When was the last time you made a purchase after seeing a billboard ad? Or reading a direct mail piece from your mailbox? Chances are, you likely drove past the billboard without paying attention and promptly recycled the mail.
The Internet revolution has changed everything about the way people observe and consume the information around them. With “Google It” as the automatic response for everything from solving a dinner party debate to self-diagnosing an illness, people are more empowered than ever to get the information they want, exactly when they want it.
Consumers are incredibly informed, armed with peer testimonials, articles, and public reviews. Outbound marketing just isn’t cutting it anymore. Inbound marketing has taken its place, and for good reason. Here are just a few examples of why inbound strategies are better for business, providing substantial, measurable ROI for marketers.
First, let’s define the key differences between outbound and inbound marketing.
This holistic marketing strategy is designed to earn (not buy) the customer’s attention. Rather than broadcasting your message aloud to the public, inbound marketing is all about slowly and steadily bringing people to you through quality content. Some of the most effective inbound tactics include:
By providing value-added content that remains accessible for a long period, brands can earn people’s attention and, ultimately, their loyalty. Better yet, because this opt-in environment often takes place on digital platforms where user interactions can be tracked and measured, the ROI of inbound marketing is much easier to calculate than outbound.
On the other hand, outbound centers on buying advertising space on TV, radio, direct mail, newspapers, billboards, banner ads, and event sponsorships to reach large groups of people who may find the content appealing. This approach typically catches the customer off guard because the ads intrusively present themselves when the consumer is doing something else.
Due to the inability to accurately track how many people saw the content, the ROI of this approach is difficult to measure. Without straightforward data, marketers are typically forced to make assumptions about the impact the advertising has on consumer purchasing decisions.
Inbound marketing can be a game-changer for your business, but how do you know if it’s worth the investment?
First things first, let’s define ROI. ROI stands for return on investment and is a metric used to calculate the profitability of an investment relative to its cost. In the case of inbound marketing, ROI measures the effectiveness of your efforts in generating leads, converting customers, and ultimately driving revenue.
To calculate the ROI of inbound marketing, you’ll need to crunch some numbers. Here’s a simple step-by-step process to get you started:
Here’s the formula: ROI = ((Revenue – Cost) / Cost) x 100.
If your ROI is positive, that’s a good sign! Your inbound marketing efforts are profitable. If it’s negative, take the opportunity to analyze what’s not working and make adjustments accordingly.
Remember, calculating the ROI of inbound marketing isn’t a one-time thing. It’s an ongoing process that requires continuous monitoring and adaptation. Approach inbound marketing as a marathon, not a sprint. Be patient and stay focused on providing value to your audience.