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Amol Ghemud Published: August 14, 2018
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Inbound marketing is all about providing valuable content and allowing sales leads to come to your website on their own terms. When you integrate inbound marketing into your marketing plan, you focus on sharing content that your target audience is already interested in, and your company becomes part of that conversation. Social media is a huge part of inbound marketing; it’s used to create a dialogue between your company and its customers and sales leads.
The most important thing about inbound marketing is that it converts leads to sales much more effectively than outbound marketing. Gone are the days when companies can purchase people’s attention with print ads and direct mail campaigns. Instead, companies are using inbound marketing to increase their ROI and are doing it in more cost-effective ways, too. It’s a brave new world out there, and we want to make sure that you’re getting as much out of it as you put into it.
Getting ROI is the Ultimate Goal
SME’s that effectively use inbound marketing build trust with their audience and establish themselves as a thought leader in their industry. They usually engage potential customers, lead the conversation, influence their buying decisions and build relationships that last.
There are many variables that aren’t measurable or quantifiable, so trying to identify a precise number that conveys the value of your inbound marketing activities may cause you to ignore the more intangible values such as trust, influence and relationship with customers. The effective ways to improve ROI can be variable with no two ways or strategies a uniform measure.
What is ROI?
ROI is an acronym that stands for “return on investment,” and most marketers will tell you it’s one of the most important metric you need to know so as to determine campaign’s effectiveness. If ROI is positive, the company is doing something right – and must keep working on the same lines to improve it. If ROI is negative, know that something isn’t working and it needs to change.
The main objective of any marketing initiative, strategy or tactic is to help business generate revenue. Measuring the ROI of the marketing tactics you deploy will help you make sound decisions on where your organization invests its marketing budget and continuously optimize the results your marketing resources produce and improve sales. But sometimes your ROI can manifest itself in multiple ways.
Sure it’s always important to measure the number of deals and total revenue that marketing helped produce, but it’s equally beneficial to understand all of the positive outcomes your marketing generates. Inbound marketing in particular has the potential to produce ROI in a variety of ways.
Why small businesses struggle to hit the ROI
Technology has leveled the playing field for startups and small businesses. Competing with big business marketing budgets has traditionally relegated fledgling and local businesses to eternally small market shares. Today, however, with digital tools and marketing automation, even a one-man band can put itself in front of thousands of potential customers – every day – and manage a contact list ten thousand strong.
With a modest budget, it is possible to implement a successful content marketing strategy and experience business growth.
So are the small business marketing teams standing up against their potential? In reality, small businesses aren’t, as a whole, able to achieve groundbreaking ROI numbers. Nor are they proficient in leveraging the digital assets that are at their fingertips. A recent study published by Drip, the 2017 Small Business Conversion Marketing Report, has uncovered a very telling trend.
Small business marketers miss the bigger picture. They do not develop long-term, all round, holistic strategies, and are missing out because of this oversight. When marketers cannot get results they’re looking for, is it because a specific tactic doesn’t work, or because the supporting tactics aren’t in place to allow it to work?
What small businesses are doing is focusing on one or two aspects of a complete strategy.
Running powerful social media campaigns – but having weak landing pages, if any at all, to capture leads.
Building an enviable email contact list, without the regular customer delights and a strong social media presence to keep those leads engaged.
Developing a strong lead generation strategy with a consistent, value-driven blog and viral video campaign. Watching site traffic grow, and wondering where all the sales are because there’s a barely-there lead nurturing strategy in place and no plan for retaining existing customers.
And those who are taking a few steps further down their road of successful digital marketing, are doubling the results of those who aren’t. Just by using a landing page for your SME or launching a quality blog, or even diversifying their strategy with digital advertising, they are getting more leads and more sales.
Small business owners are failing to go the further distance. SME are usually crunched in their time management. They are not aware of the productivity benefits of marketing automation software. Have strained resources, and end up putting time and money into one-sided digital assets that aren’t bringing in a great ROI.
