So you’re using an inbound marketing strategy? Are you using them as efficiently as you can? How can you be sure?
Okay, so that’s a little blunt. But it does bring home a key point. Inbound marketing is not a fad. Done right, it works wonders. But the real area where it shines is in the level of granular detail makes available. In fact, that’s one of its appealing features. With a few well-chosen key performance indicators (KPIs), it’s relatively easy for marketers to identify campaigns that are worth their time – and which ones need more attention.
So which KPIs do you want to track? Here are some of the basics!
How much sales revenue comes from your inbound marketing activities?
It’s a simple question, but one with far-reaching consequences. For a start, it forces you to define which marketing activities count as “inbound”. And which ones match follow the more traditional “outbound” model. As a basic rule, activities that compel the audience to buy directly are “outbound”. On the other hand, inbound marketing encourages the audience to discover their own needs. Then, when informed of their needs, they come to you for more information – or a purchase.
This is simple to record using the right mix of marketing tools. Dedicated campaign landing pages make it easy to capture sales that come from inbound marketing. Want to refine this further by channel or campaign? An analytics program can track tags embedded in the links you provide as part of your campaigns. And make sure to record your customers’ acquisition channel in your customer relationship management (CRM) system.
How much do your inbound marketing campaigns cost compared to the number of customers they gain?
While it can be very cost-effective, inbound marketing does come at a price. There are personnel costs for the written and visual content. Employee hours that go into putting it out into the world. Then there are the costs for the technologies needed to track its progress. Plus any overhead rates you find relevant to these activities.
Once you have your costs per campaign, you can divide the total by the number of customers they deliver. This lets you decide which marketing activities need more investment, which require fine tuning, and which ones you can cut.
How much revenue do your inbound marketing customers give you in the long term?
As mentioned earlier, inbound marketing helps customers make the purchase decision without excessive prompting. With a little thought, it’s easy to see how such a non-invasive approach might help generate income over time. For example, a customer might continue their relationship with your brand because they feel personally invested in their purchase decision. It makes them feel smarter. And they continue buying a product or service because it validates their experience.
Of course, the more they spend, the better. To get a solid idea of just how much your inbound marketing customers spend, it’s important to track their interactions with your brand. If they follow a one-and-done pattern, you might have an opportunity to encourage brand loyalty. You could investigate the possibilities available via an internal lead-nurture campaign. On the other hand, if they show repeat purchasing behaviour, you have different options. You can find new opportunities to up sell, or implement a referral program.
For every dollar you spend on inbound marketing, how much are you getting back?
Marketing campaigns live and die based on their return on investment. For every dollar you put in, how much are you getting back? With the information from the previous KPIs, you can calculate the answer. Just add up the lifetime revenue per customer, and divide by expenses.
When you have this information, you can measure the effectiveness of each campaign. And because the results are transparent, there’s no question about how your inbound marketing practices are performing. Just line up your KPIs and you’re good to go!