One of the main things that makes online inbound marketing attractive is that it's extremely inexpensive, especially when compared to terrestrial marketing. Television ad buys cost thousands or millions of dollars. YouTube is free. Direct mailing still can run into the hundreds, but Facebook and email are free.
Well, to be accurate, they're free-ish. The channels themselves cost nothing to utilize but, of course, you still have to pay for the content and management in some way or another. And that's the issue: the costs do start adding up.
Do inbound marketing long enough,and you're going to start spending money. First you might invest in analytics software, like Hubspot. Or you might hire a content writer so you don't have blog yourself. Or you might even look at inbound marketing pricing from a full internet marketing service.
Either way, there's going to be a point you start looking at your budget and trying to decide if inbound marketing pricing rates are worth your while. Let's see what that means for you.
Calculating The ROI On Inbound Marketing Pricing
If all you're interested in looking at are the dollars and cents, it's actually quite easy to work out whether the inbound marketing pricing rates you're paying are giving you a return. It's a four-step process:
Calculate the Total Lifetime Value of each customer you gain. This is basically just an average of the profits you get from a new customer over the course of their business relationship with you.
Figure up the costs involved in attracting a new customer. This is effectively your total online marketing investment, divided by how many new customers it gets.
Subtract the costs from the TLV to see what each customer, on average, nets you.
Finally, divide this number by your total online marketing investment. If you get a number that's above 1.0, congratulations! You're in the black. (Specifically, 1.0 exactly means you're breaking even. Getting a 2.0 means you're getting a 200% return, and so forth.)
With a few minutes in your sales database, you can pretty quickly get an idea of the returns you're making on your inbound marketing. If it's not turning a profit, you probably need to look into changing some things around.
However, there's something else to consider:
There's More To Inbound Marketing Pricing Than Just Sales
Yes, fundamentally your sales are what drive your business and it's your ultimate aim with any of your marketing strategies. However, inbound marketing also provides a number of "intangible" returns which are difficult to exactly quantify, but are also inarguably important aspects of your business plan. For example:
Brand-building: Your online marketing efforts are one of the biggest determinants of how Internet visitors view you. A blog that does not garner many sales, but gives you good PR and builds engagement is still doing you a lot of good.
Improved SERP results: The higher you are on Google and Bing, the better. If you're not on the first page of search results, less than 2% of searchers will even see your website. Getting higher SERP results is worth paying for by itself.
Social media outreach: Making any direct sales through social media is difficult, but it's by far the best way to "wrangle" your fans and keep them in the communication loop for any announcements you may have. On a pure cost basis, social media is hard to justify, but the overall benefits it provides can be profound.
The True Returns on Inbound Marketing Pricing
Inbound marketing is an all-in-one "umbrella" solution to a lot of different online marketing woes. Your ROI is an important element to consider, but don't solely rely on accounting when making a decision about inbound marketing. The overall benefits are greater than the sum of its sales.
Is it worth losing money on inbound marketing for the sake of PR and other intangibles? What do you think?