for 16 years or so. Around the time I got started, there was a flood of discussion about the ROI of implementing a content management system, mostly written by vendors trying to sell very expensive software in an immature market. We are now in a more mature market, but over the past 16 years two big things have changed:

• The cost of CMS software has decreased exponentially since 2000
• Site visitor expectations have increased exponentially since 2000

There’s little doubt that choosing a good CMS for your online presence has several business benefits, including generating leads, improved productivity, automated workflows and much more. However, to justify the cost of a new online platform, it’s often necessary to work out the ROI for the CFO or CEO.

While in the past, this was dependent on the overall cost of the CMS, including installation and licensing, there are now different models that can be used. These are more cost-effective for some companies, giving rise to less hard-and-fast rules on how ROI should be calculated.

For the most part, this is due to the rise in popularity of cloud-based CMS, which often allows a company to pay a monthly fee for the software to be delivered per user or based on traffic, rather than an initial up-front capital investment.

However, this doesn’t mean that the CEO and CFO, won’t need an answer. For the most part, those wanting to implement a CMS will still have to justify it.

Justifying the business expense

One of the difficulties with calculating ROI for CMS lies with calculating cost-savings when it comes to staff efficiency. Bearing this in mind, is it better to calculate savings based on staff cuts or increased productivity?

This means that it’s wise to look at all aspects of what staff actually do and how a new CMS can increase productivity in existing staff.

Once you have worked out the time that can be saved on tasks performed today, think about where the time saved can be best spent in the future. This could be on new product launches, training, increasing traffic to sites, blogging, social media management and more. The time that can be saved by editorial and technological staff can be substantial, so make sure that you survey all staff time before calculating ROI. This can be done by supplying timesheets.

How much are leads worth?

You know the old saying: ‘If you can’t measure it, you can’t manage it.’ Some CMS provide marketing automation tools that help you do both. Marketing Automation is a platform that marketers use to plan, coordinate, manage and measure all of their marketing campaigns, both online and offline. You get to see which campaign touchpoints (both messaging and channels) are working best. This gives guidance on where to put that precious money, and helps your marketing team focus on fine-tuning repeatable processes so you can scale the campaigns that work best.

If you set up your sales funnel correctly, you can calculate how many leads you have to generate to get the number of new customers you want to have through your website for justifying the investment of your new CMS.

SEO and CMS

Most good CMS include options for SEO, and this is something that, without a CMS, can be very time-consuming. Measure how long staff will spend on this and get demonstrations from CMS vendors to see how much time can be saved.

This more automated SEO, which can improve tagging and keyword optimization, can also increase traffic quite dramatically, so work out percentages and how they relate to conversions.

For example, if the CMS was to improve search traffic by an average of 10%, then the conversions gained could equate to a rise in revenue. Further to this, improved search onsite and better engagement could push this up even more.

Improved collaboration, leading to better team work

While it’s not a simple matter to measure how improved collaboration will save a company money in the long term, it is relevant and should be included in the overall ROI calculation. A report that looks at ROI is never going to be an exact science. Like business plan finance, it relies heavily upon estimates.

However, intelligent estimates can be made that can address this and justify the spending on a CMS. It comes down to how well the report author knows the company and where it’s lacking and how it can improve, which should be included in the planning stages.

Pulling it all together to calculate ROI

Once all of the possible efficiencies, cost savings and potential revenue increases have been identified, the next step is to pull it all together to produce a coherent and comprehensive report.

This should be as detailed as possible and take everything into account when it comes to making a solid case for the need to invest in a CMS. Take new technologies into account and whether the CMS vendor wants to tie you into a lengthy contract, or whether it can be purchased monthly and justify this too.

Include risk assessment and how long it will take for the company to gain ROI on the investment. 

Compile these together and come up with a final ROI figure that can be used to evaluate the CMS investment.

Contact us at Zooma when you want to know more about how to calculate ROI on CMS.