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Inbound Marketing ROI – Justifying your Marketing Expense

by | 11/08/16 | Inbound

Developing a sound inbound marketing campaign is tireless work but you know the end result is increased revenue for your company. The problem is, it can be difficult for you to prove to everyone else that the time and money invested will pay off. You have all of the tools you need to prove a solid ROI, you just have to know which analytics matter most to upper management or your company’s owner. The analytics you rely on to measure your success are not the same language people controlling the finances speak, so we’ve put together the analytic tools that will help you promote the ROI for your marketing efforts and gain the support you need to be a great success.

Inbound Marketing Metrics to Promote ROI 

You certainly consider the costs involved in your inbound marketing strategies, but the metrics you rely on involve mostly figures relating to the number of people you are attracting, how great their response is and how many of those become qualified leads. While these are all essential, the people holding the purse strings want to see what the costs will be and what the net result will be- they have little interest in how you’re going to get there. To create a presentation that will wow your boss or management team, give them the following:
  1. Cost of acquiring a customer (CAC)- This will include all associated costs for marketing and sales divided by the number of customers acquired.
  2. Actual cost of marketing- Take the CAC and express the marketing-only portion as a percentage. This is helpful for your boss to put marketing into a relative position and allows you to keep track of increases and decreases so you can re-evaluate as needed.
  3. CAC compared to the value of customers over time- Especially important for companies that rely on repeat sales, this figure is an estimate of the total spend per customer over the expected lifetime expressed as a ratio of the CAC.
  4.  Length of time to earn profit over CAC- Determine your break-even point once the CAC has been recovered. Most financial leads want to see a figure of less than 12 months.
  5. The percentage of new business generated by marketing- Calculate the percentage of people who became customers directly as a result of your lead generation efforts. This figure is excellent to prove marketing over sales departments if your efforts are successful.
  6. Marketing influence- Not all acquired leads will convert based on marketing alone. This figure should include all new acquisitions that started with your marketing efforts, even if sales closed the deal.
Although it sounds like a considerable amount of work, these metrics are easily found within the analytics you use every day to measure and test your inbound marketing efforts. While they’re helpful to you so you can monitor your budgets and ensure you’re on track, they’re powerful tools to prove ROI to your boss or management team.

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