Is My Inbound Marketing Investment Paying Off?

Posted by Rich McElaney

In my last post, I wrote about one of the more frequently asked questions about Inbound Marketing – (you can find that here) – and wanted to follow that up with another oft-asked question – how will I know if my inbound marketing investment is paying off?

inbound marketing success

The process of measuring success with Inbound Marketing, while having common elements at a high level, really needs to be unique to each company at the granular level. Ideally, there should be a direct correlation between the objectives a company has set and the metrics they’ll use to determine success.  There will also be variations in the metrics used by each functional area in the company – e.g. sales may be looking at lead volume, lead quality and lead cost, while customer service is concerned with complaint volume, resolution time and cost per incident handled.

Once the link between objectives and metrics is firmly established, there are several steps in setting up a basic measurement process that will provide insight into inbound Marketing’s financial impact.

  1. Set a baseline for key metrics prior to launching the strategy.  Using one of the metrics mentioned above as an example, you’ll want to know what your current cost per lead is prior to implementing your inbound marketing strategy to get a clear picture of the strategy’s impact over a set period of time.

  2. Make sure your data collection methods have been tested and are providing you with the information you need to accurately measure change. The items on this list can range from embedding the right tracking urls in your campaigns to ensuring that the various tools and platforms you use are integrated in order to provide seamless performance data.  For example, you might rely on webinars to drive leads and you use Constant Contact for the campaign emails, GoToWebinar for hosting the presentations and HubSpot to build the landing pages for post-webinar follow up. You want data from each platform to provide the complete analysis of the lead generation impact of your webinars.

  3. Factor costs into your performance data to get a true picture of the financial impact. You’ll have hard costs that are easy to factor in but invariably you’ll have soft costs that may not be as obvious but need to be accounted for to get the complete picture.

Here’s a hypothetical example of assessing Inbound Marketing’s impact that may help you with your measurement efforts:

Company A – Assessing the financial impact of webinars in lead generation

  • Baseline cost per qualified lead from traditional marketing efforts:  $275

  • Webinar lead generation performance – six events per calendar year:

  • Attendees: 850

  • Qualified leads: 65

  • Webinar costs – GoToWebinar subscription (fully allocated), Constant Contact pro-rated subscription, HubSpot pro-rated subscription, content development, graphic design and pro-rated internal staff support: $8,950

  • Webinar cost per qualified lead: $133

  • Reduction in cost per qualified lead: 51.6%

It’s important to note that this scenario uses an interim performance measurement in justifying the investment. Top management at Company A is focused on the bottom line and thinks in terms of Return on Investment. Let’s say the typical sales cycle at Company A is 9 months - from generating a qualified lead to closing the sale. In order to keep management committed to the inbound marketing strategy, the reduction in lead cost is the key metric until the point in time that sales are generated from the webinar leads. At that time, it will be possible to run a full ROI scenario from this webinar initiative and add that data to the overall performance assessment.

Keep in mind that this is a simplified scenario and focuses on just one aspect of an inbound marketing strategy. Many businesses struggle with making sense of their investment in inbound marketing and social media. The key is to collect the data, analyze the results in light of business objectives and refine the process over time for sustained inbound marketing success.

I came across an excellent eBook published by Radian6 that takes a deeper dive on the ROI discussion. There’s a great case study in it highlighting Sea World San Antonio’s use of social media to launch a new roller coaster and it gets into the specific performance of the campaign. You can download it here.

 

 

Tags: inbound marketing ROI, inbound marketing success, inbound marketing, social media measurement