ROI Assumptions

Let's assume the worst case example, and that is that during the first 12 months of your Inbound Marketing efforts, your website will attract only 5,000 visitors via organic search (which are the highest quality visitors since they find you).

Per a 2007 research paper by Forrester, on average 2.9% of website visitors become buyers.

The realty is sales conversion rates differ widely by industry, but for purposes of our conservative ROI, let's go with 1.0%.

Cost of Customer Acquisition

If 1% of a modestly estimated 5,000 website visitors become customers you acquire 50 new customers during that 12 month period.

ROI Calculation, First 12 months

Some people use "lifetime customer value" in their ROI calculations. I use annual revenue from customer.

Some customers buy once during the year.

Some customers sign a subscription agreement where they make 12 payments.

ROI Calculation, Starting month 13

Starting in month 13 your monthly cost of Inbound Marketing drops to about a third of what it was and the rate of incoming leads typically does not. If the incoming lead flow does decrease, it may be necessary to increase the publishing rate but rarely is the year 2 expense as high as the year 1 expense.

That is one of the beautiful things about Inbound Marketing.

It helps to think of Inbound Marketing as overcoming inertia. In the same that it takes a lot of energy to get a train moving but much less energy to keep it moving, it's takes a lot of content to get a website to start generating quality leads, but less content to keep it generating quality leads.

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