Smarketing Blog

Outbound vs. Inbound: Marketing Spend vs. Marketing Investment [INFOGRAPHIC]

Those of you who know me well know that in a prior life I worked for a private equity company that focused on acquiring mid-size manufacturing companies.  I then became a small business owner/operator investing and running a specialized construction company.  I can tell you that it has not always been easy to make the long-term investment over the short-term instant results when it comes to marketing. Do you feel the same way?

Seeing my logo on a web banner, my name on a billboard, or hearing my voice on a radio ad made me feel like I was doing something to promote my business. So many eyeballs, and so many ears! It’s gotta be working, right?

That wasn’t the case for my construction business or manufacturing companies I closely analyzed, and that’s not the case for most of our inbound marketing agency clients - which means, that’s probably not what your business needs, either. We created this infographic to illustrate what does work for your bottom line:


Marketing Investment vs Spend



Change Your Perspective: It's About ROI


Changing your perspective on your marketing dollars will make all the difference when it comes to that line item on your budget. If you’re looking at marketing as money that disappears in the name of “building brand identity”, you’re doing it wrong. You need a strategy that incorporates inbound marketing. Not only is it measurable (in a way that no billboard or radio ad ever could be), it’s also much, much more cost-effective. Inbound leads cost 61% less on average than outbound leads (HubSpot). For limited budgets, brand awareness should not be the priority. Your priority needs to be pinpointing your audience with relevant content in order to convert them to leads. Period.

Manufacturing CEO Circle“But inbound marketing is so slow!” I can hear you arguing with me now.

“We don’t have time to wait around for content strategy, production, and SEO build-up!”' I’ve been there. I understand your mindset.

But hear me out: investing, not spending, your marketing dollars in a strategy that generates better leads in a shorter time frame is the dream. That’s what inbound does.

It’s easier to spend money and feel like it’s moving you forward quickly than it is to invest money and slowly realize the returns. But as anyone who has made the switch to inbound marketing and inbound sales can tell you, investing your money will feel well worth it in the long-term. Those quick, instant-gratification feelings of spending will have faded long before the satisfaction from investing wears off (if it ever does!).


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Investing vs. Spending


Spend money you never want to see again. Invest money you want to see again, and at a higher return.

Investing money on marketing with the purpose of measuring returns is where the mindset changes. Once you measure the return on your inbound marketing investment, then you can put your dollars to work on things that correlate with more returns. Have I convinced you yet?

Here’s the thing: unless your company is Coca-Cola or Disney, you should be concerned about the return on your marketing dollars. Why? Because you should have a very specific target (called a buyer persona) that you’re trying to reach.

Coke and Disney can afford to market everywhere to everyone. You cannot. You need to invest.



Long-term vs. Short-term


Spend for a short gain; invest for a long-term strategy of winning.

marketing_investments_bring_in_high_returns.jpgYou’ve heard the quote “lose the battle, win the war,” right? Inbound marketing is like that. With spending, you’ll feel like you’ve made a great big stride in a short amount of time. But long-term, here’s what I see: you spend a huge amount of money in a month for a radio ad, and you get an influx of calls - but only a few qualified ones. In order to sustain that amount of leads, you need to keep the spend up.

Inbound is different. Producing evergreen content that’s useful forever (or at least, for a very long time) takes some time to build up - let’s say, that same month that you spent to produce the radio ad. But here’s the difference: it’s produced to be relevant to your exact audience. You’ll get fewer leads, but a higher percentage of them will be qualified. And the best part? You’ve invested in producing content that can continue to produce well past the original publishing date. 



Patience vs. Impatience


Patient leaders invest in long-term results; impatient managers spend for short-term gains.

This one is difficult to wrestle with because as a business owner, I know you want insta-results. But investing in quality marketing is a slow-cooker process, not a microwave result. Just like my pot roast, the results are worth the wait. Not only do quality leads increase, but the average cost of that lead is drastically reduced. In fact, the average cost per lead drops 80% after 5 months of consistent inbound marketing (Eloqua). That’s right in line with one of our manufacturing client’s results - an 89% increase in quality leads when they started producing consistent, relevant content. How’s that for a high return?



Maturity vs. Immaturity


Mature businesses invest; immature teams spend.

Spending_instead_of_investing_in_marketing_burns_money.jpgStrategic thinking is an absolute must for any business leader, especially in a small or medium-sized business. That’s why looking at your marketing dollars as an investment, rather than a spend, is so important. A mature business team will pay close attention to each dollar being spent to make sure that you’re getting your money’s worth; an immature team will spend on flashy, short-term advertising that looks cool - but doesn't have high returns.

When you put money into any part of your business, you should expect to be able to measure what you've received in exchange for your money. Whether you’re developing an app, hiring a new VP, engineering a new solution, or building a new machine, the return should be apparent. Marketing investments work the same way. If you’re not seeing quality leads at a high rate from that investment, you need to change what you’re doing.

Inbound marketing yields 3 times more leads per dollar than traditional methods (Kapost). While returns take a slight bit longer to appear, when the leads come in, they’re better and there are more of them. That’s smart investing.



No sales vs. marketing; sales PLUS marketing


Here’s the biggest return on your inbound investment: the effect that the quality leads brought in by marketing dollars has on your sales numbers. Companies that utilize inbound content platforms and offer buyer persona driven content see a 45% increase in the volume of Sales Accepted Leads (SALs) (Kapost).

When these two teams are working together and utilizing inbound methods, a mutual respect forms. Sales suddenly respects marketing for bringing in quality leads through the website. Marketing can suddenly see sales using the content they’ve produced to guide qualified leads toward closing. Amazingly, they even collaborate on what can be produced next and which leads to go after thanks to insights from a content management system or social media. It’s a beautiful thing.

Makes you kinda jealous, huh? Don’t be. You can change the focus at your company from marketing spend to marketing investment in no time. Check out our comparison calculator to see if inbound marketing makes sense for you.  Test your own actual numbers and assumptions and decide for yourself!  Let us know if you have any questions or need any help using this calculator.  Heck, you can even contact us to see if bringing our team on board for your inbound marketing efforts can get you those results even faster. Ready to get started?


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Topics: Content Marketing Blogging ROI Inbound Marketing Marketing for B2B Manufacturing Blogs Marketing for Home Builders Increase Lead Generation