Companies Relying on Online Lead Generation Are 2X More Profitable [Data]

by Melissa Miller

Date

November 17, 2011 at 4:30 PM

Most marketers these days recognize that inbound marketing is a critical component of lead generation. But did you also know it's also a proven strategy for a company's profitability?

A recent study released by the Hinge Research Institute revealed a remarkable correlation between profitability and online lead generation among professional services firms. The study concluded:

"Firms generating 60% or more of their leads online are 2X more profitable than those generating less than 20% of their leads online."

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Source: Hinge Research Institute

Why Online Lead Gen Is More Profitable

The data comes from surveying 500 professional services firms, where the average number of employees was 319 and average annual revenue was $54 million.

These results are consistent with HubSpot's 2011 State of Inbound Marketing report, which found that inbound marketing is far more cost effective than traditional, outbound methods. Businesses who predominantly leveraged inbound methods observed a 62% lower cost per lead than outbound companies. This data is in line with the Hinge study, as you would expect businesses that spend significantly less on lead generation to be more profitable.

The study also asked participants to rate 15 techniques according to how effective they were for helping them achieve their goals.

The top 3 techniques were:

  1. Whitepapers and Ebooks
  2. Business Blogging
  3. Search Engine Optimization

On the other end of the spectrum, the 3 least effective techniques were:

  1. Banner Ads
  2. Pay-per-Click (PPC)
  3. YouTube

It's not entirely surprising that banner ads and PPC are the least effective techniques. Although ads might generate immediate results, you need to keep spending money in order to continue generating leads from PPC. Aside from the ongoing expenses, the quality of these leads tends to be lower than those from organic channels.

Marketing Takeaway: Content Creation Is a More Scalable and More Profitable Investment

The key takeaway from this data is, if you're trying to figure out where to put your time and money in marketing, the smartest thing to do is to invest it. When you create an ebook or a blog article, you are creating an asset that will live on for many months -- even years! Because of the power of search and other inbound tactics, your content will continue to generate traffic and leads for your business without any additional expense. In the long run, this strategy not only makes sense, but it's more scalable and also proven to be more profitable. 

Which online marketing techniques do you find are most profitable for your business?

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