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Mike Lieberman, CEO and Chief Revenue ScientistMon, Mar 7, 2016 8 min read

The Unknown Impact Of Underinvesting In Inbound Marketing

Invest Enough To Make Sure You’re Giving Inbound Marketing A Fighting Chance

Under Invested In Inbound MarketingSetting a budget for marketing investment has always been challenging, even for the savviest business leaders.

Almost no one knows how to connect business goals, like going from $10 million in revenue to $15 million in revenue in a single year, to an appropriate marketing budget. It’s not your fault. For years, knowing what money invested in marketing should be producing for your business has been a very gray area.

Marketing has always been an art. Get your name out there and people will buy your stuff. Nah, we all know today that marketing needs to be accountable for hard business results like revenue. Here’s some good news. Marketing investments can be held accountable for results if you practice inbound marketing.

However, the budgeting process is still holding many businesses back from achieving success and from realizing all the benefits of inbound.

Here’s a story that might resonate with most of you.

Last Year’s Marketing Budget

Most people look at what they spent last year even if they underinvested, which most of you probably did. So, if you had $5,000 a month for marketing and you have more aggressive goals or you want to put more into marketing, you simply up the budget to, say, $7,500.

Here comes your new inbound marketing agency. If they’re good, they’re evaluating your business goals and matching your required investment in marketing directly to your business goals, and telling you that if you want to go from $10 million to $15 million in revenue you need to spend $20,000 a month on marketing.

To go from $833,000 a month in revenue (a $10 million-a-year monthly run rate) to $1,250,000 a month in revenue (a $15 million-a-year monthly run rate), you need to spend $20,000 a month. Doesn’t that sound reasonable? Spend $20,000 and get $400,000-plus in return. But you only budgeted $5,000.

Please Reduce The Program

Now, instead of increasing the budget to something that aligns with your business goals OR reducing your business goals to something that aligns with your budget, you ask the agency to lower their estimate. This causes them (again, if they know what they’re doing) to reduce the components of your program and the expected results.

But do you really hear them when they say, “by reducing the budget you’re going to get fewer visitors to your website, fewer leads, fewer sales opportunities and fewer new customers”? I hope so, but experience has proven that most of the time, the answer is “no.”

By reducing the budget you’ve limited the opportunity for the agency to shine and for the program to work. You’ve also pushed back the timing on the program. Less expensive programs always take longer to work.

Trust The Experts

So, instead of trusting the company you hired to help you get leads, you told them to reduce their level of work to meet some arbitrary budget number. In essence, you're asking them to deliver with one hand tied behind their back. Now, fast-forward six months into the program and you expected things to be up and running, the program to be kicking a** and the leads to be coming in.

Long forgotten are the conversations about budget, performance and expectations. Now you’re questioning inbound marketing and probably the agency too. But wait, it gets much worse.

You Give Up On Inbound Marketing

Now that revenue is lagging and the program is taking longer than you expected and the results are slower than you expected, you panic. You fire your agency, stop everything and start thinking about your options.

Only one problem — you don’t have any options. Are you considering going back to cold-calling and trade shows? Do you want to send out letters or postcards? What about advertising? You always have print ads you could buy, right? The only way any of these interruptive, old-school tactics make any sense is if you believe people are going to stop screening their incoming calls, start reading their print mail or start attending trade shows in droves. Is that what you believe?

Now You're Really Stuck

You don’t know what to do. No inbound, no traditional stuff, no anything. You stop all marketing, thinking you’ll save the money since revenue is below expectations. This must sound familiar to most of you. I’ve seen it so many times, it’s not hard for me to tell you this story.

There Can Be A Happy Ending

Having implemented inbound marketing and inbound sales machines for hundreds of businesses has provided us with a ton of data points on clients who stick with inbound vs. clients who bail out too early. The data is overwhelming. Clients who stick it out and either push through or invest properly have achieved monumental business growth. They’ve sold their businesses for millions, they’ve become top franchises, they’ve expanded their businesses, they’ve been Inc. 500/5000 and more.

The ones who stop their programs because they can’t be patient, don’t trust the methodology or have underinvested end up back at square one, unsure about how to proceed and with businesses that are stagnant or declining. Whether you thrive, or simply survive, is 100% up to you. CEOs, VPs of marketing, VPs of sales and business owners hold the key. Invest properly and grow, or underinvest and run the risk of setting your business back by years, if not more.

Start Today Tip – Inbound is hard work, but figuring out how much you need to invest to hit your business goals is easy. Once you know how each of the many inbound tactics impact marketing performance, making the connection to financial investment is simple. We’ve always believed that marketing should be goal-oriented (connected to your goals) and 100% quantitative. Inbound gives us all the tools to deliver on both pillars of our Reality Marketing foundation. Make sure you take this first step before you invest anything in marketing or start down your journey with inbound.

Square 2 Marketing – Inbound Results Start With ME!


Mike Lieberman, CEO and Chief Revenue Scientist

Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.