The Real Cost Of Inbound Marketing - What You Need To Know & What You Can Expect
Just putting out some random blog posts and social media messages and expecting them to get results is just not cutting it anymore. Your potential customers are so bombarded with information and advertisements every day; that they are overwhelmed. You might have read the "Beginner's Guide to Inbound Marketing" and know that you have to find your buyers where they pay attention and provide value to them — something that gets their attention and provokes them to take some form of action, like downloading your content or attending one of your webinars. You need to formulate an effective inbound marketing strategy and continuously work on your inbound marketing. And that requires hard work, skill, talent, and resources.
Many companies are aware of this fact and reach out to us as an inbound marketing agency by scheduling an Inbound Marketing Assessment or requesting a consultation. One of the first questions we get from a lot of prospects when talking about Inbound Marketing is what the whole thing will cost (ballpark figure) — however, that is one of the last questions we answer.
It's not that we are trying to be secretive or hide something about our service costs — if you have worked with us in the past, you know, we are all about transparency. However, by giving pricing without knowing your goals and unique circumstances, I would do my clients a disfavor by quoting a monthly one-size-fits-all retainer price. Because one size just does not fit all.
General Assumptions About Inbound Marketing Costs
In general, it is safe to say that across different industries, companies take, on average about 5% of their revenue and reinvest it into their marketing. That is a healthy marketing budget, but you should check what is appropriate in your industry. However, this is the entire marketing budget (depending on your accounting style this might or might not include the payroll costs of your marketing employees). It pays for your website, promotional articles, direct mailings, your sign above your door and of course, your inbound marketing.
As for the inbound marketing portion of your budget, it depends on various factors. In general, it is safe to say that the average medium size American company spends about $60,000 to $100,000 per year on their monthly inbound marketing efforts by either hiring an inbound marketer internally or an agency. This does not include a website or software license costs for the marketing automation software platform of your choice.
Having said that, you need to take this number with a grain of salt! How much you need to spend depends on your market, your market position, your previous marketing efforts, internal marketing talent and of course on your business goals. So, let's have a closer look at it.
Why Does One Size Not Fit All?
Asking how much inbound marketing costs without knowing more about your business is like asking a car salesman how much a car costs. Well, do you need a minivan for your growing family, a racecar or a cabrio? How much money do you have to spend? Do you want to buy a used car or brand-new? Lease it or buy it?
The same goes for your inbound marketing program. Here are a few factors you will need to consider when determining how much effort it will take you to reach your goals:
- Business Objectives. Where do you need to be in 6 months? How about in 12 months? How aggressive do you want to grow? If you have modest goals, you do not need to go all out and have a competitive inbound marketing program.
- Internal resources, skill, and talent. Do you have internal resources that could run your inbound marketing or do you have to outsource?
- Competitive landscape. What is your competition doing? How aggressive are they? Or are you the undefeated market leader, whose products are in high in demand? Then you will need a very different budget from a company entering into a small niche market that gets a lot of interest but has little competition. Or from a company who faces a fierce competitor that is also doing inbound marketing.
- Milestones & timing. Are there specific milestones you have to keep in mind? What is the timing on your campaigns?
- Product. Believe it or not, if you have an outstanding product, marketing it will be much easier.
Consider your unique situation and make the determinations as to which components you need right now and which can be done later.
One-time Inbound Marketing Costs
When considering your potential inbound marketing costs, you can break it down into separate parts that are needed to run an efficient inbound marketing program, for example:
- Inbound-Optimized Website
- Growth-Driven Design
- Marketing Automation Software Costs & Set Up
- Inbound Marketing Strategy
- Buyer Persona Research & Definition
Inbound Marketing Optimized Website
Your website could be your best sales person — your biggest business development asset you have in your arsenal! Why? It's simple. Your prospect will complete more than 60% of the sales process BEFORE contacting your sales team by researching your company and products on your website and other information found online about you.
Now you have two choices: You have a basic website with an about us, products and contact us and let other people provide additional content that you cannot control (user reviews, reported problems with your product, instructions on how to use it, in-depth product information, etc.) OR you create a hub that allows visitors to find the content they crave and users to communicate with you!
Of course, the latter makes a whole lot more sense. And that is what we mean by an inbound marketing optimized website. You create content that speaks to your individual buyer personas in all phases of their buyer's journey, you give your visitors plenty of opportunities to self-identify as a lead and you guide them with valuable, helpful information down the funnel instead of pitching to everyone and anyone the same pitch right away.
The average website for a medium-size company costs about $15,000 - $80,000 depending on what you need. However, most inbound marketing agencies' website design prices start around $5,000 - $10,000 since these are usually more content heavy and less eCommerce and development heavy. Currently, a website is being redesigned every 18-24 months — minor updates are being done when needed.
While the traditional website design process is the standard, Growth-Driven Design is gaining fans fast! The iterative approach to web design, adapted from lean manufacturing processes, where a company gets a product into the hands of the actual users. The company will test their product often and early to find potential problems as soon as possible and to increase adoption and usage rates.
In the case of a website, the goal of growth-driven design is to have a launchpad website ready within the first 30-45 days and then continuously improve upon it — for example by creating additional marketing assets (cost calculator, assessments, etc.), improving conversion rates and adding content.
These websites are usually easier to scope, on time and have less up-front cost.
Marketing Automation Software Cost & Set-up
Which marketing automation software to choose is a tough question. It depends on your preference and how you are planning on using it. We obviously love HubSpot — hence the decision to become a HubSpot Certified Partner Agency. If you have narrowed your list down, you can head over to Go2Crowd (see below) to compare your choices side-by-side.
