The team at KW Digital are experts at talking about the cost of Inbound Marketing to our clients. We look at the estimated sales value, the objectives, the market opportunities, the competitive opportunities and most importantly a realistic ROI figure.
Too many agencies hide behind the fact that ROI is difficult to calculate in the world of Digital and Inbound marketing. We disagree. With the right tools and metrics in place, ROI can be calculated effortlessly, month-on-month.
One thing we don’t spend as much time talking about is the cost of not investing in Inbound Marketing. Many clients want to know the ROI figure before they invest in their Inbound Marketing. Luckily for us, we have a real life case study in the form of our content marketing platform PIF. We even let clients test us out by offering them free content placement on PIF, so they can see the results we deliver before they commit to an Inbound Marketing package.
The cost of not doing Inbound Marketing effectively
There is a very real cost in failing to invest in inbound marketing or delaying action indefinitely. We have identified the major opportunity costs below:
- Competitive opportunity costs
- Potential sales value per customer
- Improving brand awareness
- Top-line revenue
Yes, there’s a very real cost of failing to invest in inbound or delaying action indefinitely. This has to do with brand visibility, competition, sales efficiency and top line revenue. Let’s take them one at a time.
Competitive opportunity costs.
What happens when your competitors beat you to the inbound marketing punch? There are lots of potential impacts including:
- They are first to market with competitive products.
- They grab market share early and increase it over time.
- They gain reputation as the industry leader.
- They consistently win in head-to-head competitions, bids and customer.
In the online world, barriers to entry such as high stocking levels, impressive buildings and large-scale plants are less important. The competitive scope has widened! It has become far easier for competitors to get ahead in the online world, and then move into the offline world once they have gained their reputation.
Potential sales value per customer
By using inbound marketing methodology and technology, companies are consistently reducing customer acquisition costs and increasing customer lifetime value. Inbound marketing works by identifying and reaching out to qualified buyers with content they want. This means the sales team get more qualified leads and spends less time prospecting with methods that rarely work, like cold-calling, or expensive means like tradeshows. By targeting very specific keywords (aka ‘long-tail’ keywords) in your in-bound marketing, you can ensure you attract customers with a real need for your product, that is much more likely to convert into a sale, with less legwork.
With the right marketing technology solutions and an aligned sales and marketing team, sales reps spend far more of their time talking with qualified buyers and finding ways to help them.
Improving Brand Awareness and Brand Value
Think about how you would improve brand visibility in the offline world? I can name a few:
- Advertise in printed media
- Exhibit at trade shows & events
- High-quality company literature
- External sales team
These are all very expensive, less effective ways of improving brand awareness – furthermore, they all fall in the ‘difficult to measure’ category when looking at ROI.
Online methods of improving Brand Awareness:
A highly optimised, informative and intuitive website that it is easy to navigate and has well-placed call-to-actions.
If you don’t have this, then:
- Potential buyers leave because they can’t find what they want
- They bounce because they don’t understand your value proposition
- They give you no more than a quick glance because your site is slow to load or is unreadable on smartphones
- You never know they visited your site because you have no attractive call to actions.
Fresh content which is placed on your website and distributed online to inform, inspire and educate your customer-base.
If you don’t have this, then:
- Low visibility on search engines, usually one of the best channels for lead generation
- Little to no traffic or leads from social media
- Lack of thought leadership in professional forums and industry websites
- Potential buyers will regard your brand as old fashioned and out-of-touch then go elsewhere
Essentially if you don’t do these things, you have no way of getting in front of your buyers and competing with your competitors who are in front of your buyers.
You reduce your sales revenue and increase your financial stress!
The largest cost of not doing inbound marketing is turnover. If your brand isn’t visible, you can’t get qualified leads except by traditional methods, such as cold-calling, or by referrals. How well are those working for you?
If your website doesn’t convert online visits into leads and you can’t track your leads through the sales funnel, how will you get new customers?
If your sales team are not aligned with marketing and using sales and marketing technology, how will you win in competitive situations with lead intelligence and insights that convince and convert customers?
All of the Inbound marketing aspects discussed above impact on top-line turnover. If turnover drops on your watch, what do you have up your sleeve to turn things round quickly? If you are storming ahead in the Digital World, the risk is spread across too many channels for it to get painful. There really is a significant cost by not engaging in effective inbound marketing.