Inbound marketing is growing in importance as traditional outbound marketing venues, such as newspapers, network TV, and radio continue to experience dilution in the number of readers, viewers and listeners. The internet has dispersed the attention of once-captive audiences, with Spotify gaining market share against radio and YouTube and Hulu drawing viewers away from traditional programing. Even those that still watch TV are doing so using technology like Tivo, skipping all of those creatively put together and expensive commercials entirely.

With that being said, what are the actual stats on inbound marketing ROI, and how do you even quantify it? Outbound is easy...number of ad dollars spent divided by generated sales dollars or leads. With inbound marketing, the numbers are not always so transparent, as all you might immediately get from an inbound marketing campaign is a bunch of captured email addresses, followers, and “Likes.”

However, if you are measuring the right metrics, calculating inbound marketing ROI is fairly straightforward:

1. The first element of inbound ROI is website visitors - the number of people coming to your website on a monthly basis.  Website visitors represent the top of the sales funnel.  The first element of your ROI strategy is to draw more visitors to your site.

2. The second element of inbound ROI is lead conversions - the number of website visitors that convert to leads by providing an e-mail address in return for a valuable piece of content that you offer.  Note that if you can increase the percentage of website visitors that convert to leads, you don't necessarily need more website visitors to hit your ROI goals.

3. The third element of inbound ROI is sales conversions - the number of leads that eventually buy your products and services.  As is the case with lead conversions, increasing the percentage of leads that buy from you will increase ROI without increasing website traffic.

Accordingly, those three metrics are the key factors you want to evaluate to increase your marketing ROI.  Simply put, you should do more of the activities that produce high conversion ratios and less of those that produce low conversion ratios.

There are some hard marketplace figures out there. According to a Hubspot survey of businesses that use a mix of inbound and outbound methods, inbound leads cost less than 60% than outbound equivalents.  The most cost-effective inbound channels according to the survey are blogs and social media, such as Facebook, Twitter, and LinkedIn. This should give you a good idea of the value of these inbound techniques and that the buzz about them among marketers is warranted.  

Once you have established these channels, some of the simpler metrics you can use to determine the inbound marketing ROI for your business are:

• Subscribers/followers. These are future potential customers, and the more of them that you have which are actually engaged with your brand by retweeting you, commenting, and sharing your content, the better. Engagement could actually be tracked separately from the subscriber/follower number—as an example, Facebook makes it easy with their “People Talking About This” metric available on every Fan Page. You could set up a spreadsheet to track comments and retweets if you wanted to track things on a very granular level.

• Page Rank. Rising rank from Google means better results in search engines when people search for your keywords. This means more potential visitors.

• Website Visits. Increasing numbers of hits from social networks and blogs are a good indication of how well your inbound marketing is working. If you do not have an effective way to track visitors and where they come from, Statcounter is an excellent free tool as is Google Analytics.

• Lead Conversions.  This metric measures how many website visitors are progressing down the sales funnel as they register to receive content offers like eBooks, webinars and the like.

• Revenue. Divide your revenue by stats such as followers, page hits, e-book downloads, etc. to determine the value in real dollars of each lead.

It takes some time to truly build relationships with visitors using inbound marketing. The key is to release enough content to keep the interest up, and to interact with your audience consistently. These actions many not reflect in your inbound marketing ROI stats immediately, but as many marketers and brand managers are realizing, it pays off in the long run to keep these actions in place in order to build a customer base that doesn’t go away when your traditional outbound marketing ads stop running.