It’s no secret that buyers are spending an increasing amount of time evaluating products and services online. Some research even suggests that more than 60% of the purchase decision is completed before a potential customer ever talks to a sales rep.
As a result, most marketer’s are increasing their digital marketing budgets to keep pace with this change in consumer behaviour.
But you may be surprised to learn where this budget is coming from.
In some cases additional digital marketing budget is simply an incremental investment or reinvestment from other marketing programs, but to our surprise a recent Gartner study revealed that 22% of companies have actually reduced their sales budget because digital marketing activities have changed their buyer’s path to purchase.
Now just wait – before you start haphazardly reallocating budgets you ought to know exactly what goes into executing a comprehensive inbound marketing strategy.
In this post we will discuss how to budget for the various components of inbound marketing, highlight the pros and cons of keeping marketing in-house vs hiring an inbound marketing agency and finally we will help you find the strategy that best suits your organization’s needs.
Budget for Inbound Marketing Software
Newly minted inbound marketers often misunderstand what inbound marketing software does, so let’s clarify any misconceptions - you don’t just sign up for a monthly subscription to an inbound marketing software platform and start generating inbound leads overnight – there is a lot of hard work that goes into a results-driven inbound marketing strategy.
“The inbound movement has never been solely about software. It's about a different way of engaging prospects, not as targets or numbers, but as people”
- Brian Halligan, CEO HubSpot
The software applications that successful marketers use are simply the tools that help them get their message to the right people, at the right time, and measure results. The technology would be worthless without a well executed inbound marketing strategy driving traffic, leads and sales. Similarly a well executed strategy would be much more difficult to achieve and much less measurable without the help of inbound marketing software.
Most software-as-a-service marketing platforms are priced on a tiered basis, starting around $200 per month, and are designed to grow with your business as you require more advanced features, deeper business system integration and higher usage volume. Just be aware that from a budgeting point of view, the software costs associated with inbound marketing tend to make up a relatively small portion of an operating inbound marketing budget.
Budget for Ongoing Content Production
Successful inbound marketing strategies draw on a variety of tactics including blogging, social media, lead nurturing email workflows and search engine optimization to attract targeted website visitors, convert them to qualified leads and nurture them through the customer lifecycle.
Each organization requires a unique mix of digital marketing tactics in order to effectively attract visitors, leads, and customers. The skills required to get started with inbound marketing typically include:
○ Blog posts
○ Funnel offers
○ Website copy
○ Landing pages
○ Search engine optimization
○ Conversion rate optimization
○ Trend analysis
○ Multivariate testing
Graphic & Web Design
○ Frontend web design
○ Ebooks, whitepapers, infographics
○ Conversion focused design
○ Backend web development
○ Web applications
○ Business systems integration
Social Media Management
○ Social media monitoring
○ Community management & growth
○ Social lead generation
○ Social customer support
○ Direct lead follow up via email and phone calls
○ Knowledge of Salesforce, or your CRM of choice
○ Motivated by selling
Whether you choose to keep your content production in-house, or to outsource it to an agency, keep in mind that there is a always a cost associated with the time it takes to execute these tasks. In fact, the biggest line item in your inbound marketing budget will likely be content creation as it is the cornerstone to an effective inbound marketing strategy.
Don’t Forget About Testing, Optimization and Iteration
Marketers that are accustomed to traditional marketing tend to underestimate the power of marketing analytics. However, inbound marketing is most effective when it is driven by analytical decision making, multivariate testing and on-going optimization.
When executed properly multivariate testing can dramatically improve lead generation results. Even simple A/B tests that measure the conversion rates of button copy, form length or landing page design can often increase conversion rates.
In House vs. Outsourced
When organizations adopt inbound marketing one of the biggest budget considerations is whether or not they have the in-house skills and resources to execute the various components of a contemporary marketing plan. Unless you have an extra marketing department that happens to be looking for work the question then becomes whether to recruit, hire and train an in-house inbound marketing team, hire an inbound marketing agency or go with a hybrid in-house + agency strategy.
