So you want to grow your business? Great, now comes the hard part. Marketing takes a lot more than an impressive catchline or a cool logo. In today’s hyper-competitive digital landscape, it can be hard for businesses to know where to start. Inbound Marketing can be a very powerful way to drive leads, but not all inbound is created equal.
Inbound marketing is a strategy centered around drawing customers to products and services using techniques like content marketing, social media marketing, and search engine optimization. While these methods have become increasingly popular over the past few years, many companies jump right into them without much thought. This action often leads to poor results and frustrated business owners.
As the owner of an inbound agency, I’d like to say that Inbound is right for everyone, but that’s just not the case. So how do you know if Inbound Marketing is right for your business? Below are five things to consider when determining if Inbound Marketing is right for your company.
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A Targeted Niche Audience
Many people think they need a huge audience to be successful online. But did you know that the most successful products online tend to be more niche? When you go broad, it’s much easier to get lost in the noise. But when you are targeted and precise, you have a much louder voice.
It can be tempting to go after the large market, but trust me it’s harder than it looks. Focusing on a smaller, more targeted group is the way to go. In “Crossing the Chasm,” Geoffrey Moore, talks about the importance of getting early adopters on board. Early adopters are a small core, group of people who are passionate about your product.
Inbound Marketing works best when you can deliver your message to a targeted, niche audience. Getting your audience onboard with your message is key to your long-term success. In fact, 68% of online buyers will spend considerable time reading content published by a brand or business they that catches their interest. (The CMA) Your target niche audience is the group that will carry your message to the masses. Before starting with Inbound, make sure you know who benefits most from your product or service.
Compelling Product
Having a great marketing message is pointless if you don’t have a compelling product. Now, this doesn’t mean your product has to have lots of flair; it just needs to meet your prospect’s needs.
I’ve seen inbound work in very high-tech innovative industries as well as more traditional, less “sexy” industries. What matters is that you have a product to solve a pain point. Here are a few questions you can ask about your product to determine how compelling it is.
- What does a prospect expect from it?
- What problem does it help them to solve?
- What value would they put on it?
- What other products in the marketplace would they consider instead of this?
- What do they like about the other competing products on the market?
- What are the existing products on the market lacking that yours has?
- What would help them decide to change to your product?
- Would they even consider using your product if they are already using a competitor’s version?
These questions will help you better understand your product as well as your positioning in the market. Having a compelling product is crucial to developing an inbound marketing campaign.
Moderate to High CLTV (Customer Lifetime Value)
Having a medium to high customer lifetime value (CLTV) is another essential aspect to consider. Inbound Marketing is a long-term strategy and often has many levels in the lead nurturing process.
While many see Inbound as a quick way to grow, the fact is it does take time. If your company needs to sell a ton of low-priced products fast, Inbound may not be your best approach. But if you have a moderate to high CLTV, then Inbound can be both a beneficial strategy and a cost-effective one. In fact, the cost of 3 out of 4 Inbound Marketing channels is less than the price of any Outbound Marketing channel. (Mashable)
So you may be wondering, how do you calculate your CLTV? Understanding your CLTV can help your business answer some critical questions according to propeller CRM:
- How much can we comfortably spend on marketing and sales for customer acquisition?
- How much should we spend on customer service to retain an existing customer?
- Who are our most valuable customers and how can we better target this demographic for future sales?
Here’s a quick example of the simple CLTV formula in action:
Let’s say a company generates $3,000 each year per customer with an average customer lifetime of 10 years and a CAC (Customer Acquisition Cost) of $5,000 for each customer.
The company could calculate CLTV like this:
$3,000 * 10 – $5,000 = $25,000
As you can see, this makes it easier to justify the sales and marketing budgets required to land new customers for your business.
The Right Resources (Time and/or $)
Before starting with Inbound, you need to be sure you have the right resources. If you are going to do Inbound yourself, you are going to need time. If you want someone to help you out, you are going to need capital.
For those of you looking to take on Inbound in-house, you will need to have a basic understanding of content marketing, SEO, social media as well as strategy development. Having the right tools is also key. For a list of some of my favorites, check out this post.
If you don’t have the time, then you’ll need to hire some help. Before hiring any agency, take some time and learn about them. Impact Brand does a great job of laying out what to look for in an Inbound Marketing agency. Here is a brief overview:
- Case Studies / Customer Proof
- Desire to Develop a Strategic Plan
- Ability to deliver a variety of Inbound Marketing services
- They Practice What They Preach
- Focused on the Success of Your Business
- Values Transparency
You can read their full post here. If you do plan to hire an agency, you’ll need to expect to pay anywhere from $1500 – $12,000 per month in retainer fees.
Commitment to Your Goals
Inbound is not for the faint of heart. You must be committed to your goals if you are going to see results. When I began implementing Inbound for myself, I wrote three pieces of new content each week for a year before I really started to see a return on my investment. That’s right; it took over a year. But that foundation has led to more than 10x growth in revenue.
Make sure that you set both long-term and short-term goals. The long-term goals will keep you focused, and the short-term goals will help keep you going. Success never happens overnight, but what you put in each day starts to compound over time. If you are considering Inbound, you need to have the heart to stay in the game for the long haul.
While Inbound Marketing is a trendy topic, it’s not for everyone. But for those that meet all or most of the criteria above, Inbound Marketing can pay off hugely in the long run.
