Many businesses balk at the idea of hiring an inbound marketing agency, and more often than not the objection comes down to the perceived costs. The perception – which is in fact incorrect – is that inbound marketing d activities such as social media and blogging, are unquantifiable by their very nature. This leads some businesses to doubt whether inbound marketing is a cost-effective investment compared with, say, a direct mail campaign, where the ROI is more predictable.
In this article we will show why these misconceptions are wrong. Inbound marketing is a highly precise and quantifiable set of activities, in which costs and ROI can be calculated accurately. In doing so we will explain how inbound marketing offers your business a fantastic ROI and that it is one of the most affordable and lucrative of all marketing methods.
Costs per lead from inbound marketing
The affordability of any sales or marketing activity comes down to how much on average it costs to generate a lead. The less a lead costs, the more effective the method is and the better return you get from your investment. Hubspot’s annual State of Inbound Marketing Reports offer a revealing insight into the overall costs of different marketing methods.
For traditional, outbound marketing methods, the average cost per lead between 2010 and 2015 was around £235.1 These methods include online and print adverts, direct mail and trade shows, among other direct marketing techniques.
Inbound marketing, on the other hand, cost an average of £90 per lead over the same time period. Inbound marketing activities covered by the report included blogs, social media and organic search (SEO).
Obviously these costs are generalisations based on varying reported figures, but they do point out an undeniable fact. Inbound marketing methods are, on average 60% cheaper than their outbound alternatives in generating leads.
Why is this?
There are a number of factors that contribute to making inbound marketing more affordable than outbound. Here are two of the most significant ones:
1) Fewer upfront costs: many of the methods used in inbound marketing are free or cheap to use, such as Facebook and WordPress. Outbound methods such as direct mail, on the other hand, involve significant upfront expenses before a single lead comes through the door.
2) Warm leads versus cold leads: inbound marketing is not invasive or coercive. It does not take your brand message directly to your target market in the way that telemarketing does. Rather, it generates a network of online content that encourages your market to come to you. Therefore, the leads generated through inbound techniques tend to be ‘warmer’ than outbound leads and are more likely to convert into paying customers.
The result is a greater increase in web traffic, more conversions, increase sales and greater return for your investment.
The benefits of hiring an inbound marketing agency
So, if inbound marketing is so cheap and cost-effective, why hire an agency at all? Why not do it yourself? The answer to this comes down to economy of scale. While most social platforms are free to use, the majority of CRM packages and analytics applications are not. Plus, a tool is only as good as the craftsperson who uses it. An inbound marketing agency employs a team of professionals who dedicate their working lives to effectively using these platforms to increase growth for their clients. This knowledge comes from extensive practical experience and training.
Also, inbound marketing is a time-consuming activity. Creating content, researching your market, publishing through the right outlets and stringently analysing your results is a process that takes many man-hours.
To do inbound marketing right, you will need a dedicated team of 30 to 50 marketing pros working solidly on your campaign, to get you the results you need.
How much would such a team cost if you hired them in-house?
At the time of writing, the national average wage for a marketing assistant is £17,000-£25,000. An executive can be paid £20 - £30,000, with a manager taking home £30 - £40,000 and a director being paid £40,000 plus.
Let’s say you wanted to build a marketing department to include a director, manager, two executives and an assistant - this is a sizeable investment for any small business.
When you consider that this is the sort of marketing muscle you have access to when you hire an inbound marketing agency, then the relative costs of put in perspective. By investing your marketing budget in an agency partnership you get the benefits of a highly trained, specialist team of professionals, operating a proven and highly successful toolkit of marketing techniques on your behalf. Even if you do have the money to invest in an in-house team of this size, it is far more effective to hire an agency partner. You could gain the same or better results at a tiny fraction of the overall costs.
Regardless of the size of your business and your line of work, the results from inbound marketing are likely to be phenomenal, and far more effective than if you spend your money on other forms of marketing, or tried to go it alone.
