Inbound Marketing Blogfor Manufacturers and Healthcare Companies
How to Measure Inbound Marketing ROI
“We’re spending good money on B2B inbound marketing. What’s the return on our investment?”
Your boss wants to see figures. Simply saying, “Umm … website traffic is up?” won’t cut it.
You’ve turned your website into a lead generator with high-quality, informative content, like blog posts, videos, e-books, whitepapers, and more. Your sales department uses this content to nurture qualified leads. You’ve established your company as an industry thought leader.
You know all of this contributes to an increase in sales.
Yet, your boss says, “Great. But can you put that in dollars and cents?”
Getting your boss specifics on inbound marketing ROI may be tricky, but it’s not impossible.
Can You Measure Inbound Marketing ROI?
At the surface level, showing your client’s B2B digital marketing ROI isn’t too difficult.
Let’s say you’re running a paid advertising campaign on Google. By taking the amount invested in the platform and dividing that by the customers you gained or retained, you can show the value of your leads.
It gets a little dicier when you want to measure ROI on digital marketing. Since inbound marketing is a marathon and not a sprint, it takes time to start seeing success. Growing an organic (non-paid) presence in Google search results often takes several months to a year-plus, unless your website already has had prior success.
And, inbound marketing involves
several strategies combined, which means you have to track a lot of metrics. Let’s say you produced an e-book that visitors can download (one small part of a much larger strategy).
- How many people clicked, liked, or commented on the social media posts promoting the e-book?
- How many people clicked the calls-to-action promoting the e-book on your website?
- How many people filled out the e-book’s download form and became a lead?
- How many were marketing-qualified leads or sales-qualified leads?
- How many people engaged with the follow-up emails you sent?
- How many became customers?
We recently talked with a client who had a spike in previously unknown leads who were directly emailing their “firstname.lastname@example.org” email address looking to have a sales conversation. These are leads who likely came across a resource but never “converted” (filled out a form and became a lead). While these leads can be considered a marketing success, no one knew they were out there.
Since the lead had no prior conversions on our client’s website, it’s hard to put a dollar amount on the marketing that got them to that point, which makes calculating specific online marketing ROI somewhat difficult.
Overall, any type of success in terms of the number of sales conversations or form submissions can be a part of the formula for calculating ROI for inbound marketing.
When calculating ROI, some inbound marketing metrics to track include:
- New leads
- Marketing-qualified leads (MQLs)
- Sales-qualified leads (SQLs)
- Customer acquisition cost (CAC)
- Marketing as a percentage of CAC
- Ratio of customer lifetime value to CAC
Marketing Tools to Capture and Report the Right Data
These tools are necessary if you want to most accurately calculate your ROI. If you don’t have these tools, get them right now!
- Google Analytics
- Google Search Console
- Google Ads (if you’re running paid ads)
- A quality customer relationship management (CRM) tool, such as HubSpot
While all of these tools are vital, none is more important than your CRM. You can't calculate ROI as a marketer if you're completely blind to what's happening at the contact and company level.
It’s difficult for a marketer when a stakeholder wants to know the ROI for their inbound efforts, but nobody's actually using the CRM to tally …
- How many people became customers
- How many prospects are in a deal phase
- What the projected revenue of each deal is
Your CRM doesn’t have to be expensive. There are several free CRMs out there. However, we recommend getting a closed-loop marketing platform. Closed-loop reporting saves your marketing team time and allows you to easily calculate your performance on each promotional channel.
Can You Calculate ROI for MQLs & SQLs?
The short answer -- yes.
But it’s complicated.
Marketing-qualified leads and sales-qualified leads have value, but they haven’t paid you money.
First, be sure you have a solid understanding of what MQLs and SQLs are for your business. It’s hard to calculate ROI without consistent, teamwide alignment on what defines each.
You then need to know the estimated:
- Length of your sales cycle
- Percentage of MQLs to SQLs
- Percentage of SQLs to customers
You also want to take into account the average deal size based on the type of customer. You can work backward from there.
For example, it takes about a year to turn an MQL into an SQL in aerospace manufacturing. Then there's about a 50% chance of closing the deal, and the average deal size is $3 million. Knowing that you can work backward using the data in your CRM and build an estimate of ROI.
You should be able to know exactly how long it takes to go through each life cycle stage and build from that. This assumes you've been doing marketing tactics and had a CRM for at least a couple of years.
If you don't have all of that, then it’s a little bit more of a guesstimation. It ultimately comes down to knowing what percentage of total deals end up closing and then applying that backward, all the way down to the MQL stage.
Other ROI aspects that are difficult to quantify include:
- That very qualified lead that calls out of the blue
- Brand awareness efforts
- Being an industry thought leader through content production
Calculating ROI on Print Ads Is Important
Print is still a viable advertising avenue for some B2B. However, don’t just run a print ad and hope for the best. Track its value.
One way to track ROI is by using a QR code on the ad. Make sure your QR code has a UTM code so you can track how many people it’s bringing in.
Other ROI That’s Tough to Calculate
Inbound marketing strategies produce evergreen content that can be repurposed in several ways. While it may be difficult to put an exact value on your blog or video library, these things do affect your bottom line when it comes to:
- Customer lifetime value: It’s one thing to calculate the value of a new customer. But what happens when they keep coming back or are referring others to you?
- Hiring employees: Your marketing impacts employment. It’s no secret that manufacturing has a labor shortage. If you’re looking for young engineers to work for you, you’re more likely to get them with an updated website that includes great blog posts and videos that outline what your company does. You’ll most likely beat out that company that hasn’t touched its website since 1996 and reeks of “outdated mindset.”
- Sales efficiency: Reusing your marketing assets in sales conversations means your salespeople don’t have to rewrite or hunt down information that helps them solve a customer’s problems.
- Learning management systems: When you engage your own employees with your content, you build a group of industry experts. These experts become better marketers and salespeople, driving more customers your way.
Measuring Inbound ROI Is Difficult, but Not Impossible
Calculating ROI down to the dollar is difficult, yet still feasible. Sure, there are a lot of intangibles that you can't calculate, but you can make educated estimates.
When investing in digital marketing, you need to clearly identify what ROI means to your stakeholders and who's responsible for each aspect of it. And track everything in a CRM!
Are You Ready for Your Inbound Marketing Campaign?
We have a checklist to make sure all of your bases are covered. Don’t fly blind with your campaign. Optimize it to get the biggest ROI.
Looking For a Deeper Dive?
For a deeper dive into the topic, watch the video version of this article above. Josh Curcio, COO and partner at protocol 80 (and self-proclaimed HubSpot expert), and Holly McCully, inbound marketing consultant at p80 (and niche inbound strategy expert), talk about what you should consider when measuring inbound marketing ROI.
Our Blogs, Direct to Your Inbox!
How to Audit your Online Marketing
If you are executing digital marketing, congratulations! You are most likely already one step ahead of your competition, and making strides to meaningfully connect with prospects online. But, how do you know if you’re seeing continual success year over year, and improving your metrics?
Without the tools in place to analyze and benchmark your efforts, it is impossible to scale your online marketing and ensure continuous success.