At the end of the day this decision comes down to one thing: return on investment.
If you have in-house marketing employees in-place, do they have the proper skill set for inbound marketing? Do they have any idle time to take on new initiatives?
Inbound marketing is certainly not a set it and forget it strategy. At minimum you should be writing 3 blog posts/week, creating corresponding landing pages and funnel offers, conducting keyword research, reviewing analytics dashboards, building a social media following and that’s really just scratching the surface.
Furthermore, to achieve the highest ROI from inbound marketing you need to have strategic alignment between sales and marketing. Sales reps need to take action on inbound leads in a timely manner, everyone needs to understand the inbound process and in general inbound marketing requires a heightened level of collaboration between sales and marketing. For this level of collaboration to operate efficiently, someone, ideally an internal marketing employee needs to oversee and manage all inbound marketing efforts.
What’s best? In-house vs Agency vs Hybrid Team
Pros, cons & limitations of an in-house team
In-house marketers can be a very valuable asset when it comes to the strategic direction of your marketing efforts. In our experience, organizations that have full-time in-house marketers tend to have a higher degree of sophistication when it comes to their understanding of their buyer personas, the competitive environment, industry trends and business growth opportunities.
While in-house marketers can be well suited for strategic direction and project management they quite often lack the experience and knowledge required to execute the more technical components of inbound marketing - things like search engine optimization, multi-variate testing, interface + graphic design and web development.
Hiring the right team - the benefits of partnering with an Inbound Marketing Agency
If you need some new digital talent to round out your marketing team be aware that inbound marketing is a relatively new field and top talent can be hard to find. Inbound marketing agencies, startups and tech companies have sntached most of the available talent.
If your organization typically favors keeping marketing in-house, don’t underestimate the amount of training it will take to get new employees up to speed. It is a steep learning curve to become an expert in inbound marketing methodology, new software platforms, search engine optimization best practices and conversion rate optimization.
One of the major advantages of working with an inbound marketing agency is the fact that you can really hit the ground running. There is no need to waste time recruiting, hiring and training in-house marketing employees. Starting right from day one an experienced inbound marketing agency will be able to align your marketing strategy with your business goals and design a results-driven inbound marketing plan. The speed at which an agency can help you can plan and implement a comprehensive inbound marketing plan often leads to much faster return on investment.
Cost comparison of hiring an in-house team vs partnering with an agency
When you consider the cost of hiring even the smallest marketing team - one Manager/Director of Marketing and a designer/developer you are easily looking at over $120,000 for salary costs alone, not to mention payroll taxes, general office overhead, laptops and software costs.
While any decent agency will customize your inbound marketing services package to suit your business objectives in general you can expect that an equivalent investment in an on-going agency retainer would cover a rather significant volume of work. Monthly deliverables might include inbound marketing strategy counsel, blog posts, platform integration, landing page design and development, funnel offer content creation and marketing automation workflows.
Another thing worth noting is the perpetual challenge of staying up-to-date on the latest digital marketing tools, search engine algorithm updates and social media channels. If you choose to partner with a well established inbound marketing agency you can rest assured that you are on top, if not ahead of the industry best practices.
The last consideration I would like to draw attention to is experience. Inbound marketing agencies draw experience from developing and executing inbound marketing strategies for a number of organizations in various industries, giving you the opportunity to tap into a depth of inbound marketing know-how.
1) There are four critical components to an inbound marketing budget
- Software costs
- Content production
- Testing, iteration and optimization
2) To achieve the highest ROI from inbound marketing you need to have access to a rather diverse, yet specific range of skillsets
- Content writing
- Analytical marketing
- Social media expertise
- Business development
- Project management
3) In-house marketing teams often lack some of the technical and analytical skills to execute inbound marketing – this can be offset by partnering with an inbound marketing agency
4) Partnering with an Inbound Marketing Agency has numerous benefits including
- Faster time to ROI - Eliminates the time required to recruit, hire and train employees
- Expertise in every area of inbound methodology
- Experience drawn from a portfolio of clients