Whatever your business size and revenue goals, inbound marketing is a vital part of your business's profitability, growth, and overall success. And unfortunately, we see far too many companies fail to allocate enough of their revenue to their marketing budgets, and as a result, miss out on next level company and revenue growth year after year.
Now, we know exactly what you're thinking.
"Well, okay... so how much does a good marketing plan cost?"
I wish I could give you a straight-up, foolproof answer to that question right here, right now. I really do.
But the truth is that the question in itself is slightly misguided. Because marketing really shouldn't be viewed in terms of cost— it should be seen as an investment.
With inbound marketing, you aren't paying a fee in exchange for a limited amount of goods and services. With inbound, you're investing into the future of your company, not just this fiscal year but every year to come.
Inbound builds up your online authority, generates leads, builds your social media following, and grows your business and its revenue as long as your business is around.
Now, your next question...
So what does an inbound marketing strategy look like?
Develop Buyer Personas
A Buyer Persona is a semi-fictional representation of your ideal customer based on market research and real data about your existing customers. They encompass the needs, goals and behaviors of real and potential customers. We create and utilize Buyer Personas to tailor your marketing strategy according to your ideal clientele.
Map out Buyer's Journey:
The Buyer's Journey is the active research process a buyer goes through leading up to a purchasing decision. We map out the process and analyze the buyer’s behaviors, information needs and problems so that we can ensure our inbound strategy is effective throughout every stage of the Buyer's Journey.
Content mapping is the process we use to make sure that your content is generating and nurturing leads effectively. The goal of content mapping is to target content according to each consumer's characteristics (Buyer Personas are used to determine this) and where in the Buyer's Journey the consumer is.
Lead generation is the art of attracting people who fit your Buyer Personas to your business by providing them with enough relevant content to keep them interested in your company, and getting them on the path to eventually becoming customers.
Lead Scoring & Management:
Lead scoring is used to rank each lead according to their professional information they've shared with you (location, company information, contact information etc.), and their engagement with your company on your website and on social media.
Goals and KPIs:
It's vital to your inbound marketing strategy to have measurable short and long term goals to ensure that you are on the right track to meeting your overarching sales and revenue goals.
KPIs are Key Performance Indicators— metrics used to evaluate factors that are crucial to the success of your company.
Content Is Key
Once we develop and initiate your marketing strategy, it's time to start developing the content that will be driving all of your potential leads to your site and social media. The creation of this content relies on the handiwork of journalists, bloggers, graphic designers, social media marketers, and more.
This stage of investment is essential to growing your brand awareness and in turn, your online authority, thought leadership, and qualified sales leads.
Marketing Technology, Lead Management, Analytics
In order to keep track of each aspect of your marketing strategy and your leads, we use marketing automation software like Hubspot and personnel who are certified in operating the software to manage and update your marketing program, and provide you with insights and reports so you can see firsthand how effective your marketing strategy is.
This will require (depending on the size of your business) at least one full-time marketing strategist to focus on your marketing automation software and customer relationship management, and one web developer to maintain your website.
Again, there's no cookie-cutter guideline to a great marketing strategy. It's largely dependent on countless variables that are unique to your business. Let's take a look at a couple of examples to show how different factors affect a company's inbound marketing investments.
Company #1 is a lifestyle business which brought in $1 million in revenue last year. The business owner hasn't invested a lot on marketing because her company has had a significant amount of organic growth through networking, referrals, and trade shows.
She would be happy with maintaining the $1 million in revenue, however, there are some new competitors in her field who have recently opened their doors and she is finding that she is losing deals she's certain she would have gotten in the past.
So how much should Company #1 invest in marketing?
As much as you likely wish to hear differently, there is no black and white, guaranteed correct answer to this question.
It's important in this scenario to closely examine the goals of the business owner. Because of the nature of the business, she doesn't require a beefy marketing budget of 5-10% as some may suggest. She needs to focus on a few tactics that can use improvement and base her budget around a project orientation.
For example, if the business is in need of a website upgrade, she should account for this as a primary focus in the marketing budget, and decide upon 3 or 4 other marketing strategies that will help maintain and grow the company.
Another thing to keep in mind is that, despite her satisfaction with maintaining her current $1 million annual revenue, the reality is that if a business isn't growing, it's essentially dying.
Businesses that remain stagnant don't fare well in the long run, as she has already seen with her occasional loss of clientele.
Maintenance is not an effective strategy.
At the end of the day, the decision rests in the business owner's hands, and for that reason it is important to set a marketing budget that is reflective of the business owner's revenue goals, but leaves room for your professional input and suggestions.
Company #2 is planning on aggressively growing this year. The CEO, CMO and CSO have set a 2016 sales goal of $4 million.
Every year, they've invested around $50,000 in traditional outbound marketing strategies such as email marketing, PR agencies, trade shows, paid advertisements and so on.
So how much should Company #2 invest in marketing?
Since Company #2 wants aggressive growth, an aggressive marketing strategy and budget are fundamental. With the right marketing investment, the growth that the company is hoping for is certainly achievable.
In the past, they've spent $50,000 and gotten $2.5 million in sales. Now, if they wish to get $4 million, they'll need to almost double their marketing budget— setting it to around $100,000.
As we know, simply pouring more money into a company won't give us the results we're pushing for... how that money is spent is critical.
Traditional outbound marketing tactics are pricey, and it wouldn't take long to spend that $100,000 without having anything to show for it.
Inbound, however, isn't a simple cost, it's an investment.
Using an inbound marketing strategy, Company #2 can invest in a long-term strategy that will enable them to hit their sales goals this year and beyond.
Inbound will also help the business grow its social following, get better search engine rankings, earn their viewer's attention and trust, and more.
How much Company #2 invests in their inbound marketing strategy will directly impact their sales and whether they reach their goal for 2016. A goal as aggressive as theirs will require an aggressive investment in marketing.
What Works For You?
Marketing strategies certainly aren't a "one size fits all" investment. How much you invest in your marketing strategy is heavily reliant on the size of your business and your revenue goals.
Entrepreneur says you should invest 10-30% of your revenue on marketing.
FrogDog says 5% if you're maintaining, and 10% if you're growing.
Many other sources say 7-8% if you are a medium-sized business.
All of these percentages are approximate, based on many factors including how other companies invest and which marketing strategies they use.
These estimates will change based on specific industry, regions, markets and corporate plans. Most surveys show that digital marketing budgets are rising, so if you wish to stay ahead it's in your best interest to follow suit.
Inbound marketing's unique ability to deliver qualified sales leads in a way that is completely measurable and accountable has proven through countless organizations that it truly is the future of digital marketing.
The easiest way for you to get a more specific estimate is through a free consultation with us. Our team would love to review your website’s ROI factors and provide some tips to help you increase traffic, drive leads and maximize revenue, and discuss next steps with no strings attached.