Inbound marketing is expensive. There’s research on keywords and voice, blog posts to write, downloads to create and status updates on Facebook, Google+ and maybe Twitter or Pinterest. There is also lead tracking, follow-up email campaigns and a hand-off to your sales team. All of this costs time and money, so a good inbound campaign can easily range from a few thousand dollars on up to almost infinity.
If you are considering making an investment in an inbound campaign, don’t write a check until you evaluate the potential return on investment, or ROI.
Start with a look at your average customer
- Do they need your product often? If customers are frequently in buying or investigating mode, inbound marketing is a great way to stay in front of prospects and feed their need for information.
- What is a customer worth? Inbound marketing works well for companies where customers are likely to make repeat purchases. The initial investment to bring them into the fold pays dividends year in and year out. Inbound marketing can also be beneficial if the initial purchase has a high dollar value.
What does your sales process look like?
- Closing Rate: When you get a lead, what percentage of the time does that lead become a sale? Your closing rate will determine how many leads you need. It won’t do you any good to generate hundreds of leads if you don’t have a good process to convert the lead into a customer. Before you invest in an inbound marketing program, you might want to improve your sales skills.
- Purchase Cycle: Do you have a multi-step process or do you typically close a sale on the first interaction? Inbound marketing combined with marketing automation is a terrific way to move prospects from one phase of the purchase process to another. As you consider the investment, look at the off-set in your sales process. The right automated email can help you reduce the number of calls you have to make. Time is money, so put a value on that and add it to your ROI evaluation.
Where are you now?
- Assess your current state: What is your monthly web traffic, level of social interaction and average number of requests for information?
- Be realistic: This process works, but it won’t work miracles. If you currently average 3,500 visits/month to your site, it is going to take some time or a lot of money to build to 10,000 or 20,000.
- Understand the difference between intermediate goals and results: Likes on Facebook and fans on Twitter are the first step in the process, but they only become valuable when people act on the content you are sharing. Traffic to your website is important, but time on site, and ultimately completion of a conversion form is what defines success.
Still interested in inbound marketing? Download our Inbound Marketing Budget Worksheet to see if this type of program makes sense for you. Or sign up for our Inbound Budget and Planning Seminar on November 20.