Last week, we talked about outbound versus inbound marketing. Outbound marketing is the traditional marketing that pushes your message out to consumers via print and broadcast advertising, direct mail, unsolicited emails, telemarketing, trade shows, etc. Inbound marketing is online advertising that pulls consumers in when they are already searching for the products and services you offer.
Online marketing expert Brian Halligan, the guy who founded HubSpot and coined the term “inbound marketing”, has a useful analogy. Businesses are like lions hunting in the jungle for elephants. The lions can either wander around the jungle randomly, hoping to find an elephant, or they can hang out by the watering hole where all the elephants come to drink.
Hanging out by the watering hole has two advantages:
- You use a lot less energy.
- You’re sure to bag your prey.
In business speak, this translates to a single word: cost-effective.
Let’s look at some statistics taken from HubSpot’s recent survey of business owners and marketing professionals. These three basic statistics show just how cost-effective inbound marketing can be:
- In 2011, businesses that spent more than 50% of their lead generation budget on outbound marketing had an average cost-per-lead of $373.
- Businesses that spent more than 50% of their lead generation budget on inbound marketing had an average cost-per-lead of $143.
- Businesses that focused their marketing efforts on inbound marketing had a 62% lower cost-per-lead than their outbound-focused competitors.
These results are impressive, but at iMarket we’ve exceeded them. iMarket’s “Domination Package” customers have a cost-per-lead of under $75 per lead.
How are we able to do this?
Outbound marketing is actually a very clumsy marketing strategy. You put your message out to everyone, in the hope that the small subset of people who are actively considering buying a product or service that you offer might be watching, reading, or listening at the time when your message is broadcast. The only way to be sure you’ll reach that small number of prospects is to spend a lot of money making sure your message is repeated in as many places, and as often, as possible.
With inbound marketing, you don’t need to broadcast your message everywhere; instead you make sure that it’s where that small group of actively-searching consumers will see it. At iMarket, we have proven strategies for putting your message right where it needs to be, keeping your marketing budget to a minimum.
Also, there’s another reason why the cost-per-lead is so low for inbound marketing. With print and broadcast media, you pay more for every set of eyes or ears that receives your message. Inbound marketing, on the other hand, is digital. With inbound marketing, you create your message for a fixed cost that stays the same no matter how many people read or see it. The more people who see it and the more leads you get from it, the lower your cost-per-lead. (In business-school-speak, the marginal cost-per-customer-acquisition is extremely low for inbound marketing.)
HubSpot’s Halligan says that most marketers today spend 90% of their efforts on outbound marketing and 10% on inbound marketing, and he recommends that those ratios should flip. Based on our experience with inbound marketing, we second that recommendation!
Of course, most inbound marketing requires professional expertise to be really successful. But if you can’t afford professional marketing help, you can still reap many of the benefits of inbound marketing by posting regularly to your blog. That’s what we’ll talk about next week.