HubSpot's newly released 2012 State of Inbound Marketing Report reveals fascinating data around marketers' lead generation costs and how various lead sources compare to one another.
The study, which is based on a survey conducted in January 2012 of 972 marketing professionals, found that inbound marketing-dominated organizations experience a 61% lower cost per lead than organizations that predominately leverage outbound marketing. The average cost per lead for outbound-dominated businesses was $346. In comparison, the average cost per lead for businesses leveraging primarily inbound techniques was $135. Take a look at the data in more detail below.
Inbound marketing techniques include SEO, blogging, and social media. The focus of inbound marketing is to get found by relevant prospects who are using the Internet to learn about products and services. Outbound marketing techniques include direct mail, trade shows, and telemarketing. Outbound methods are a more traditional approach to marketing wherein businesses push their messages to prospects, as opposed to attracting prospects to them.
The survey also asked participants to classify each lead generation category as 'Below Average Cost,' 'Near Average Cost,' or 'Above Average Cost'. The results of the survey showed:
- Blogs, social media and organic search maintained the top slots as least expensive.
- Blogs had the highest instance of being reported as 'Below Average Cost.'
- 52% of companies who blog indicated leads from this channel were 'Below Average Cost.'
- Trade shows, direct mail, and telemarketing were most frequently ranked as more expensive.
These findings don’t necessarily mean that every business should entirely eliminate outbound marketing methods. Rather, it’s important to strike the right balance for your own business, and determine which channels actually deliver the highest ROI. In addition, some of your target segments may be more or less receptive to a certain channel. The easiest way to track the performance of each channel is with a closed-loop marketing system, which tracks leads from their initial channel, through their first conversion, until they become a customer.
For an in-depth review of the study's findings, join us for the upcoming 2012 State of Inbound webinar on Thursday, March 1st, 2012.
Inbound Marketing Blog Feed
Sarah from PostcardMania 9:35 AM on February 28, 2012
I think that this is definitely true but it us important to also look at your close percent on each type of lead - for us we can generate cheaper leads this way for sure but the leads that spend the most money with us are those responding to direct mail.
Jon Nugent 9:38 AM on February 28, 2012
You do your customers a disservice when you advocate that inbound marketing is the only tool that will help them reach their goals.
HubSpot spends quite a bit of money on PPC, uses an inside sales force as well as other "outbound" marketing tactics to drive sales.
I think in the interest of full disclosure you need to inform your customer base about all the marketing means HS uses because I would be interested in what drives the most sales for HS. Is it inbound or outbound marketing practices that ultimately close the sale.
Melissa Miller 10:10 AM on February 28, 2012
@Sarah, Thanks for your comment. The report dives into some lead quality metrics. Although we present aggregate data, it's important to note that different businesses will experience a different ROI for each channel.
@Jon, you're absolutely right. It’s important to strike the right balance of inbound and outbound for your own business, and determine which channels actually deliver the highest ROI.
Scott Bush 11:17 AM on February 28, 2012
The overall message of this post is spot on. While inbound marketing is proven time and time again to be both cost-efficient and more engaging, it's good to strike a balance between inbound and outbound marketing. Great information and thank you for another wonderful blog post.
Philip Eide 6:21 PM on February 28, 2012
Thanks for the Stats. to verify what many of us already knew! It is about balancing Inbound and traditional Outbound strategies.
In many industries like Insurance & Benefits, the old guard is slow to even shift a potion of their marketing budget to a sustained Inbound Marketing effort.
CB 2:19 PM on February 29, 2012
While this is an interesting survey, how much if it is actually backed by data (instead of people's best guesses) or real research is left to question. Case in point - the item about Google+ seems to be off. The Wall Street Journal had a lead story on 2/28/12 about how Google+ does not have much traction. In fact the sub-headline was "Playing Catchup to Facebook, Google's Social Network Is a Virtual Ghost Town by Comparison". Visitors to Google+ spent an average 3 minutes on the site in January, as opposed to 405 minutes on Facebook, 89 minutes on Tumblr & Twitter each, and even 8 minutes on Myspace. Given my limited time in a department of one, I'm going to concentrate on social media that can really payoff rather than Google+