How to Optimise your Marketing Investment with Inbound Marketing

Most people have pretty much already made up their minds about what and from whom they’re going to buy before they even contact a sales rep.

The traditional marketing playbook is broken

That’s a problem. Because the tactics we’ve been using for the past 20 years don’t work anymore. The buyer is in total control. They choose what to watch, when to watch it, who to listen to and what to read. And worldwide legislation even supports that with privacy and security laws, e.g. CAN-SPAM Act, EEU Cookies and “DO NOT CALL REGISTRY” among others.

What’s the answer? Inbound Marketing.

How do we build so well that we reach buyers on their terms?

With permission-based inbound marketing.

It works, and here’s proof:

Inbound costs at least 40% less per lead than traditional marketing.

As an example, HubSpot, a leading marketing platform vendor, has collected data from among all its 13,500 customers. That analysis shows that the cost of leads generated with inbound marketing is less than the cost of leads generated using traditional marketing tactics.

Source: HubSpot, 2014 State of Inbound Marketing.

Here’s another very telling statistic. HubSpot also discovered in their analysis that regardless of whether a company is B2B or B2C focused, companies that blog (a leading inbound marketing tactic), generate far more leads than those that don’t.

Source: HubSpot, 2014 State of Inbound Marketing.

It works because it’s a holistic, data-driven methodology that leverages how people buy today. Holistic because it covers every part of the buying process. Data-driven because we’re able to capture behavioural data that tells us precisely what people are doing.

Inbound Marketing Creates DIVIDEND-PRODUCING Long-Term Assets

A CFO’s kid is having a birthday party and wants a zip line in the backyard. What does the CFO do?

What any self-respecting CFO would do. He goes to Google and searches for “zipline backyard rentals”.

Google gives lots of sites — and a whole bunch of ads from companies wanting to sell him something. But he wanted to rent a zipline.

The thing was, one listing was different. It was a company with a blog post that talked about the different zip line trolleys and which one to choose. And it talked about why galvanized aircraft cable was the best and safest type of cable to use.

Intrigued, this CFO read more on this blog and even found a few videos posted by this company’s customers.

Impressed, he went through the site and discovered he had lots of choices. And because they were so inexpensive — cheaper than renting, which is what he was intending to do, he decided to call the company.

At this point, he’s pretty much decided to buy from them. He’s just trying to figure out which one would be best for his situation and whether he can do it himself or not.

After talking with the sales rep, he discovers it’s easy to set up and still be safe for his kids.

He finds the perfect choice and buys it online. He’s thrilled because now his kids can have fun all the time instead of renting something for a day that was more expensive than buying.

Has something like this ever happened to you? Have you ever searched for something you needed online, found a company that gave you great information so you learned a lot? And ended up buying from them?

That's Inbound Marketing at work!

Assets that Inbound Marketing creates

This is a classic example of how inbound marketing works. This is what most buyer’s journeys are like. And it’s why inbound marketing is so effective. Because people will find us wherever they are in their journey.

These trends and buyer preferences are forcing us to dig a well for water as we’re running out of it. (Metaphorically speaking of course.) The good news is, we’ve got the solution for digging that well faster and better!

How do we build that well so we reach buyers on their terms?

Why Inbound is a better marketing strategy than PPC

The math of PPC vs. Inbound...

When you look at the math behind both tactics, you see a tremendous difference. PPC stays steady – what you spend is predictable and reliable. You know if you spend $1,000 per month (as in this example), you’ll generate 30 leads per month at a cost of $33.33 per lead.

Unfortunately, that can change at any time as keywords become more competitive. You either have to spend more to get the same number of leads or accept fewer leads at a higher cost per click.

But with inbound marketing, publishing 1 article could generate 10 leads in its first month. And it will also generate additional leads every month. As will each subsequent article.

When you add up your total investment of $12,000, and all the leads that were generated over time cumulatively by all those articles – inbound marketing has generated more than twice the number of leads each month. All while investing the same $1,000 per month to publish them, share them on social media, and include them in lead nurturing workflows. Inbound marketing, in this example, is almost half as expensive.

These numbers are merely illustrative. We don’t have enough data yet to predict what our rate will be. When we do, we’ll then be able to create a predictable model and invest accordingly.

PPC vs. Inbound

PPC is like paying rent on a lead generation factory. You get leads as long as you pay the rent. But the rent can be unpredictable and go up at any time if other tenants are willing to pay more for that space.

Inbound marketing, on the other hand, is building a lead generation factory. One that continues to produce leads, long after its assets have been produced with minimal to no additional resources on our part. How is this possible? Because of search engine page rankings and the native virality and growth of social networks.

We know that it takes an average of six months before a company starts to see a significant increase in the number of leads it generates with inbound. Again, we won’t know precisely where our crossover point will be until we’ve tracked enough data and analysed it.

Do you want to Rent or Own?

Pay-Per-Click or PPC (RENT)

• Rent search engine placement to generate leads.
• Immediate depreciation.
• Rates can change; go up with the competition (bidding).
• No budget? No leads.
• No residual benefit. Once spent, it’s gone.

Inbound (OWN)

• Long-term assets keep generating leads without more investment.
• Increases the company’s overall value with a predictable lead generation method, system, and process.
• Get the same PPC data, and more (An inbound ecosystem tracks behaviour and actions more thoroughly).
• Can attribute behaviour to revenue generation.

As we build our inbound marketing factory and put the systems and processes in place that follow the methodology, we will fine-tune our marketing mix to leverage inbound marketing’s strengths – which are generating and nurturing leads until they are ready for Sales to close. By its very nature, Inbound marketing and the software tools we’ll use enable us to gather intelligence on our visitors and leads so that Sales can close more highly qualified leads, faster.

These are the reasons why we will be minimising our investment in PPC. We want it to complement what we’re doing with inbound so they work together. But to do so we have to take advantage of each strategy’s strengths and minimise their weaknesses.

In PPC’s case, it can be a very volatile and unpredictable strategy, depending upon how competitive the keywords we’re bidding on are. And while our investment could stay the same, the volume of leads we would generate will probably decrease. Or, we could spend more on PPC to get the same amount of leads. 

Either way, it’s not as stable as inbound marketing. PPC also doesn’t build long-term assets. Once we stop paying for clicks, leads dry up. Our investment depreciates instantly. Moreover, because it can be so volatile, it doesn’t give us a sustainable business advantage.

If you'd like to learn more about inbound marketing, we highly recommend downloading our Executive Guide to Going Inbound below: