How to Measure Return on Investment: Is Your Inbound Marketing Working

March 15, 2017 |   5 minute read

How to Measure Return on Investment: Is Your Inbound Marketing Working

Do you remember the days of walking around your grade school classroom measuring everything in sight with an unwieldy wooden meter stick? Wouldn’t it make your life easier if you could measure return on investment for your inbound marketing just as easily?

Well, you might need more than a pencil and notebook to measure these analytics, but once you know which ones to pay attention to, measuring Return on Investment (ROI) on inbound marketing can be just as easy.

“Using a combination of metrics to establish your overall return on investment for your inbound marketing will definitely convince you it has been money well spent. Your content will keep giving you returns long after you have finished paying to create it.” 

4 Key Metrics on How to Measure  Return on Investment for Inbound Marketing

According to Hubspot, there are 4 types of Content Metrics to measure the Return on Investment (ROI) for your inbound marketing. Here’s a brief summary:

1. Consumption Metrics

  • Number of times a piece of content (page, blog, video, etc.) is viewed
    • How much web traffic you have
  • How much time a prospect spends on each page
    • What your prospects are interested in on your site
  • Bounce rate (percentage of single page visits)
    • Level of awareness about your brand

Many analytics tools are available to track consumption metrics - Google Analytics, Hubspot. Hatchbuck.

2. Sharing Metrics

  • How far your content reaches
  • Who is aware of your content
  • How it resonates with prospects
  • How prospects engage with your content

As the name implies, they measure how often your content is passed on via shares, likes, retweets and email forwards. This includes inbound links from external sources.

“Developing quality content for your inbound marketing will increase your ROI with prospects spending more time on your site and sharing more of your content. Ultimately, more prospects will be converted into customers.” 

3. Lead Generation Metrics

  • How much your prospects value your content
    • Includes the number of form submissions and blog and email subscriptions
  • Conversion rate
    • Percentage of prospects who became consumers by making a purchase

4. Sales Metrics

  • Quantify how content impacts purchases
    • How many times a page was visited leading up to a purchase
    • Which pages are the most commonly viewed prior to purchase

Since all marketing goals include revenue generation, sales metrics are very important. But they can be difficult to quantify, as customers often need a minimum of 7 interactions before deciding to purchase. Knowing which pages prospects visit and for how long, prior to purchase, makes sales metrics easier to measure.

Return on Investment – Is Inbound Marketing Making Me Money?

The investment for your inbound marketing includes the wages you pay for design and content creation, as well as any software or subscriptions you purchase and associated hosting fees. Assign a portion of your overhead to inbound marketing as well.

To calculate revenue from your inbound marketing, besides your gross profits, include the AdWords equivalent for your quality content, assign a dollar value to each customer, and place a dollar value on indirect leads (such as email subscriptions).

Revenue minus investment, divided by investment. Multiply this result by 100 to express your ROI as a percentage.

If you paid a professional inbound marketer $5,000 to create content for a month and your revenue for that same month was $200,000, that is a 3900% return on your investment.

Are you feeling like a budding statistician? Start measuring your inbound marketing success with this checklist from Tangible Words.Download Your Inbound  Marketing Checklist Now

Download our checklist today to start maximizing the return on investment for your future marketing campaigns!
If you would rather just measure your office desk or an imaginary blackboard, let Tangible Words become the meter stick of analytics for your business today!Contact Alysha

References (Neil Patel) (David Meerman Scott)