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Inbound Marketing ROI Unlocks Budget

The 2014 State of Inbound  study from Hubspot illustrates that companies demonstrating positive ROI’s from inbound marketing efforts tend to increase marketing budgets or keep them at the same level.
A survey of over 3,500 marketing and sales professionals showed that 74% of marketers’ companies reported the same or increased budget this year. Only 26% reported seeing sales and marketing budget trimmed.

The 27% “unchanged” segment is not reflected in the chart below.

inbound-marketing-roi-by-company-type

According to the research, no single factor has a greater impact on increased budgets than previous success with inbound marketing. Over 50% of those surveyed stated past success as the number one factor influencing a positive change in budget. That’s the reason why 3 out of 4 marketing budgets increase.

factors-affecting-inbound-budget

It is clear that there is a direct correlation between a positive ROI and increased marketing budgets. The challenge then for marketers is measuring the success of their inbound campaigns. Marketers who measure their success are 17 times more likely to see the same or greater ROI over the previous year than other marketers.

inbound-roi-impact

Surprisingly, only 53% of marketers surveyed said that they measured ROI in 2014, a small increase of 3% from 2013. As Peter Drucker famously quipped, “If you can’t measure it, you can’t improve it.” Therefore, in order to optimize your efforts and realize higher ROI, measuring inbound activity is essential.

inbound-roi-measurement

How To Track Your Inbound ROI
The first step to understanding your inbound marketing ROI is to understand what your sales funnel looks like. A typical client inbound marketing funnel has the following four categories:

  • Awareness
  • Engagement (often called demand generation)
  • Lead Generation
  • Sales

For the first three areas (awareness, engagement, and lead generation), use your analytics data to determine what your average conversion rate is for each category then compare it to the tangible fourth category—sales.

As you go through this process, working backward in some cases, you’ll discover a dollar expenditure that applies to each bucket into which you can split your inbound marketing efforts.

After that, demonstrating ROI is as simple as comparing those numbers to the amount of sales those efforts generated. If the number is positive, then the budget should be increased.

 Contact us today and let us work with you to measure the ROI of your inbound marketing efforts.