So you’ve decided to embrace inbound marketing as part of your digital marketing strategy - great! You’ve identified your personas, created a content strategy and are busy writing and sharing informative content that delivers value to your customers. And you know it’s working, too: there’s a definite increase in leads, and more and more people are converting to customers. So far, it’s all heading in the right direction!
But just knowing that things are going well probably isn’t enough for your boss. They want stats, numbers and hard facts to prove that inbound is working and to approve your future budget requests. But with 40% of marketers saying that proving the ROI of their marketing activities is their top marketing challenge, how exactly do you measure your inbound marketing service ROI so you've got actual figures to put in front of your senior team? Read on to find out!
The basics of measuring inbound ROI
First things first, we’ve said it before and we’ll say it again: when it comes to inbound marketing, Rome wasn’t built in a day. Inbound marketing is not a quick campaign or a one-off promotion that delivers results instantly - rather, it's a long term project that requires time, patience and your ongoing attention. In fact, according to HubSpot, 85% of companies using inbound marketing services see an increase in their traffic within seven months - so don’t expect to see any tangible results until then at least. However, with inbound generating more than twice as many leads as outbound and 92% of companies using inbound reporting an increase in their traffic, we promise all the hard work will be worth it!
Inbound marketing services provide a multi-channel approach that uses lots of different networks and platforms to drive traffic, so it can be hard to keep on top of soft metrics and know what’s going on where, making it difficult to measure results. That’s why we’d always recommend identifying your goals at the beginning and building a measured and empirical inbound marketing plan that can achieve your goals on a quantifiable basis.
Tracking your metrics
We know that it can sound like a pretty daunting task - but actually, tracking your basic metrics really doesn't have to be that difficult. And the good news is, if you’re already using HubSpot or another inbound marketing platform, you’re already equipped with all the tools you could possibly need - even if you don’t know it!
In the past it was pretty hard to calculate marketing ROI and there wasn’t any way of really knowing how many sales came from a billboard or magazine ad. But inbound offers all the analytics you need to discover everything your boss could ever want to know about your digital marketing activity, with platforms such as HubSpot including a powerful analytics system which monitors and analyses all of your traffic that is then broken down by channels. That means you can understand your prospects’ entire journey and create reports that your CEO will love.
What to measure (and why)
Generally speaking, what you measure will depend on the business goals - but for most companies, top priorities include traffic, leads, new customers and sales. To get the most out of your analytics, you need to identify the numbers which are most important to your goals and assign a monetary value to your metrics by calculating things such as the value of a website visitor or a new contact, whilst also looking at soft metrics such as user engagement and awareness.
For example, how many of your page visitors are clicking on calls-to-action and ultimately becoming leads? By determining how many of your leads are converting to customers and examining the lifetime value of your customers, you can calculate the exact value of a visit to your website.
KPIs that you should be tracking each month include new leads, marketing qualified leads (MQLs), sales qualified leads (SQLs), how many new opportunities and how many new customers you are getting on board. You should also consider measuring your customer acquisition costs (CAC) by adding up your advertising and marketing overheads and dividing it by the number of customers for a set period of time as well as the customer lifetime value (CLV) so you can calculate your ideal monthly revenue and if you are on course to hit your targets.
Factor in your costs
Without accounting for costs, you can’t get a realistic picture of how well your inbound strategy is performing. In order to successfully calculate your inbound marketing ROI, you’ll need to understand your sales and marketing costs such as salaries and freelance rates, technology costs (such as CRM software), marketing spend and how much time you’re spending on your marketing. Once you know these total costs, you can divide them by the total of new visitors, contacts & customers you get over that period of time so you know exactly how much each new phase of your funnel is costing the business. This will help you make better investment decisions and will also help you plan your growth in a more systematic and controlled way.
Although it might seem daunting, thanks to the inbound marketing software available today calculating your inbound marketing ROI doesn’t have to be a stressful experience. If you'd like to find out more, contact one of our team today for a free marketing health check and find out how you can get the most out of your marketing spend.