ROI

What to Expect with Human Marketing - Inbound Marketing Agency Pricing & ROI

[fa icon="calendar"] 5/27/16 6:27 PM / by Joel Brda

Joel Brda

Through our team’s combined experience leading marketing and sales teams at B2B tech companies, working behind the scenes at marketing agencies and consulting for small businesses, we’ve found that we have the highest success with certain types of clients. We've provided you this inbound marketing agency pricing and ROI breakdown to make your search for the right marketing agency easier.

Sure, million-dollar marketing budgets excite us, but those accounts aren’t our bread and butter. Monthly budgets of $1,000 also don’t give us the reach to produce visible results quickly.

Rather than taking on every company we meet, our agency prefers to set up the partnership for success by communicating our strengths and giving prospects the chance to find the perfect agency fit.

Here are some insights into who we work best with and what you can expect from your Human Marketing team: 

What types of clients does Human Marketing work best with?

  • B2B & B2C companies ranging from $2m - $50m in revenue: We’ve found that companies in this range understand the value of inbound marketing and are financially willing (and able) to invest in channels that move the needle.
  • Established businesses that have a proven product or service and revenue to show for it: We live and work by the motto of enjoying life and helping others and get excited about companies and projects that set out to do the same.

 What can I expect in my return on investment (ROI)?

ROI calculations can look completely different — even when pulling from the same metrics. So it’s important to know what you’re looking at. Some agencies start with total revenue when gauging ROI, which could skew the real impact of your marketing efforts. We use new revenue for a particular period (rather than total revenue) as the benchmark for ROI to provide you with more reliable data.

  • Here’s the formula we use: ROI = “(New Revenue – Investment) / Investment”

While every organization is different, here are some ROI benchmarks we’ve found with our clients and provide as a general starting point. As always, there are outliers that can perform well above or below these benchmarks.

  • New Customer ROI = 1x-3x (or 100% to 300%), meaning spending $100 on a new customer makes you $100 or spending $100 results in $300.
  • New Customer ROI + Lifetime Value (LTV) = 3x or 300%. While I’ve heard 10x and other high numbers as standards, this isn’t a realistic number on a consistent basis across all channels.

 How much do I have to invest?

 Your initial and ongoing monthly investment depends on a few factors:

  • How fast do you want to grow?
  • What is your appetite for investment and how confident are you in your product or service?
  • What is your goal? To gain market share, profit or something else?

With that said, you can use the above models as starting guidelines for setting your investment:

New Customer 1.5x ROI Example:

  • Goal: Acquire $100,000 in net new business from inbound marketing
  • Budget: To see a 1.5x return, you would need a yearly marketing budget of $40,000 ($3,300/month)
  • Expected Net Profit: Say your cost (COGS) is 50% (or $50,000). Your net profit would be $10,000 over a year.
New Customer 3x ROI With LTV Example:
  • Goal: Acquire $200,000 in net new business from inbound including customer lifetime value (over 2 years, for instance.)
  • Budget: A 3x return would require a yearly marketing budget of $50,000 ($4,200/month).
  • Expected Net Profit: Say your cost is 50% (or $100,000). Your net profit would be $50,000

 

As a baseline, we work with clients whose financial models allow them to invest a minimum of $5,000/month. We pride ourselves in working closely with a few number of clients and aim to make the greatest impact possible on their bottom lines. We’ve found that becomes increasingly difficult when companies have budgets under the $5,000 mark.

 

We’d love to learn about your inbound marketing needs. Get in touch with us today!

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Topics: Inbound Marketing ROI, Marketing Agency Pricing, Inbound Marketing

Joel Brda