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Minimum Activity Levels for Inbound Marketing ROI

By John McTigueAug 15, 2011

One of the most common questions we hear from clients and other inbound marketing agencies is "how much effort do we need to generate positive return on investment from inbound marketing?" Clients want to know how much to budget and when to expect to achieve their business goals. Agencies want to know how much to charge their clients and what resources are required to get the job done.

Based on the excellent research by Dan Zarrella at HubSpot and our own client results, I can give you some broad guidelines on levels of effort and budgets upon which you can base your planning. ROI, of course, depends on your products and market. Selling a $10 widget to a global marketplace is very different from selling a $100K product or service to a narrowly defined region or demographic. The markets themselves will also differ in the levels of effort and kinds of inbound marketing tactics needed to move the needle. With that disclaimer out of the way, let's dive in. First, let's define the moving parts of the inbound marketing machine.

minimum effort for inbound marketing success

Strategy, Team and Communication

Do you have a team or a single player involved? Are they dedicated to inbound marketing or part-time? Are they insourced or outsourced? Are they experienced, or do they need training. How often do they meet? What reporting is required? We will measure this in hours per month.

Blogging

Who's blogging for you and how often do they post? What subjects are covered and who has approval authority? Do you allow guest posts and do you seek guest posting elsewhere? We will measure this in blog posts per month.

Premium Content

Do you create advanced content such as e-books, white papers, podcasts, videos and webinars? Who does this and how often? We will measure this in content pieces for quarter.

Social Media

Who is involved and how often do they post updates in the major social networks? What do they post about and is there an approval process required? Who monitors social media channels and responds as needed? Do you run social media campaigns, how often and what about? Who is responsible for creating, executing and analyzing them? We will measure this in updates per day.

Lead Generation

How do you capture leads from your blogs, social media and premium content? Who creates calls-to-action and landing pages? Do you perform A/B testing or more sophisticated conversion rate optimization tests? Who analyzes lead generation data and works with the rest of the inbound marketing team to maximize results? We will measure this in hours per month.

Inside Sales

Once leads are captured, who responds and how? Do you have an inside sales team that responds immediately or a single sales person who responds only to "hot" leads? We will measure this in hours per month.

NOTE: I haven't included outbound marketing, which can also help significantly in boosting online lead generation. You should probably allocate an additional 10-15% of your budget for e-mail marketing, press releases, trade shows, print advertising and/or media advertising. The mix of these activities will vary by product, market and timing, for example new product rollouts vs. sustained sales.

NOTE 2: I hear a lot of you screaming about SEO. I'm assuming you're putting together a sensible SEO strategy as part of your Team activities and that you're optimizing all of your content accordingly. If you want to spend a ton of cash on PPC and link-building campaigns, knock yourself out. All I have to say is "wake up and smell the Caffeine! Or is it Panda?" Yuck...

Now, let's define three levels of expectations, or "reality checks" that we can use to gauge success based on effort.

  1. Maintain - Over a period of 6-12 months from start of operations, you can expect to increase your website traffic and leads steadily over time. Very few, if any, new customers from inbound marketing.
  2. Growth - Over a period of 6-12 months from start of operations you can expect 300-600% growth in traffic and leads. 2-3% visitor-to-lead conversion rates, 5-20% lead-to-customer conversion rates. You can expect positive ROI towards the end of this period, depending on your product and market.
  3. Explosive - Over a period of 3-6 months you can expect dramatic increases in traffic and leads, in excess of 800-1000%. Visitor-to-lead conversion rates in excess of 5%. Lead-to-customer conversion rates in excess of 30-40%. You can expect positive ROI within this period, depending on your product and market.

Minimum Activity Levels for Inbound Marketing

 
Activity Maintain Growth Explosive
Strategy, Team &
Communications
1 hour/mo 4 hours/mo 8 hours/mo
Blogging 2-4 per month 12-20 per month 60+ per month
Premium Content 2 per year 1-3 per quarter 6-12 per quarter
Social Media 2-4 per day 10-20 per day 100+ per day
Lead Generation 4 hours/mo 12-16 hours/mo 20+ hours/mo
Inside Sales 4-8 hours/mo 16-20 hours/mo 40+ hours/mo
Monthly Budget (@ $100/hr) $2,000-$3,000 $5,000 - $7,000 $12,000+

Summary

Now, before you starting nit-picking my schedule, please remember that these numbers are approximate, and budgets will vary depending on how you choose to perform inbound marketing. In some cases, you already have personnel in place to perform all of these activities, and they are dedicated to inbound marketing. In far more cases, you either don't have the experienced personnel or you don't have sufficient time allocated to meet these guidelines. This is where inbound marketing agencies may be a more cost-effective alternative.

In either case, you should work with your marketing team (inside or outsourced) to come up with a realistic set of business objectives and a plan to meet them. If you underestimate the time and resources required to achieve these results, you will almost certainly be disappointed. What's the alternative? Well, you can ignore inbound marketing and go back to what you were doing before - but how well has that worked out for you? If you want to make this work, commit the necessary time, people and effort to the process. Track your success over time and calculate your ROI metrics. This is the new recipe for marketing success.

Photo credit: M-Haftek7-Steps-Improve-Your-HubSpot-ROI

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The Author

John McTigue

With over 30 years of business and marketing experience, John loves to blog about ideas and trends that challenge inbound marketers and sales and marketing executives. John has a unique way of blending truth with sarcasm and passion with wit. You can connect with John via LinkedIn, Twitter and Google Plus.
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