Stocks and shares

How buying websites is like buying stocks & shares

3 minute read

3 minute read

Have you considered how buying websites can be like buying stocks & shares?

We discussed this idea with an in-house marketer client recently and they said it was a "lightbulb moment" for them.

So today I'm sharing the idea with you too.

How we buy shares on the stock market

There are normally over 1,000,000 trades per day on the London Stock Exchange.

Every purchasing decision is driven by expected future returns.

So when somebody decides to buy shares it's based on their assessment of what the shares are likely to deliver in return in the future.

To illustrate the point if we take investment advice it would always be on the lines of "X company, Y fund, or Z market are likely to give good returns".

We definitely wouldn't say to an advisor "I'd like to buy some shares, could you get me 3 quotes and let me know which are cheapest".

We'd get quotes that way for commodities of course - for example for our printer consumables, our office furniture, our IT equipment.

But not for something that's an investment, where the return is variable.

How we buy websites

The classic mistake is to think of websites as commodities when actually they are investments with variable returns just like stocks and shares.

Consider these 3 examples:

  • Web agency 1
    Design & build cost: £35k
    LTV of new business generated: £300k/pa
  • Web agency 2
    Design & build cost: £50k
    LTV of new business generated: £250k/pa
  • Web agency 3
    Cost to design & build: £20k
    New business generated over 3-years: £50k/pa
    So over the 3-year life of the website option 1 returns £865k, option 2 returns £700k and option 3 returns £130k.

Option 1 is best and option 3 is by far the worst quote, even though it's the lowest design & build cost.

But how do we know where the best return is?

For B2B business with turnovers above £1m there are 5 factors that greatly increase the likelihood your new website will deliver truly great results.

  • The agency building it specialises in B2B sectors
  • Senior staff run the design process (including avatar and value prop sessions)
  • Design is driven by customer insights & data rather than your preferences
  • The website is built in an enterprise level system (ie not WordPress)
  • There are advanced lead-gen / lead-magnet tools in the website
  • So if we're looking at quotes and impressed with how the agency is presenting on these kinds of topics we've a high chance of a good return on the project.

If the agency presents poorly on these topics, or if we're buying based on price or some other factor, we should expect low impact from our new website.

It's a fascinating topic for sure.

And remember So, past performance of your website is not necessarily indicative of future performance...if you buy websites as investments!

Have you considered how buying websites can be like buying stocks & shares?

 

We discussed this idea with an in-house marketer client recently and they said it was a "lightbulb moment" for them.

 

So today I'm sharing the idea with you too.

 

How we buy shares on the stock market

There are normally over 1,000,000 trades per day on the London Stock Exchange.


Every purchasing decision is driven by expected future returns.



So when somebody decides to buy shares it's based on their assessment of what the shares are likely to deliver in return in the future.



To illustrate the point if we take investment advice it would always be on the lines of "X company, Y fund, or Z market are likely to give good returns".



We definitely wouldn't say to an advisor "I'd like to buy some shares, could you get me 3 quotes and let me know which are cheapest".



We'd get quotes that way for commodities of course - for example for our printer consumables, our office furniture, our IT equipment.



But not for something that's an investment, where the return is variable.

How we buy websites
 

The classic mistake is to think of websites as commodities when actually they are investments with variable returns just like stocks and shares.



Consider these 3 examples:

Web agency 1
Design & build cost: £35k
LTV of new business generated: £300k/pa


Web agency 2
Design & build cost: £50k
LTV of new business generated: £250k/pa


Web agency 3
Cost to design & build: £20k
New business generated over 3-years: £50k/pa
So over the 3-year life of the website option 1 returns £865k, option 2 returns £700k and option 3 returns £130k.



Option 1 is best and option 3 is by far the worst quote, even though it's the lowest design & build cost.
But how do we know where the best return is?
 

For B2B business with turnovers above £1m there are 5 factors that greatly increase the likelihood your new website will deliver truly great results.

The agency building it specialises in B2B sectors
Senior staff run the design process (including avatar and value prop sessions)
Design is driven by customer insights & data rather than your preferences
The website is built in an enterprise level system (ie not WordPress)
There are advanced lead-gen / lead-magnet tools in the website
So if we're looking at quotes and impressed with how the agency is presenting on these kinds of topics we've a high chance of a good return on the project.



If the agency presents poorly on these topics, or if we're buying based on price or some other factor, we should expect low impact from our new website.

 

It's a fascinating topic for sure.



And remember So, past performance of your website is not necessarily indicative of future performance...if you buy websites as investments!How we buy websites
 

The classic mistake is to think of websites as commodities when actually they are investments with variable returns just like stocks and shares.



Consider these 3 examples:

Web agency 1
Design & build cost: £35k
LTV of new business generated: £300k/pa


Web agency 2
Design & build cost: £50k
LTV of new business generated: £250k/pa


Web agency 3
Cost to design & build: £20k
New business generated over 3-years: £50k/pa
So over the 3-year life of the website option 1 returns £865k, option 2 returns £700k and option 3 returns £130k.



Option 1 is best and option 3 is by far the worst quote, even though it's the lowest design & build cost.
But how do we know where the best return is?
 

For B2B business with turnovers above £1m there are 5 factors that greatly increase the likelihood your new website will deliver truly great results.

The agency building it specialises in B2B sectors
Senior staff run the design process (including avatar and value prop sessions)
Design is driven by customer insights & data rather than your preferences
The website is built in an enterprise level system (ie not WordPress)
There are advanced lead-gen / lead-magnet tools in the website
So if we're looking at quotes and impressed with how the agency is presenting on these kinds of topics we've a high chance of a good return on the project.



If the agency presents poorly on these topics, or if we're buying based on price or some other factor, we should expect low impact from our new website.

 

It's a fascinating topic for sure.



And remember So, past performance of your website is not necessarily indicative of future performance...if you buy websites as investments!How we buy websites
 

The classic mistake is to think of websites as commodities when actually they are investments with variable returns just like stocks and shares.



Consider these 3 examples:

Web agency 1
Design & build cost: £35k
LTV of new business generated: £300k/pa


Web agency 2
Design & build cost: £50k
LTV of new business generated: £250k/pa


Web agency 3
Cost to design & build: £20k
New business generated over 3-years: £50k/pa
So over the 3-year life of the website option 1 returns £865k, option 2 returns £700k and option 3 returns £130k.



Option 1 is best and option 3 is by far the worst quote, even though it's the lowest design & build cost.
But how do we know where the best return is?
 

For B2B business with turnovers above £1m there are 5 factors that greatly increase the likelihood your new website will deliver truly great results.

The agency building it specialises in B2B sectors
Senior staff run the design process (including avatar and value prop sessions)
Design is driven by customer insights & data rather than your preferences
The website is built in an enterprise level system (ie not WordPress)
There are advanced lead-gen / lead-magnet tools in the website
So if we're looking at quotes and impressed with how the agency is presenting on these kinds of topics we've a high chance of a good return on the project.



If the agency presents poorly on these topics, or if we're buying based on price or some other factor, we should expect low impact from our new website.

 

It's a fascinating topic for sure.



And remember So, past performance of your website is not necessarily indicative of future performance...if you buy websites as investments! 
 
Steve Brennan Author
Posted by
Steve Brennan
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