Let's talk about the bottom line, shall we?
If you're reading this, chances are you know what inbound marketing is and you think it could be a good way to add to your business' growth. As part of your research and due diligence I'm guessing you also want to understand the costs involved to implement an inbound marketing strategy, how they relate to the return on investment and make sure you are set up for success before you move forward.
As you may have suspected, the real answer is "it depends" and every organization's situation is different, and the simple answer would be "it depends on your business' growth goal."
COMPONENTS TO SUCCESSFUL INBOUND MARKETING
To understand what affects the portion of your budget that goes into your content and inbound marketing, it's helpful to know what's involved. There are typically 5 components which must be in place to set yourself up for success. While not all of them are essential to do at the same time, you will get more traction, and benefit from the power of inbound after you've got all five of them covered.
1. Inbound Marketing Strategy
Call this what you will; the GamePlan, the Strategy Blueprint, the Foundation, the bottom line is that you need to create the base before you start building on it. Whether you do this in-house, or with the help of an inbound marketing agency, this strategy phase would usually include the following steps:
- An assessment of your current situation (current traffic, lead conversion, close rate, customer lifetime value, etc.)
- Do competitive analysis
- Do keyword research
- Develop buyer personas (aka your target audience)
- Create a marketing budget (based on your revenue goals)
- Determine which social media channels to use
- Define SMART goals
- Create a sample editorial calendar
The duration of this phase depends on factors such as the number of buyer personas and the complexity of the business and sales model. We will often start with just one primary buyer persona to get things rolling and be able to complete this first phase in around 4 weeks. Then we'll develop additional buyer personas over time. Strategy projects can range from $6000 to $20,000. We suggest that 10% - 15% of your overall budget for the first 12 months be invested here. (The worst case scenario is that you find that it might not work and you save your business 85% or more than if you had plowed ahead with no strategy in place).
2. Marketing Automation Software
To do inbound marketing, you're going to also want to use some type of marketing automation to measure your results and make your life significantly easier. Here at Denamico, we use HubSpot software for ourselves and our clients. Other marketing automation software commonly used include Pardot, Marketo and Eloqua.
HubSpot pricing starts at $800/mo for the Pro version and goes up to $2400/mo and more for the Enterprise version. Choosing the right version is dependent upon the number of contacts you have 'in your list'. And of course, the more expensive versions have additional bells and whistles, such as A/B Testing and Predictive Lead Scoring.
Regardless of which marketing automation you choose, having it integrated with your CRM is the only way to really close the loop, and know what's working. The other big benefit to marketing automation is the ability to automate tasks, so segmenting your list and nurturing your list is done by the software, something which would be nearly impossible to do without automation.
3. Build the Engine
Once you've got your strategy, you need to setup HubSpot, or whichever marketing automation software you're using, so it can be your lead generation machine.
If you're working with us or another agency, you'll often get the details you need for this as a result of doing the strategy project. The deliverables from this phase include:
- Buyer persona setup in HubSpot
- Writing the content offers for your campaign
- Writing the lead nurturing emails to go with each of the content offers
- Creating the email workflows for the campaign
Factors that influence the cost of Building the Engine phase include:
- How many buyer personas you have
- How many content offers you're using and who is writing them
- How many lead nurturing emails you need and who is writing them
- How complicated are the email work flow campaigns? And how many are there (depending on number of target audiences you have)?
4. Inbound Marketing Services
Have you ever wondered how inbound marketing agency pricing is structured? While I can't answer for all agencies, I can explain how we calculate that at Denamico.
To begin with, we evaluate your present lead generation tactics to understand what is working well, and then we calculate the cost and the return on budget dollar spent. We look at two numbers; the Cost of Customer Acquisition (CoCA) and the Lifetime Value (LTV) of a Customer. Those two numbers give us a benchmark of where we're starting from in terms of the ROI of the current marketing efforts (you can download this eBook if you want to calculate them yourself) and give us a target of where improvements can be made.
Then we speak with our clients to confirm their revenue growth goals. Are they looking to add $300,000 to their revenue? A million dollars? Ten million dollars? And in what time frame? This helps us determine the level of effort needed to reach their goals.
Finally, with our strategy in place, and our goals set, we have an idea of how much work it's going to take to implement the plan. While inbound marketing tactics are pretty much the same for everybody (B2B, B2C, in-house marketing teams, or an agency) the amount of work, and level of sophistication, can vary greatly.
We all create campaigns using blogging, offers, social media, and email newsletters, but some of the factors which can affect the cost of doing those things include:
- Who is writing the blog posts? And how many are written per month?
- Who creates the copy for social media and newsletters?
- How active do you want to be on social media?
- How many buyer personas do you have?
- How big is your current reach? Is your content already being shared? Do you have existing relationships with influencers in your industry or do we need to build those?
- Are we using paid search as well? And what is the budget?
- What kind of reporting are we doing each week/month?
As you can see, there are many variables. The cost (whether insourced or outsourced, or a combination of the two) can start at around $4000/month and go up to over $20,000/month depending on how quickly the sales team needs that higher quality and more consistent flow of leads to reach their quotas.
The biggest challenge here is finding and balancing the diverse and hybrid set of skills to get it done. Apart from the ongoing strategic work that needs to happen, the team required for content creation and lead nurturing needs to be creative, data-driven, savvy with technology and consist of great content creators. In addition, website design, coding and graphic design will be required on an ongoing basis for the conversion optimization of your website.
5. A High-Performing Website
Whether your website is built on Wordpress, Hubspot's COS, or something else, a high-performing website works as a sales tool and helps you convert more traffic into sales-qualified leads. It should help visitors know who you serve, and who you don't.
And for the visitors who are looking for whatever it is that you have, it should lead them through the sales funnel with numerous opportunities to convert, through helpful and educational content. Finally, because high-performing websites have so much useful information, they help to shorten the sales cycle.
Some of the things which can affect the price of a website include:
- Whether there are existing brand assets (logo, high-quality images, messaging, style guide, etc)
- What platform is being used
- How many pages need to be built
- Whether the site is being migrated from another site or built from scratch
- What additional functionality needs to be incorporated (shopping cart, surveys, video, etc)
The price for a new high-performing website on COS starts at about $20,000 and goes up depending on the factors above. It is not unusual for an E-commerce website, with dozens of products, to cost $100K and an average of $60K per year or more ongoing. The important number to keep monitoring is the ROI for each investment. If you know what your Cost of Customer Acquistion (CoCA) and Lifetime Customer Value (LTV) are, you've got benchmark numbers you can keep trying to improve.
BACK TO THE BOTTOM LINE:
This is where I compare the pricing of inbound marketing to love; it's complicated. But it's also pretty straight forward. It depends on your starting point and where you want to get to. And the good news is that you can do it in stages and your results will just keep getting better the further along you are in the process.
If you'd like to know more about inbound marketing, strategy, marketing automation or websites and how they could help your business sell more effectively, drop us a line, we'd love to hear from you.