What would happen if they took a few more steps, or better yet, a step outside of their actions to get a clearer picture of their overall strategy? Then the solutions – utilizing better software, measuring more of their marketing, adopting a better content plan, finding ways to improve upon the digital assets they are using – would be much easier to see.
How to measure Inbound Marketing ROI
This depends on your goals. But for most SMEs, page views, email subscribers, user registrations and sales will be among their top priorities. Here are several KPIs that you should be tracking:
New leads. How many leads are you attracting every month?
Marketing qualified leads. These leads are likely to become future customers based on criteria such as company size, content consumption and so one. These are leads you’ll want to specifically target with your marketing.
Sales qualified leads. These leads are interested in talking to someone from your sales department. Sales and marketing teams should agree on a specific target number to meet on a monthly basis.
Opportunities. This is the number of leads that engage with the sales team and move down the sales funnel. There is a good chance they will become new customers.
Customer acquisition cost (CAC). Your cost of customer acquisition can be calculated by adding up your advertising and marketing overhead and dividing it by the number of customers for a set period of time.
Marketing as a percentage of CAC. This number varies depending on the industry and the type of company you’re a part of. Your goal should be to have a benchmark you can measure against.
Ratio of customer lifetime value (CLV) to CAC. If, for example, your CAC is $100,000 and the lifetime value of the customer is $600,000, your CLV to CAC ratio would be 6:1. At first glance, a higher ratio is better, but this isn’t always the case—it usually means you can increase your growth by spending more on marketing.
You can continue to use outbound marketing and waste the marketing budget. The obsolete tactics usually will not transform the company but the inbound marketing tactics will. As opposed to outbound being costly and ineffective, inbound marketing is cost-effective and reliable. Inbound Marketing improves bottom line of SME by improving the overall ROI of the SME. Need more convincing? Let’s compare the return on investment for both forms of marketing.
The Average Costs of Traditional Marketing
Knowing what things cost can help you make the right decision. You’ll see that inbound marketing is significantly less expensive than outbound.
Radio: Rotating spots on a radio channel for a specific duration typically costs between $500 and $1,000.
Newspaper: A newspaper ad will cost you approximately $250 while a bigger display ad will cost you closer to $2,500.
Television: TV is one of the costliest traditional advertising channels and it has been like this for decades. And you can expect to dish out more than 200 thousand dollars for a prime-time national spot. Even just a 20-second promotion in your local market will cost you hundreds of dollars.
Magazines: Want a full-page ad in a national magazine? You’ll probably need to pay over 100 thousand. Even smaller ads will cost you thousands per month. The reader base for traditional magazines is declining rapidly.
Yellow Pages: For a simple half-page ad, you’ll need to cough up $1,000 per month.
Trade shows: Trade shows with cost you thousands of dollars for just a couple days at a booth. The average cost per lead for these types of campaigns is $346.
ROI of Outbound
So you’re spending out hundreds of thousands of dollars on outbound tactics like the ones described in the above section with a hope that money will create a great return on investment. But guess what? It won’t because people aren’t looking, listening, or reading these types of ads. They’re tuning them out and ignoring them in an era where they’re bombarded with hundreds or even thousands of similar messages every single day.
Plus, since it is difficult to calculate the effectiveness of these types of marketing tactics. There’s no way to actually figure out the ROI earned by your SME. Inbound marketing offers better ways to improve bottom line of your SME.
The Average Costs of Inbound Marketing
Now let’s look at how much it’ll cost you to pay to create an inbound marketing strategy that attracts leads. Website: A small business website will cost you approximately $2,000, but could cost upwards of $12,000 depending on the project’s complexity.
SEO: The average search engine optimization campaign will cost about $500 to $4,000 per month depending on the agency you use. You can do it for free on your own, too.
PPC: Pay-per-click advertising will cost $500 to $2,000 per month if you choose to use it, but you don’t have to.
Social Media Marketing: You can post on social media on your own for free or have a marketing expert do it for you for around $1,000 a month.
