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How Much will Inbound Marketing Cost Your Small Business?

Studies have shown that inbound marketing is 54% more effective than traditional outbound marketing. Small business owners have a few options when it comes to using inbound marketing in their businesses, whether it’s done by someone in your organization, a contractor, or an agency partner. So just how much does inbound marketing cost a small business? Before we dive into the numbers, let's first cover the why.

Inbound marketing has many advantages, especially for small businesses. According to the 2017 State of Inbound Report:

  • It’s more effective: 68% of organizations following an inbound strategy claim their strategy is effective (while only 48% of those using outbound methodology can show effectiveness).
  • Delivers higher-quality leads: 59% of marketers rate inbound marketing leads as their highest quality leads.
  • Delivers a greater ROI: 46% of organizations polled claim inbound delivers a higher ROI for them, while only 12% claim outbound works better for them.
Results from the 2017 State of Inbound Report showing the impact of inbound marketing on ROI

So really the question becomes, why wouldn’t you consider inbound marketing for your business? 

What Components Will Impact Your Budget?

There are several factors you need to keep in mind when it comes to finding resources to carry out an inbound strategyWell, before you dive in, know that while inbound practices are far more cost-effective, you should be aware of the costs required for a successful inbound marketing strategy.

We’ll detail different options but keep in mind, these are all average numbers based on typical 12-week marketing campaigns throughout a year and they don't include any marketing tactics or strategies outside of inbound. These numbers will fluctuate based on differences in your business, market, location, and goals.

Time

Inbound marketing is a long-term strategy that takes time and consistency. If you don’t (or won’t) have the time to devote to marketing your business consistently, you’re in for a rough ride.

Strategy and Pre-Campaign work

A lot of the work that goes into an inbound strategy is front-loaded, meaning that it’s completed before you write a single piece of content or social post. This can include creating buyer personas, setting goals, conducting competitive research, and setting KPIs and benchmarks. If none of this has been done yet, consider investing between 30-50 hours to do all this well.

Ongoing, Weekly Tactics

The time required for ongoing inbound efforts depends on how aggressive your goals are. Use our web traffic calculator to help determine how much traffic you need to drive to your website to achieve your lead generation goals. Depending on the complexities of your market, your campaign, and your goals, here is how much time, on average, you can expect to be spent on marketing each week for successful inbound marketing campaigns:

 

Task Hours
ongoing strategy 3
collecting and analyzing data  3.5
project management*  5
meetings, admin 3.5
content research  3
editing  3
writing 15
social media  6
email  3.5
list management  2.5
design 3
website updates / landing pages 3.5
SEO 3

Total Hours Per Week: 57.5

*larger teams typically require a project manager

Now, this can get tricky if you don’t already have a marketing staff. It’s not as easy as simply hiring a marketing manager and ask them to work extra hard to get all this done in a week. It is very rare that you can find one person with all the skills to pull this off well.

Unless it’s contributing to 1-2 regular blog posts each month, we don’t recommend a business owner try to do portions of these tactics; they should be focused ON the business.

It is possible to find talented people skilled in multiple areas. If so, the most likely combined skills would be similar to those shown in the grouped highlighted areas.


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People

There are several options to build out a team from hiring full-time marketing staff, to outsourcing the work using freelancers, to using an agency to help fill any gaps. Below we’ll walk you through the pros, cons, and potential costs of each.

Staff

According to Glassdoor, the average salary of a marketing strategist is $65,000 and varies by location. Once you take into account the cost of benefits, vacation, payroll taxes, etc., the total cost to the business is anywhere from 1.5 times to 3 times the salary of the position.

Looking at the task breakout above, let’s assume you could hire 4 people and outsource design. Here is what it might look like.

 

Position Salary Salary + 1.5x
marketing strategist $65,000 $97,500
writer/researcher $55,000 $82,500
social media and email marketer $50,000 $75,000
web design and SEO specialist $60,000 $90,000
designer (as-needed over a year) $8,580  $8,580

 Annual Total:  $238,500  $353,580

 

For a typical marketing budget, we recommend investing about 7-9% of your annual revenue. Therefore, if your organization is pulling in about $4.5M in annual revenue it certainly might make sense to hire this staff or fill in the gaps in your existing team.

If you’re not currently seeing these revenue numbers, let’s look at other options.

Freelancer Costs

Of course, you can hire freelancers to help you develop your marketing strategy for anywhere from $50-150/hr, but keep in mind, you get what you pay for.

