How Inbound Marketing Affects Your Bottom Line

Inbound marketing has become a critical marketing investment for most smart businesses. According to Hubspot’s State of Inbound Marketing Report, 86% of businesses indicate their blog is important to their business. Moreover, 26% of businesses indicate their blog is critical to business. Obviously, inbound marketing is becoming a highly affluent activity across all business models. However, many wonder how inbound marketing actually affects their bottom line. The most effective way to measure the impact of inbound marketing is through customer acquisition. In this case we can compare inbound marketing vs. outbound marketing. Take a look at the chart below.

To understand the impact of cost per acquisition your company should analyze the amount of leads required by the cost per lead and determine the differentiation between the two. You can also use the table below to identify impact of inbound vs. outbound marketing on your bottom line.

The table defines the potential savings using inbound marketing as lead generating techniques in comparison to outbound marketing techniques. Based on the 5,000 lead generating mark the distinction equates to over a million dollars in lead generation expenditures. When considering expenditures the goal is always to optimize expenditures by essentially cutting out the fat. Outbound marketing is the fattiest cut of advertising at present because it costs more and people have more control. Outbound marketing techniques cost significantly more because strategist must combat the multiple variables associated with message blockout whether it’s time, money, or technology.

We can also take the lead acquisition cost and delve into the distinctive marketing channels. A marketing channel is either a blog, social media, or sharing site. For example Blogs, LinkedIn, Google +, StumbleUpon, Digg, Twitter, Flickr (Need help with your Social Media channels? Check out our Free eBook!). By segmenting channels we are able to identify quantity, qualify, and the cost of campaigns. For example, according to Hubspot, industry verticals have a significant influence on the type or effectiveness of an inbound marketing channel. Interestingly enough, when comparing inbound marketing to outbound marketing Hubspot identified that at least three inbound marketing lead channels cost significantly less than those outbound marketing channels. Observe the chart below.

The above segments cost per acquisition data to determine whether the differentiation is a matter of specific lead pool or marketing technique. The chart illustrates that of the companies surveyed a higher percentage agreed that inbound marketing techniques (e.g. blogs, SEO, and social media) are significantly less costly per channel than outbound marketing techniques (e.g. Tradeshows, Telemarketing, and Direct mail). By testing the variables associated with the data sets we are able to access value propositions associated with inbound marketing as opposed to outbound marketing.

Understanding Inbound Marketing Data

Inbound marketing is simply one aspect of your business activities. However, when evaluating different companies within a business itself parts of the whole almost always have a significant impact on the collective. Therefore, at face value when you reduce the cost or spend on advertising and increase or maintain lead flow you are then either reduce expenses or create a surplus.

The Takeaway

Yes, inbound marketing saves you money and gives you more in return. However, beyond the obvious cost reduction and revenue gains, inbound marketing also creates a perpetual investment for your business that is both owned and controlled by you. Imagine the potential of a publication available for free meeting the informational demands of people not only within your local area but all over the globe. Prior to the internet the idea of expanding a traditional brick and mortar business required regional regulatory research and compliance, training, management, building development, and of course massive streams of capital to fund it all. Now today’s smart CEOs are removing domestic bridges via inbound marketing techniques. They publish, create, inspire, inform, and support the information age demand.

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