You can also get a package from a digital marketing agency for all of the above, which will cost approximately $3,000-$9,000 a month. The more you budget for online digital marketing, the better your ROI and the better your bottom line. The lead generation channels and techniques can be spread over a variety of inbound strategies so as to reap the benefits and cater to a wider audience.
ROI of Inbound
Much of the inbound marketing tactics you should deploy can be done by the experts or you can outsource them to professional consultants and digital marketing agencies. And in contrast with outbound, every aspect of inbound marketing can be tracked, measured, and analyzed. You can know exactly how many visitors you visited your website, how many conversions you’ve received, and even how long leads have looked at your web pages.
For SMEs, the business’s bottom line depends on the lead generation channels activated and the ROI generated. Inbound Marketing improves bottom line of SME.
As inbound marketing is in sync with modern consumer behaviour, it attracts leads instead of interrupting them. And is very target oriented, its effectiveness is incredibly higher than that of outbound. In fact, your cost per lead will be approximately 62% lower with inbound, at $135.
Measurability
Better tracking and measurement of your marketing efforts, will improve to make them effective and efficient. Outbound marketing makes this virtually impossible to do as traditional outlets are one-way. Once the message reaches the wider audience then you have absolutely. No way to understand how the message affects the consumers’ behaviours or whether or not it moved them to make a purchase.
Want to use inbound marketing to boost your marketing efforts? Inbound, on the other hand, is performed online usually by a team of experts. It can track almost everything online and measure with the use of right metrics and tools. The business owner will be able to see exact results for any given campaign, channel, or tactic and also to refine and realign the strategy. And being able to do this results in a higher ROI.
For Curious Minds
Inbound marketing builds trust by providing valuable content that addresses your audience's needs, positioning your company as a helpful resource rather than an interruption. Unlike outbound methods that purchase attention through ads, this approach creates genuine dialogue and fosters lasting relationships, which more effectively converts leads into sales. Your business becomes a thought leader by consistently offering solutions and guidance. This strategic shift is critical because modern customers are adept at ignoring disruptive advertising; they seek out information on their own terms. By becoming part of their conversation, you can:
Establish authority and credibility in your industry.
Build relationships that influence future buying decisions.
Generate a positive ROI in more cost-effective ways than direct mail or print ads.
By focusing on attracting interested prospects, you create a sustainable pipeline of high-quality leads that see your brand as a trusted partner. Learn how to integrate this philosophy into your marketing plan by reading our full guide.
A small business must define ROI beyond simple revenue to capture the full impact of its marketing, especially with inbound strategies. This means accounting for intangible assets like brand trust, industry influence, and customer relationships, which are foundational for long-term growth even if they are not easily quantifiable. A narrow focus on immediate sales ignores the positive outcomes that build a resilient business. A broader perspective is essential because inbound marketing's value compounds over time. For example, the **2017 Small Business Conversion Marketing Report** highlights how disconnected tactics fail, partly because they ignore these relationship-building aspects. A complete view of ROI should include:
Growth in brand authority and recognition.
Increased customer loyalty and repeat business.
The ability to influence conversations and buying decisions within your market.
Measuring these outcomes helps you make smarter budget decisions and understand the true effectiveness of your campaigns. Explore the full article to see how to track these crucial but often overlooked metrics.
An integrated, long-term inbound strategy consistently outperforms a series of isolated digital tactics by creating a cohesive customer journey. While standalone tactics might produce small, temporary wins, an integrated approach builds momentum, where content, social media, and lead nurturing work together to build lasting trust and authority. This creates a more predictable and sustainable path to growth. When deciding your approach, consider these factors:
Sustainability:An integrated strategy builds digital assets that appreciate over time, whereas disconnected tactics require constant new effort for minimal returns.
Efficiency: A unified plan ensures your budget is spent on reinforcing activities, improving overall ROI, unlike the fragmented spending on isolated campaigns.