You pay a little more than you would typically pay someone on staff hourly, but you’re still saving money since you’re only paying for the work a freelancer or contractor is actually completing. Plus, you’re eliminating benefit costs and more than likely, you don’t have to pay for space or equipment (computer, desk, etc.). Here's what those freelancer costs might look like:

 

Freelancer Task Hours Per Week Annual Cost
ongoing strategy 3 $11,700
collecting and analyzing data 3.5 $13,650
project management* 5 $13,000
meetings, admin  3.5 $9,100
content research 3 $6,240
editing 3 $7,020
writing 15 $46,800
social media  6 $12,480
email 3.5 $10,010
list management 2.5 $7,150
design  3 $8,580
website updates / landing pages  3.5 $13,650
SEO 3 $11,700

Annual Total   $171,080

 *larger teams typically require a project manager

If you’re not doing any other marketing for your business (outbound efforts such as online ads, print, sales collateral, event marketing, etc.), this might be a strong option. Keep in mind though that if you outsource all these tasks to freelancers, someone will need to manage them and the work they deliver.

With freelancers, you run the risk of having to train them on your business over and over (and over) again since it can be difficult to always get the same freelancer to help deliver work consistently and on time. If you hire freelancers, we recommend you develop a guide to clarify messaging, your strategy, etc. so you don’t have to keep telling people the same thing over and over again. (We actually recommend you do this anyway for employees or anyone else as well).

Based on stories we hear time and again, we highly recommend not to look overseas for ‘cheap labor’ in order to carry out some of the most important work in your business. Over time it will end up costing you more in edits, potential breakdowns in communication, delays due to time zone differences, and lack of familiarity with culture or market.

Agency Fees

You might pay an agency anywhere between $5,000-$25,000 each month depending on your industry, goals, the complexity of your market, or even the agency’s niche.

Let’s look at a typical example of agency pricing, but keep in mind while there is a significant range depending on the agency you’re working with, you should never choose an agency based on price alone. Select an agency (or employee or freelancer, for that matter) based on service, knowledge, and results.

 

Agency Annual Cost
build the strategy (1x) $15,000
marketing campaigns (avg. 12-week cycles) $80,000 - 160,000

Annual Total $95,000 - 175,000

 

While some agencies consider themselves to be "full-service", you should be careful of agencies that started out as web designers (or any single marketing focus). Many smaller marketing agencies started out as web designer-, copywriter-, or graphic designer-turned-agency. While these agencies carry a lot of talent, they often aren’t fully trained in all other aspects of marketing.

For instance, while a web designer might be able to build a stunning new website, they may not have the marketing capabilities needed to align that website with your content strategy or buyer's journey, making it not-so-stunning for your site visitors. A well-rounded agency will have talented web designers on staff, working alongside talented inbound marketing strategists, researchers, designers, and analysts.

Marketing Technology and Analytics

It’s not news that technology is improving daily. In fact, with so many tools available today, deciding which tools to use in your business gets more difficult each day.

Despite the complexities of technology, it does make our lives easier. There are many tools available that allow small businesses to run more effectively, be more productive, and even save money.

There are literally thousands of marketing tools out there (and even more if your industry has its own tools). The most common tools required for small businesses to run successful marketing programs include:

  • Customer Relationship Management (CRM)
  • marketing automation platforms
  • email platforms
  • social media tools
  • website-related tools

It would take a book to list out even the most popular tools, individual pricing, pros and cons of each, and which works best for different businesses. If you have specific questions about which tools might work best for your business, give us a call. We're always happy to offer guidance on marketing systems and technology (free, no strings attached).

So instead, we’ll offer a high-level view of what you might expect to pay for technology today.

CRM

There are many options today that range from completely free like Zoho CRM or Freshsales (although often with limited contacts, capabilities, and integrations) to the very expensive (Salesforce can cost up to $300 per user, per month). HubSpot’s CRM is free and surprisingly offers a lot of functionality.

Marketing Automation Platforms

Some marketing automation platforms, like HubSpot, offer an all-in-one option that includes literally all of these tools in one platform. HubSpot’s pricing starts at $2,400 per year but, depending on the size of your business and goals, can increase to $31,000+ per year for enterprise customers. For larger businesses, this is still a good deal since all your tools are wrapped up in one platform.

There are other platforms available that are also very robust, however, they are strong in some areas, but don’t offer a true “all in one” platform. Marketo can cost between $14,000 annually for its basic tier, up to $140,000 annually. Pardot and Eloqua can cost between $12,000 and $120,000 annually.

Before even considering a marketing automation platform, it’s best to first list out the top features you require in a platform. There are so many choices today and each one with different features and costs that it can become overwhelming. If you’re struggling to decide what to do with your marketing, call an agency or a marketing consultant that can help you determine what’s best for your specific organization.

Email Platforms

There are so many email tools today ranging from free to “not too bad,” including:

  • MailChimp (ranging from $0-$2,400 annually)
  • Emma (ranging from $1,100-$8,700 annually)
  • Benchmark (ranging from $0-$4,500+ annually)
  • Constant Contact (ranging from $200-$3,500 annually)
  • HubSpot ($0-it’s included in its marketing platform)

Deciding on an email platform, like CRM and automation, depends on your business and marketing goals and your requirements for the tool. Before you begin looking at any tools, first determine what you “must” have so you can compare apples to apples.

