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Mike Lieberman, CEO and Chief Revenue ScientistThu, Mar 3, 2016 8 min read

What's The Impact On Revenue From Inbound Marketing And Inbound Sales?

If Inbound Marketing Doesn't Generate Leads And Revenue, Why Do It?

Impact of Inbound Marketing and Inbound SalesThe reality we’ve found from working with hundreds of clients over the past 10 years is that leads are not enough to impact revenue. Salespeople are notoriously bad at picking up inbound leads, as opposed to leads they’ve created on their own. This is where inbound sales plays a critical role.

Once you couple inbound marketing with inbound sales you create a seamless experience for your prospects that has the potential to differentiate your business from your competitors. Once you deliver a remarkable and educational experience to your prospects you see an immediate lift in conversions, sales-qualified leads, sales opportunities and new customers.

The key question is how to measure the quantitative impact. Or, in simpler terms, what level of revenue growth should we expect if we implement both inbound marketing and inbound sales?

First, I feel like I need a disclaimer that every client, every company and every individual team performs a little differently. What I have here are general expectations and not forecasts, predictions, promises or guarantees.

Shorter Sales Cycles

The first improvement we see is that sales cycles shorten. Typically, if you have a 45-day sales cycle, redesigning your sales process, infusing content into your sales process and making your sales process a guided process should help to shave about 15 days off the process. So, what had taken 45 days would now take 30 days.

We’ve also learned the longer your sales process is, the easier it is to shorten. So we’re clear, if you have a 10-day sales cycle, our ability to use inbound tactics to shorten that might only impact it by a day or two. If you have a six-month sales cycle, the impact is probably going to be more significant, perhaps giving us the ability to reduce that by 30 days and take it from six months to five months.

Increased Close Rates

An increased close rate is one of the most significant improvements to occur. This obviously has the potential to drive dramatic improvements in revenue, but inbound also provides the opportunity to have your sales team working on much more qualified opportunities. In essence, your team might be working on fewer opportunities, but more qualified opportunities that have a higher chance of closing for higher than average revenue.

Increased Sales Opportunities

While inbound definitely has a direct impact on the increase in overall leads, inbound sales techniques help you to effectively convert the best leads into sales opportunities. While having more leads doesn’t always equal more sales opportunities, in this case coupling these two inbound methodologies delivers.

More Referrals Earlier In The Customer Life Cycle

Companies with inbound marketing and inbound sales programs often find that prospects provide referrals even before the sales process has completed, and then they provide referrals much earlier in their life cycle with our clients. So after just a few weeks of working with a company executing inbound they’re happy to refer them, share their experiences and help bring in new customers.

Increased Average Revenue Per New Client

We hear this comment from clients very often: “Our customers only buy one or two products from us but we have six or seven that they should be buying.” This is where a more inbound process and ongoing marketing helps to nurture current clients to increase new revenue from new clients while also impacting revenue from current clients.

A guided, structured and designed sales process means you’re asking ALL the questions you should be asking prospects before you jump to proposals, pricing or contacts. This detailed diagnostic phase of the sales process uncovers every opportunity for your company to help your prospect — right from day one. Whether they buy everything from you or not, at least they know what you do, how you do it and that you have solutions to issues they're dealing with.

This also gives you the ability to collaborate with prospects and co-create their solution. This is critical to helping them feel safe, feel like you heard them and feel like your recommendations are “just for them.” This means people typically spend more and purchase more comprehensive solutions. This can dramatically impact revenue in a very short time frame. Basically, you could realize a 10% increase in revenue over the course of all new customers for the rest of the year.

So, when you add up all of these areas for improvement and factor in higher close rates, shorter sales cycles, higher average revenue from new clients and more referrals, here’s how the incremental improvements add up.

Pre-Inbound Scenario

You’re getting 20 leads a month and five of them are sales opportunities, of which you typically close two of them for $10,000 a month. If you project this for a full year, you’re looking at $20,000 a month for 12 months, or $240,000 in revenue from new customers.

Active Inbound Scenario

Inbound has increased your lead flow from 20 to 30 leads a month, and instead of 20% being sales opportunities 30% are now sales opportunities, so now you’re seeing 10 sales opportunities. Instead of closing 40%, we’ve helped you increase to 50%, so post-inbound you’re adding five new customers per month. Because your process is more collaborative you’ve been able to increase you average revenue per new customer from $10,000 to $12,000, a 20% increase. Add all of this up and you’re looking at $60,000 in new revenue per month, and over the course of 12 months that’s $720,000 a year.

When you add up all of these smallish improvements, you’ve increased revenue from new clients from $20,000 a month to $60,000 a month — a 200% increase. That’s dramatic. It doesn't come without hard work and challenges, but it's the kind of lift and impact that should get the attention of every CEO, CFO, COO and business owner.

Start Today Tip – If you’re thinking about tackling this yourself, congrats! The first step is to map your current sales process and then create a new inbound, collaborative, educational and more diagnostic sales process. This should include steps that educate, steps that help your team diagnose, and deliberate touch points that get your prospects to know, like and trust your company. The better you are at getting your prospects to feel safe, the more they’ll spend and the faster they’ll close. This is the secret to achieving some of the revenue projections outlined above.

Square 2 Marketing – Inbound Results Start With ME!

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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.

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