Customer Relationships: Inbound marketing focuses on building a loyal audience, while separate tactics often treat potential customers as one-time transactions.
The findings in the **Drip** report show that businesses focusing on the bigger picture succeed. For sustainable growth, the choice is clear. Dive deeper into building an integrated plan in our complete analysis.
The **2017 Small Business Conversion Marketing Report** published by **Drip** provides clear evidence that small businesses are not proficient in using their digital assets. The study uncovered a telling trend where marketers focus on individual components, like running a social media account or sending an email, without connecting them into a larger, cohesive system. They fail to build a machine where each part supports the others. This strategic failure directly hinders their ability to achieve significant ROI because their efforts remain fragmented and inefficient. Without an overarching strategy, potential customers receive disjointed messages and the business never establishes itself as a true authority. Key indicators of this issue include:
A lack of long-term content planning.
Failure to integrate social media dialogue with sales funnels.
Inability to nurture leads through a connected marketing automation workflow.
This oversight means even with powerful digital tools, their marketing never gains the momentum needed for substantial growth. Uncover the steps to fix this disconnect in the full article.
Successful SMEs use inbound content to establish thought leadership by consistently providing valuable, expert information that solves their audience's problems. Instead of pushing a sales message, they create helpful blog posts, guides, and social media content that lead the conversation in their industry, which naturally influences buying decisions as trust is built. This approach fosters strong, lasting relationships that far outlive the impact of a temporary ad campaign. For example, a company that regularly publishes insightful case studies or tutorials becomes the go-to resource for potential clients. This positions them as a trusted advisor, not just a vendor. This strategy leads to better outcomes because:
It attracts customers who are already seeking solutions.
It builds an audience that is receptive to future offers.
It creates a dialogue, turning customers into advocates.
Unlike a fleeting print ad, this foundation of trust and authority generates a more sustainable and positive ROI. Read on to see more examples of how this strategy drives business growth.
The **2017 Small Business Conversion Marketing Report** from **Drip** reveals a critical trend: small business marketers often miss the bigger picture by failing to develop long-term, all-encompassing strategies. Instead of building a connected system, they deploy isolated tactics, hoping one will be a magic bullet. This oversight is the primary reason individual tactics fail to deliver. A single blog post or social media campaign, without supporting elements, lacks the power to convert a lead into a sale because there is no mechanism to nurture the relationship or guide the prospect through a decision-making process. The lack of a strategic framework means marketing efforts are disjointed and ineffective. The report's findings suggest that marketers often ask the wrong question, blaming a specific tactic's failure on the tactic itself rather than the absence of a supportive strategy. This leads to a cycle of trying and abandoning tactics without ever addressing the root cause. Learn how to build the strategic foundation your tactics need in our full guide.
For a small business with a modest budget, an effective initial content strategy focuses on providing targeted value to build trust and generate a positive ROI. Instead of trying to do everything at once, you should concentrate your efforts on a few high-impact activities that create a foundation for growth. The key is to connect your content directly to business goals. Here is a practical plan to get started:
Identify Your Target Audience: Define exactly who you are trying to reach and what their primary pain points are.
Create Core Content: Develop a few high-quality content pieces, like detailed guides or blog posts, that address those specific problems and showcase your expertise.
Promote on One or Two Channels: Use social media or an email newsletter to share your content and start a dialogue with your audience.
Measure Key Metrics: Track simple metrics like website traffic from your content and the number of leads generated to gauge your initial ROI.
This focused approach ensures your limited resources are used effectively to build relationships, not just chase clicks. Discover how to expand this initial plan in the full article.
A marketing team can create a complete measurement framework by blending quantitative and qualitative metrics to capture the full spectrum of inbound ROI. While tracking deals and revenue is essential, you must also measure indicators of brand health and influence, as these are leading indicators of future sales. This balanced approach prevents you from abandoning strategies that build long-term value just because they do not produce immediate revenue. To build this framework, you should combine hard data with softer signals of success. Your measurement plan should include:
Quantitative Metrics: Track lead-to-sale conversion rates, cost per acquisition, and total revenue generated from marketing activities.
