Select Page

Now you are someway into your inbound marketing process, how do you measure the inbound marketing ROI on your activity to date? You probably based your expected results on (so-called) industry-standard benchmarks. Then flowed these down to your inbound marketing goals, objectives and finally tactics. So, has the inbound process been a success (or not)?

You could have a mass of data on-site and social visits, clicks and leads but these are tactical performance indicators. They show if you are achieving your inbound marketing objectives but they are not relevant to a top-level measurement of inbound ROI.

What Are Your Marketing Costs? – The Metrics

To run an inbound marketing process you will have (as a minimum):

  • Some sort of hub for your content (usually a website)
  • A content strategy and content production process.
  • Some way to ensure prospects can find content.
  • People with the appropriate inbound marketing skills.

All of these have a cost.

The cost of building a website is easy to quantify, the cost of maintenance less so. Technology changes (and breaks) and there are technical SEO issues to address.

The cost of building a content strategy should be easy to quantify but inbound content creation costs are more difficult to isolate. Don’t forget the internal content management costs and the time technical and operational personnel spend on providing content guidance.

What were the costs associated with delivering content? These costs can be substantial and include:

  • SEO (internal or outsourced) including technical SEO costs.
  • Social (and/or social Ads).
  • Digital PR.
  • Digital Ads (Google/Bing).

Perhaps there was also an element of mailing/print. Webinars or video could have been part of the mix. They all have a cost. It is important to quantify the cost of each element in your inbound marketing toolbox.

Where necessary you need to split out the inbound element. If you were not doing inbound you would still have a (brochure) website and that would need some maintenance and probably some basic SEO. Sales would still have demands for some content. Remove these costs should from the inbound marketing ROI calculation.

How To Calculate Inbound Marketing ROI

The basic ROI calculation is (Return – Investment) / Investment over a specific period. The return could be sales, gross profit or some other variable.

For most businesses, the desired outcome (return) is a sale. Therefore marketing ROI could be measured using the formula (Sales – Marketing investment) / Marketing investment over a period.

However, some of the sales growth may be organic. That is, it would have come in regardless of marketing effort. Repeat business for example.

A more accurate calculation then is (Sales – Organic sales – Marketing investment) / Marketing investment over a period. At a top-level, this will deliver a number that should show, in broad terms, if marketing is delivering (or not). The problem is digging down from that top-level into the specifics of which marketing process had the most impact.

Remove marketing activities not related to inbound (and the sales associated with them). At this stage, the problems associated with measuring inbound marketing ROI start to become clear. The best that can be achieved is a broad assessment of return on inbound marketing activity.

Marketers often fall back to the lead generation level. Given the mass of available inbound marketing tools, plenty of data is usually available to equate marketing costs to leads. Although this data is useful it is not a measure of inbound marketing success (or not). There is so much more after the lead. A sales lead is only a very small step on a long road.

Most B2B businesses invest more in generating sales than marketing alone. Any sales process requires support from various business departments including technical, production, quality, management and marketing.

Identifying what costs to include and those to exclude is one of the major challenges associated with calculating inbound marketing ROI. However, measuring at the tactical level of clicks and visits gives no real indication of real (sales) returns. You should make some attempt to identify return on investment on the inbound marketing process, even if it is only a rough estimate.