Transparent Growth Measurement (NPS)

How Inbound Marketing improves Small/Medium Scale Enterprises (SME)

Contributors: Amol Ghemud
Published: August 14, 2018

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Inbound marketing is all about providing valuable content and allowing sales leads to come to your website on their own terms. When you integrate inbound marketing into your marketing plan, you focus on sharing content that your target audience is already interested in, and your company becomes part of that conversation. Social media is a huge part of inbound marketing; it’s used to create a dialogue between your company and its customers and sales leads.

The most important thing about inbound marketing is that it converts leads to sales much more effectively than outbound marketing. Gone are the days when companies can purchase people’s attention with print ads and direct mail campaigns. Instead, companies are using inbound marketing to increase their ROI and are doing it in more cost-effective ways, too. It’s a brave new world out there, and we want to make sure that you’re getting as much out of it as you put into it.

Getting ROI is the Ultimate Goal

SME’s that effectively use inbound marketing build trust with their audience and establish themselves as a thought leader in their industry. They usually engage potential customers, lead the conversation, influence their buying decisions and build relationships that last.

There are many variables that aren’t measurable or quantifiable, so trying to identify a precise number that conveys the value of your inbound marketing activities may cause you to ignore the more intangible values such as trust, influence and relationship with customers. The effective ways to improve ROI can be variable with no two ways or strategies a uniform measure.

What is ROI?

ROI is an acronym that stands for “return on investment,” and most marketers will tell you it’s one of the most important metric you need to know so as to determine campaign’s effectiveness. If ROI is positive, the company is doing something right – and must keep working on the same lines to improve it. If ROI is negative, know that something isn’t working and it needs to change.

The main objective of any marketing initiative, strategy or tactic is to help business generate revenue. Measuring the ROI of the marketing tactics you deploy will help you make sound decisions on where your organization invests its marketing budget and continuously optimize the results your marketing resources produce and improve sales. But sometimes your ROI can manifest itself in multiple ways.

Sure it’s always important to measure the number of deals and total revenue that marketing helped produce, but it’s equally beneficial to understand all of the positive outcomes your marketing generates. Inbound marketing in particular has the potential to produce ROI in a variety of ways.

Why small businesses struggle to hit the ROI

Technology has leveled the playing field for startups and small businesses. Competing with big business marketing budgets has traditionally relegated fledgling and local businesses to eternally small market shares. Today, however, with digital tools and marketing automation, even a one-man band can put itself in front of thousands of potential customers – every day – and manage a contact list ten thousand strong.

With a modest budget, it is possible to implement a successful content marketing strategy and experience business growth.

So are the small business marketing teams standing up against their potential? In reality, small businesses aren’t, as a whole, able to achieve groundbreaking ROI numbers. Nor are they proficient in leveraging the digital assets that are at their fingertips. A recent study published by Drip, the 2017 Small Business Conversion Marketing Report, has uncovered a very telling trend.

Small business marketers miss the bigger picture. They do not develop long-term, all round, holistic strategies, and are missing out because of this oversight. When marketers cannot get results they’re looking for, is it because a specific tactic doesn’t work, or because the supporting tactics aren’t in place to allow it to work?

What small businesses are doing is focusing on one or two aspects of a complete strategy.

  1. Running powerful social media campaigns – but having weak landing pages, if any at all, to capture leads.
  2. Building an enviable email contact list, without the regular customer delights and a strong social media presence to keep those leads engaged.
  3. Developing a strong lead generation strategy with a consistent, value-driven blog and viral video campaign. Watching site traffic grow, and wondering where all the sales are because there’s a barely-there lead nurturing strategy in place and no plan for retaining existing customers.

And those who are taking a few steps further down their road of successful digital marketing, are doubling the results of those who aren’t. Just by using a landing page for your SME or launching a quality blog, or even diversifying their strategy with digital advertising, they are getting more leads and more sales.

Small business owners are failing to go the further distance. SME are usually crunched in their time management. They are not aware of the productivity benefits of marketing automation software. Have strained resources, and end up putting time and money into one-sided digital assets that aren’t bringing in a great ROI.

What would happen if they took a few more steps, or better yet, a step outside of their actions to get a clearer picture of their overall strategy? Then the solutions – utilizing better software, measuring more of their marketing, adopting a better content plan, finding ways to improve upon the digital assets they are using – would be much easier to see.

How to measure Inbound Marketing ROI

This depends on your goals. But for most SMEs, page views, email subscribers, user registrations and sales will be among their top priorities.
Here are several KPIs that you should be tracking:

  1. New leads. How many leads are you attracting every month?
  2. Marketing qualified leads. These leads are likely to become future customers based on criteria such as company size, content consumption and so one. These are leads you’ll want to specifically target with your marketing.
  3. Sales qualified leads. These leads are interested in talking to someone from your sales department. Sales and marketing teams should agree on a specific target number to meet on a monthly basis.
  4. Opportunities. This is the number of leads that engage with the sales team and move down the sales funnel. There is a good chance they will become new customers.
  5. Customers. The number of new paying customers.