Qualitative Indicators: Monitor social media engagement, brand mentions, growth in organic search traffic for key terms, and feedback from customers.
Influence Gauges: Note how often your content is shared by industry peers or cited as a resource.
This dual-focus system gives you a more accurate picture of your campaign's effectiveness, as highlighted by the **Drip** report's findings on strategic oversight. Explore how to set up this framework in our detailed guide.
Although digital tools give startups a fighting chance against larger competitors, focusing on short-term tactical gains carries severe long-term risks. Startups that pursue this fragmented approach will likely experience inconsistent growth and struggle to build a loyal customer base, ultimately ceding market share to competitors with more cohesive strategies. They will remain in a constant, expensive cycle of acquiring new customers instead of building lasting, profitable relationships. The primary implication is a failure to build sustainable brand equity. Without an all-encompassing inbound plan, a startup faces several negative outcomes:
Inability to establish itself as a thought leader, remaining a commodity.
Higher customer acquisition costs over time.
A weak brand that is vulnerable to market shifts and new competitors.
The **2017 Small Business Conversion Marketing Report** underscores this danger. To survive and thrive, startups must shift their focus toward building a strategic foundation. Read on to learn how to make this crucial strategic pivot.
As consumers increasingly tune out disruptive advertising, companies must fundamentally shift their marketing budget and strategic focus toward inbound methodologies to stay relevant. The days of purchasing attention with print ads and direct mail are over; the future lies in earning it with valuable content and authentic engagement. This requires a reallocation of funds from outbound interruptions to inbound assets like content creation, social media dialogue, and SEO. The strategic focus must shift from broadcasting messages to building communities and establishing trust. Over the next decade, successful businesses will be those that:
Invest heavily in understanding and serving their audience's needs.
Prioritize creating digital assets that provide long-term value.
Use technology to manage relationships at scale, not just to send mass mailings.
Failing to make this adjustment will lead to diminishing returns and a shrinking market share. Explore the full article to understand how to prepare your budget and strategy for this new era.
Many small business marketing campaigns yield a negative ROI because they operate as a series of disconnected tactics rather than as a unified, long-term strategy. This fragmented approach fails to build the momentum needed to guide a potential customer from awareness to purchase, causing resources to be wasted on efforts that lead nowhere. The **2017 Small Business Conversion Marketing Report** by **Drip** identifies this as the primary strategic error. The report shows that small business marketers miss the bigger picture, focusing so intently on individual actions that they neglect to build the connective tissue between them. This oversight is the root cause of poor performance. Without an overarching plan, a successful social media post or a well-written blog article exists in a vacuum, unable to contribute to the ultimate goal of generating revenue. Correcting this means shifting from tactical execution to strategic orchestration. Discover how to build a cohesive plan in our complete analysis.
When an inbound tactic fails, the most common diagnostic mistake marketers make is to blame the tactic itself rather than examining the surrounding strategy. For instance, if social media engagement is low, they might conclude that the platform is wrong for their business, when the real issue could be a lack of valuable content to share or no clear path for followers to become leads. This narrow focus on the tactic prevents them from seeing and fixing the root cause. A better approach is to diagnose the system, not just the symptom. Instead of abandoning the tactic, you should ask why it is not working as part of a larger plan. Consider the following:
Is the content being shared truly valuable to the target audience?
Is there a supporting mechanism to capture leads from the engagement?
Does the tactic align with the overall goals of the marketing strategy?
This method, supported by findings in reports like the one from **Drip**, helps identify and mend strategic gaps. Read our full guide to learn more about diagnosing your marketing weaknesses.
Amol has helped catalyse business growth with his strategic & data-driven methodologies. With a decade of experience in the field of marketing, he has donned multiple hats, from channel optimization, data analytics and creative brand positioning to growth engineering and sales.
Growth Strategy and Planning