But let's stick with HubSpot for a moment. For arguments sake, let's say you are a medium size company and your website gets more than 3,000 visits a month, you have more than 1,000 contacts and are planning to build your new website on the HubSpot COS, that will put you on the Professional plan:
- $800/month HubSpot Professional
- $50/month 1,500 contacts (1,000 included)
- $200/month HubSpot COS
- $3,000/one-time Onboarding fee, which is waived if you onboard with a Certifed Partner Agency
That is a total investment of $15,600 (or $12,600 with an agency) for your first year. It sounds like a lot — especially compared to other marketing automation suites out there. But before making a decision, make sure your solution includes all parts needed to run a holistic inbound marketing campaign from beginning to end. Also consider the ROI of being able to measure, analyze, and report on everything within one tool.
To find out what your pricing would be like, go to the HubSpot Pricing Tool.
Some agencies also offer HubSpot onboarding programs to jump-start your internal inbound marketing efforts. This will often be combined with a website redesign or can be done stand-alone. Usually, the agency will set up the HubSpot software, create first conversion paths, run your first campaign and offer support through consulting while your team gets up to speed with the training. These onboarding engagements last between 1-3 months and cost several thousand dollars depending on the agency.
Inbound Marketing Strategy (60 Day Game Plan)
When signing on with a reputable inbound marketing agency, you can expect to spend the first one to two months building your inbound marketing strategy, before diving into a regular "rinse & repeat" program. This is a very good idea for internally executed inbound marketing efforts as well.
In this initial period, you will get all your ducks in a row and set yourself up for success:
- Kick off meeting to get all internal stakeholders on the same page and onboard (e.g., management, marketing, sales, business development, product management, etc.)
- Thorough Marketing Audit: This audit will include all areas that are relevant: Content, website, SEO, analytics, social media, lead generation
- Research and define your buyer personas and their buyer's journey
- Interview sales, marketing, partners and customers to get different perspectives (lead definition, criteria and desired quality, usability of website, partner enablement effectiveness, etc.)
- Competitive analysis and assessment of industry landscape
- Identify gaps and opportunities
This analysis and research phase will result in a comprehensive strategy paper (sometimes called a Game Plan) that is the foundation your inbound marketing success is based on. If you rush this or don't do it thoroughly, you might miss some low-hanging fruit opportunities or even worse, speak to the wrong buyer persona and waste months of work that will result in low-quality leads.
The gameplan can cost anywhere from $2,000 to $15,000 depending on what kind of agency you hire, how deep they will dive into your business and their expertise.
Buyer Persona Research
Some circumstances might warrant that you do some additional buyer persona research after you have already started your inbound journey — for example when you introduce a new product that targets an entirely different market segment. Or you find that the quality of leads you are receiving is not what it should be, and you decide to look into your buyer personas again.
Whatever your reasons, supplementary buyer persona research can be an extra expense you must consider when planning for your inbound cost.
Ongoing Monthly Inbound Marketing Costs
Now that we have looked at the upfront costs, let's dive a little deeper into the monthly, ongoing inbound marketing efforts and the investments needed to execute them.
To better explain the effectiveness of monthly Inbound Marketing work, let me use a campfire analogy. You are out in the woods, and you need a fire to keep you warm and animals away during the night. You will need to do some prep work: find and chop dry wood, pile it neatly into a formation that lends itself best for an ongoing, sustainable and warming fire. That is the strategy part. Once you have kindled the fire, you can add firestarters and paper to make it burn bright and high — those are your short-term campaigns. However, in order to have a fire for a long time, you need to supply it with great quality logs of dry wood — those are your foundation builders. As the fire is burning, you will want to see what works and what does not work, so you can build an even better fire next time.
Sustainable inbound marketing needs all those components: strategy, short-term campaigns (catalysts) and foundational work (foundation builders).
Monthly Inbound Marketing Foundation Builders
Let's look first at the foundation builders. These activities have more of a long-term, compounding return on investment — meaning, if done right, your blog posts that you wrote a year ago are still driving traffic to your site and converting leads.
These activities could be:
- Weekly blog posts
- Ongoing SEO improvements
- Consistent social media posting & engagement
- Website content creation
- Analysis and Reporting
These kinds of activities do not have a project-character of short-term campaigns: they are being performed on an ongoing basis. While this does not sound very exciting, this is the very vehicle that carries your campaigns. The goal is to build a loyal audience that will be excited to hear about your campaigns when you launch them.
Short-term Inbound Marketing Campaigns (Catalysts)
Campaigns, on the other hand, are planned about 4-6 weeks ahead of the launch date, and they run for 4-12 weeks depending on the frequency. After that they will still continue to generate leads (unless it is a time-limited campaign), but step into the background a bit to let the next campaign be center-stage.
For these, your marketing team or agency will create the following:
- Design and create an eBook, whitepaper, etc.
- Create a conversion path (e.g., call-to-action, landing page, thank you page, and follow-up email)
- Promote it via social media (e.g., Facebook cover, social media message, Linkedin Ad)
- Promote it via website and blog (add CTA to resource page, write a promotional blog post)
- Segment your contact database and build a workflow
- Run an email marketing campaign
The cost greatly depends on the intensity and the frequency of these activities — which in turn depends on your goals. You can run a campaign every three months and have a weekly blog post etc. or you run a campaign every month and have 3-4 blog posts a week. It all depends on how fast you need to grow.
As you can see, the costs for inbound marketing varies a lot depending on your goals, your internal resources, your competitive situation and of course on how aggressive you want to pursue this. If you want to have one of our inbound marketing experts look at your unique situation, click on the call to action below and request an inbound marketing assessment.