Inbound is more than just a marketing strategy; Inbound is a philosophy that is engrained into your company's DNA. However, one of the toughest challenges Marketing can face is getting buy-in from the top.
Inbound takes time, resources and expertise to implement correctly. How do you get your C-Suite to not only sign off on the time and money required but also emotionally and professionally invest in Inbound?
Out of all the C-Suite, it is often hardest to convince the Chief Finance Officer (CFO). It can seem that the finance and the marketing departments exist in two entirely different worlds; finance views marketing as a monthly expense while marketing view finance as a money source.
Here are some ideas on how to communicate the value of inbound to your CFO.
Speak their language
Although everyone in the organisation, including your CFO, is heading towards the same overall business goals the route they are taking is very different to you. The phrase “Walk a mile in their shoes” applies here.
Take time to meet — early morning coffee, regularly scheduled lunches, even drinks after work. Personal relationships matter when challenges emerge (Harvard Business Review). In doing this, you will find out what is important to them, and they will be able to relate better to what you’re doing in marketing, how that relates to company performance, and why they should care.
You and your CFO may share similar pressures, but their focus is on the profit and growth objectives of the company; they need to be able to see a Return on Investment (ROI) from the company’s investments.
To explain the value of inbound to your CFO use common financial terms. The goal is to get your CFO to see inbound as an investment, not an expense.
Demonstrate the ROI of Inbound
“I know that half the money I spend on advertising is wasted. My only problem is that I don’t know which half.” (IKTHTMISOAIW)
This quote became the basis of one of the world’s most widely held beliefs about advertising. Who originally said it has also been widely debated – it is attributed to William Hesketh Lever - founder of Unilever, John Wanamaker - department-store magnate, and even Henry Ford.
Jeremy Bullmore suggests that those who continue to quote it probably include CFOs engaged in hand-to-hand combat with their CMOs (Chief Marketing Officers) over next year’s marketing budget.
Traditional marketing methods such as print advertising and direct mail do make it difficult to calculate the ROI, especially in B2B sectors with long sales cycles; which have possibly fuelled the IKTHTMISOAIW belief over the years.
However, the evidence that inbound delivers results is clear. The HubSpot State of Inbound 2016 report showed:
- Adopting an inbound marketing strategy doubles average website conversion rates, from 6% to 12%.
- Marketers who have prioritised blogging are 13x more likely to enjoy positive ROI.
- 82% of marketers who blog see positive ROI for their inbound marketing.
When explaining inbound to your CFO, Inbound content become inbound assets. Unlike most forms of paid marketing, content marketing has a cumulative and compounding return on investment as it continues to attract traffic from SEO and social channels long after it has been published, without any additional investment required (Tomasz Tunguz).
A platform such as HubSpot gives you hard data which allows you to continuously measure, analyse, and improve your marketing; and ultimately demonstrate how marketing adds value to the company’s bottom line.
Two metrics your CFO will like are: Cost Per Lead (CPL) and customer acquisition cost (CAC)
Cost per lead
CPL is quite simple – how much it costs to get one lead. To calculate CPL, divide your marketing cost by the total leads generated. CPL enables you to prove the cost-effectiveness of Inbound.
The more granular you get (e.g. content, landing page, CTA, campaign, etc.), the faster you can determine which ones are most effective. Tracking CPL also helps you continuously improve for greater efficiency.
CPL can also help isolate which assets are better at converting leads at the different stages of the marketing funnel. (HubSpot)
Customer Acquisition Cost
CAC is total sales and marketing cost divided by the number of customers acquired, over a specified period (a month, quarter, or year). Once you begin to implement inbound, your CAC will begin to decrease because inbound brings in more qualified leads at a lower cost than outbound methods.
Inbound v PPC
If you have previously used PPC (pay-per-click) advertising you may also struggle to convince your CFO of the value of Inbound. PPC offers an immediate ROI - You put your money in and you immediately get leads out but only if you keep buying PPC. (HubSpot)
PPC is the equivalent of renting space (on someone else’s website) which you are continually competing for. As with any rented assets it has no long-term value. Whereas inbound is a lead factory that you build and own yourself.
It might take longer to generate the same number of leads as with PPC, but with inbound your content assets will continue to grow in value – bringing you traffic and leads long after they are published.
By using these ideas you can prove the value of inbound and ensure as a marketer you never have a CFO quote IKTHTMISOAIW to you ever again.