Inbound Marketing: What ROI Can You Expect - and How Do You Measure It?

Posted by Amy Kenigsberg on Apr 20, 2023 10:50:00 AM

inbound-methodology (1)Or How to Get the Most Bang from Your Inbound Marketing Buck

While marketing budgets are growing and more and more companies are leveraging inbound marketing, many CEOs want to know: what returns are we getting out of our investment to prove that inbound marketing is the way to go?

 One, inbound has now displaced outbound in terms of clearly measurable ROI; two, the ROI areas prove the effectiveness of inbound marketing; and three, 10 metrics to consider when measuring inbound ROI.

Inbound vs Outbound: Why Inbound Is the Clear Winner

In terms of providing marketers with highly qualified leads at a fraction of the cost, inbound marketing has definitely outpaced outbound. Inbound techniques like content marketing, SEO, or social media deliver higher ROI (more leads, increased traffic, and greater sales revenue) for much less than outbound’s glossier but often ridiculously expensive magazine or billboard ads and television commercials, whose impact in terms of people reached and convinced to take action is difficult to measure or quantify.

Inbound ROI can be precisely calculated, while outbound’s ROI can be, at best, conjectures or guesstimates. Expensive campaigns with paltry or unclear results equals low ROI.

Inbound vs Outbound: It’s Easier to Measure, and More Effective

Inbound marketing speaks to today’s kind of buyers. Potential leads are hungry for information, which they prefer to get from more accessible online articles and videos rather than TV or magazines. Many are in social media, where marketers can spread their message and have it easily go viral for next to nothing.

The inbound methodology lets marketers:

  • Track the customer throughout the buyer’s journey and develop the appropriate strategies and offers to engage the customer as she moves through the sales funnel from site visitor to paying customer
  • Determine how many leads and web visitors it takes to get X number of customers each month
  • Take advantage of other difficult-to-measure inbound benefits such as: shortening the sales process via content that supports sales or positions the company as an industry leader
  • Ultimately impacting the bottom line with increased website traffic
  • Learn the lifetime value of a customer and discover how much to invest in marketing activities for each new customer
  • Achieve lower cost per customer acquisition
  • Secure more valuable leads and, consequently, more conversions and greater sales revenues

Measuring Inbound ROI: Metrics to Consider

Marketers, bear in mind one equation: high customer value + low acquisition cost = higher ROI. Consider one rule: to find out how well inbound marketing is working, measure ROI not as a one-time activity - but a long-term endeavor. Then take the following steps:

  •  Step 1 - Set success expectations with your CEO for in-house inbound marketers or your clients for outsourced inbound marketing company.

  •  Step 2 - using analytics, track the following:
    • Landing page metrics, including call-to-action clickthrough and visitor-to-lead-to-customer conversion rates
    • SEO efforts via keyword performance, unique traffic-driving search terms, organic and branded vs non-branded search traffic, inbound links, and organic search-generated conversion rates
    • Blogging results by looking at individual post views, blog traffic and traffic sources, call-to-action conversions, and blog-generated leads
    • Social media traffic, including number of interactions and social media visitors who converted into leads or customers
    • Email performance via bounce/delivery/click-through/conversion rates
  • Step 3 - factor in costs by:
    • Assigning real dollar values to abstract numbers: in the case of blogs, combine data of how many blog views lead to call-to-action clicks and, in turn, how many become leads and subsequently customers to determine how much one or a thousand views is worth.
    • Know how much is actually being spent. Remember, the cost includes not just the inbound marketing platform, but also the expenses incurred in content creation, office space, software, salaries, and other overhead.
  •  Step 4 - get ROI by subtracting total earnings from inbound marketing from the total investment and divide the result by the total earned

Whether you’re an in-house inbound marketer who wants to impress the boss or an outsourced inbound marketing provider looking to renew the client’s contract, remember that the higher the ROI, the bigger the chances of the CEO or client investing more in inbound marketing. 

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Topics: content marketing, content, marketing, persona, inbound marketing, customer communications

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