You know your business better than anyone. You know exactly what you want to communicate to your present and prospective customers and devote a lot of time to producing quality content and getting the right message across. Marketing automation makes it all happen. How can you quantify the results of your inbound marketing program to make sure you’re getting a solid return on your investment? This can be a little tricky; here are some smart pointers to track your inbound marketing efforts to maximize success.
Know that determining ROI is more than just tracking visits to your website, adding email subscribers and social likes. Since a smart inbound marketing program involves employing a host of marketing efforts — from blog posts, content offers, landing pages to social media — calculating its results can and should be a long-term effort. In fact, it can take six to twelve months to see tangible results from a well-crafted inbound marketing plan.
There are specific key performance indicators that you should closely monitor to measure marketing program success. These include:
- Marketing-qualified Leads (MQL): This is your future bread and butter – prospects who are a good fit for your products or services based on their industry, sales, size and content consumption. Nurture these contacts with content and establish trust. These represent promising leads that stand a good chance of becoming customers.
- Sales-qualified Leads (SQL): These are hot prospects – potential customers who, through your inbound marketing, have indicated they have a specific need and would like to speak with a salesperson. This number tells you a lot about the effectiveness of your program!
- Opportunities: These represent the next phase of qualified-sales leads — namely
prospects who have engaged with the sales team and are actively interested in
becoming customers. This gives you a solid indication of who is likely to become a
- Customers: This is the finish line – a lead converted to an opportunity
who becomes your customer (deal closed). It’s the number that truly matters; it tells you how effective your inbound marketing program truly is.
Tracking the Metrics
Chances are you’re already using tools like Google Analytics, WordPress, MailChimp, Hootsuite and a CRM to gauge the effectiveness of your marketing. But to effectively determine your true ROI on all of your marketing efforts, you need marketing automation software, such as HubSpot or Pardot. These software platforms offer closed-loop reporting that tracks the effectiveness of all digital marketing channels like organic search, paid search, social media, email marketing and more. Plus, it houses your contacts and a detailed history on all of their interactions with your website – in one platform. Now that’s powerful!
Remember that measuring the effectiveness of your inbound marketing plan isn’t a one-shot effort; it’s essential to measure your results by month, quarter and year to accurately gauge the effectiveness. You might also want to quantify your inbound marketing effort with an annual and lifetime value per customer. These are important metrics that may change over time, so monitor them closely and adjust as needed.
Dollars and Sense
Determining your costs is vital to calculating the effectiveness of your marketing program. Inbound marketing is an expenditure — albeit an essential one — with a perceived ROI, which should pay dividends. As such, you need to calculate your expenses before you determine the monetary payback. Pay attention to these costs to help you get a clear picture of what you’re spending and earning from your inbound marketing effort:
• Technology: This includes marketing and CRM software and related
subscriptions. These are easy to track as they represent mostly fixed costs.
• Content Creation: Whether you use employees or freelancers to generate your
creative, these are expenses that need to be carefully tracked and figured in to
your overall inbound marketing expenses.
• Social Media Expenses: Posting and monitoring social media takes time,
and time is money. Take a close inventory of the hours spent orchestrating your social media program. And don’t forget paid media ads and posts.
• Email Marketing: Again, assess how much time is spent developing concepts,
expediting the creative, and monitoring the response from every email marketing
Be sure to account for all expenditures related to your inbound marketing program, and subtract these expenses from your annual and lifetime sales to determine your ROI.
Here’s a sample quarterly report
|Website Page Views||2,154|
|Marketing Qualified Leads (MQL)||34|
|Sales Qualified Leads (SQL)||14|
In this example, with an annual value of $15,000 per customer and 5 closed customers, your inbound marketing efforts from one quarter generated $75,000 in annual sales and $225,000 in lifetime sales. All from a marketing investment of $30,000. Try getting a return like that with old-school marketing like print ads!
Remember that each inbound marketing plan for every business is different, generating its own level of expenses in anticipation of return on investment. The bottom line: Like in carpentry, measure twice, cut once. Keep measuring your costs, make adjustments as needed, and compare your expenses to your tangible results. Revise your systems when necessary and adjust accordingly, and you’ll be able to accurately calculate the return on your inbound marketing investment. It’s just smart business!
Interested in learning more about inbound marketing for your business? Contact the experts at Brainstorm today for a free inbound marketing evaluation.