But you’ll also be reporting to management, who will likely request:

  • Customer acquisition cost (CAC). Your cost of customer acquisition can be calculated by adding up your advertising and marketing overhead and dividing it by the number of customers for a set period of time.


  • Marketing as a percentage of CAC. This number varies depending on the industry and the type of company you’re a part of. Your goal should be to have a benchmark you can measure against.


  • Ratio of customer lifetime value (CLV) to CAC. If, for example, your CAC is $100,000 and the lifetime value of the customer is $600,000, your CLV to CAC ratio would be 6:1. At first glance, a higher ratio is better, but this isn’t always the case—it usually means you can increase your growth by spending more on marketing.



You can continue to use outbound marketing and waste the marketing budget. The obsolete tactics usually will not transform the company but the inbound marketing tactics will. As opposed to outbound being costly and ineffective, inbound marketing is cost-effective and reliable. Inbound Marketing improves bottom line of SME by improving the overall ROI of the SME.
Need more convincing? Let’s compare the return on investment for both forms of marketing.

The Average Costs of Traditional Marketing

Knowing what things cost can help you make the right decision. You’ll see that inbound marketing is significantly less expensive than outbound.

Radio: Rotating spots on a radio channel for a specific duration typically costs between $500 and $1,000.

Newspaper: A newspaper ad will cost you approximately $250 while a bigger display ad will cost you closer to $2,500.

Television: TV is one of the costliest traditional advertising channels and it has been like this for decades. And you can expect to dish out more than 200 thousand dollars for a prime-time national spot. Even just a 20-second promotion in your local market will cost you hundreds of dollars.

Magazines: Want a full-page ad in a national magazine? You’ll probably need to pay over 100 thousand. Even smaller ads will cost you thousands per month. The reader base for traditional magazines is declining rapidly.

Yellow Pages: For a simple half-page ad, you’ll need to cough up $1,000 per month.

Trade shows: Trade shows with cost you thousands of dollars for just a couple days at a booth.
The average cost per lead for these types of campaigns is $346.

ROI of Outbound

So you’re spending out hundreds of thousands of dollars on outbound tactics like the ones described in the above section with a hope that money will create a great return on investment. But guess what? It won’t because people aren’t looking, listening, or reading these types of ads. They’re tuning them out and ignoring them in an era where they’re bombarded with hundreds or even thousands of similar messages every single day.

Plus, since it is difficult to calculate the effectiveness of these types of marketing tactics. There’s no way to actually figure out the ROI earned by your SME. Inbound marketing offers better ways to improve bottom line of your SME.

The Average Costs of Inbound Marketing

Now let’s look at how much it’ll cost you to pay to create an inbound marketing strategy that attracts leads.
Website: A small business website will cost you approximately $2,000, but could cost upwards of $12,000 depending on the project’s complexity.

SEO: The average search engine optimization campaign will cost about $500 to $4,000 per month depending on the agency you use. You can do it for free on your own, too.

PPC: Pay-per-click advertising will cost $500 to $2,000 per month if you choose to use it, but you don’t have to.

Social Media Marketing: You can post on social media on your own for free or have a marketing expert do it for you for around $1,000 a month.

You can also get a package from a digital marketing agency for all of the above, which will cost approximately $3,000-$9,000 a month. The more you budget for online digital marketing, the better your ROI and the better your bottom line. The lead generation channels and techniques can be spread over a variety of inbound strategies so as to reap the benefits and cater to a wider audience.

ROI of Inbound

Much of the inbound marketing tactics you should deploy can be done by the experts or you can outsource them to professional consultants and digital marketing agencies. And in contrast with outbound, every aspect of inbound marketing can be tracked, measured, and analyzed. You can know exactly how many visitors you visited your website, how many conversions you’ve received, and even how long leads have looked at your web pages.

For SMEs, the business’s bottom line depends on the lead generation channels activated and the ROI generated. Inbound Marketing improves bottom line of SME.

As inbound marketing is in sync with modern consumer behaviour, it attracts leads instead of interrupting them. And is very target oriented, its effectiveness is incredibly higher than that of outbound. In fact, your cost per lead will be approximately 62% lower with inbound, at $135.


Better tracking and measurement of your marketing efforts, will improve to make them effective and efficient. Outbound marketing makes this virtually impossible to do as traditional outlets are one-way. Once the message reaches the wider audience then you have absolutely. No way to understand how the message affects the consumers’ behaviours or whether or not it moved them to make a purchase.

Want to use inbound marketing to boost your marketing efforts?
Inbound, on the other hand, is performed online usually by a team of experts. It can track almost everything online and measure with the use of right metrics and tools. The business owner will be able to see exact results for any given campaign, channel, or tactic and also to refine and realign the strategy. And being able to do this results in a higher ROI.

About the Author

amol ghemud
Optimizer in Chief

Amol has helped catalyse business growth with his strategic & data-driven methodologies. With a decade of experience in the field of marketing, he has donned multiple hats, from channel optimization, data analytics and creative brand positioning to growth engineering and sales.

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