And I’ll point out HubSpot (again) for email too; it has very robust email marketing capabilities included with its standard platform.

Social Media Tools

There are thousands of social media tools available today. Buffer put together a spreadsheet of top tools that details the pricing and functionality for each. Here are just a few of the most popular:

  • Buffer for scheduling and analyzing social posts ($0 - 4,800 annually)
  • HootSuite for scheduling, monitoring, and reporting ($0 - 6,000 annually)
  • SproutSocial for scheduling, monitoring, and creating beautiful reports ($1,200-3,000 annually/per user)
  • Meet Edgar for scheduling and recycling evergreen content ($600 annually)
  • Sendible for scheduling, monitoring, collaborating and analyzing ($1,200-6,000 annually)
  • HubSpot for scheduling, monitoring, connecting with leads and customers, and tracking ROI (included in its marketing platform). HubSpot currently only works with a limited number of social media channels.

Website-Related Tools

There are a multitude of website-related tools for everything from hosting, design and development, to security. Here we highlight some common services for you to consider:

  • The Wordpress website platform is always free. It’s a fantastic, easy-to-learn platform and it’s highly customizable. This is a favored platform for small businesses.
  • Website hosting - this is often confused with “having” a website. Hosting a website requires you actually placing your website on someone’s server so it’s live online. This costs money. People use companies like GoDaddy, Amazon Web Services, or through an agency like ours. Costs can range from $60-1,200 annually. Just remember that, as with most things, you get what you pay for.
  • Wordpress plugins - Whatever you want to do on your website, there is typically a plugin for it. While it’s best to limit the amount of plugins used on one site, it’s often easier to use a plugin versus hiring a developer to create custom code for your site. The costs can vary depending on your business needs; many plugins are free but many of the more complex plugins can cost between $50-$300 annually.
  • HubSpot - offers its own website platform and security and hosting costs are included in the $1,200 annual cost. HubSpot websites don’t use plugins since most of what you would need is already built into its features. However, with more robust features also comes a more complex system that requires you to have someone on staff (or hire an agency) to manage the website for you.
  • Web maintenance - Ideally you have someone monitoring your site all the time and taking care of issues as they pop up. However, it’s often difficult for small businesses to have someone on staff dedicated to the website. There are companies that monitor and maintain websites (like WP Sitecare with prices ranging from $950-12,000 annually) but often require a high-level of involvement from you or someone on your team. If you work with an agency, ask them if they offer this service. In most cases, if an agency is already familiar with your business and your website, they will be better suited to managing and maintaining your site and prices are often competitive with standard web care service companies.
  • Website security - this is a must regardless of which platform you use for your website. If you use HubSpot, security is a part of the platform. However, if you’re on Wordpress and you don’t have someone on staff that manages and maintains your website, consider installing a tool like Sucuri (ranging from $200-500 annually) or using a service like our Site Care program that includes security as well as ongoing maintenance and recovery (starting at $2,300 annually).
  • Development and design costs - regardless of which platform, tools, or services you use, if you aren’t technologically savvy or comfortable with learning how to run a website, you need to consider the costs of hiring a developer and/or a designer (these are two different things). Generally speaking, you can estimate hiring either at a cost of $100-200 per hour. Over time this can add up, depending on the complexities of your site, the number of tool integrations, and the size of your site.

What Does This Mean for Your Small Business?

These inbound marketing costs may not be what you expected but, you’re not alone. According to BrightTALK, a lack of resources (such as staff, funding, and time) remains the biggest obstacle to successful lead generation for 61% of B2B marketers.

Here are some basic guidelines to remember when getting started:

  • Plan to invest 7-9% of your annual revenue on marketing.
  • If you’re just getting started and you have a limited budget, you may want to rely on freelancers, but just be prepared to invest more of your own time to manage them and the process.
  • Look for solutions that match your company size. Small businesses typically work best with smaller agencies because they offer more personalized support and, more than likely, smaller fees.
  • Before researching anything, first determine the business goals and budget. Remember that marketing isn’t free and it’s a lot more than simply “doing” social media. However much you decide to invest in marketing, it should correlate to how much you want to get out of it.
  • If you’re contemplating whether or not you want to change your marketing strategy and are considering starting inbound your next fiscal year, consider the time required to ramp-up before you see results. What is the best time to start inbound marketing? Right now.

If you were expecting to hear a specific dollar amount that you should budget for your inbound marketing, I’m sorry to disappoint. As you can see by the length of this post, it’s not an easy answer. However, generally speaking, you can expect to spend between $100K at a minimum each year ranging up to $500K minimum for larger or more complex businesses.

So now that you have a better idea of what it might cost to do inbound marketing. Now you might want to ask yourself what it will cost if you don’t. For help 

Download-inbound-campaigns-for-small-teams-guide-here 

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