Inbound vs Outbound Marketing


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As recently as a few years ago, online marketing meant one thing: search marketing. And there were only two flavors of search marketing: search engine marketing (SEO) or paid search (PPC). Today, there are seven distinct online channels that can be leveraged as part of your overall marketing mix: content marketing, social marketing, ad retargeting, paid search, product feeds, affiliate marketing, and e-mail marketing. More channels are appearing every year as companies continue to innovate the online experience. How can a marketer predict which channels will work for them and determine how best to leverage those channels?

To answer this question, take a step away from the details and consider how you would have engaged your customers a hundred years ago. In 1898, advertising pioneer St. Elmo Lewis developed a four-step model for writing effective marketing copy called AIDA. The name is an acronym that describes four steps to convincing someone to buy from you. First, you must get their Attention (A), then build their Interest (I), create Desire (D), and finally, you must inspire Action (A). More than a century later, this model is still useful for demonstrating how the dialog with your customer changes from first introduction to the eventual sales event and how your messaging needs to be different depending on what stage of the process you’re engaging with a potential customer.

Consider how this model applies to your sales conversion funnel and how you would engage customers differently at the four stages of the funnel. Most businesses naturally align with either a “high funnel” or “low funnel” marketing strategy, not both. Is your business one that is more focused on qualification and brand building? Or is your product or service a known commodity for which you’re merely competing on price and convenience? The answer to this question is where you must start to define your online marketing strategy.

In my recent book The Smarter Startup, I introduced the following two marketing models that reflect this difference in high funnel versus low funnel engagement:

Inbound Marketing

If you sell custom services or high-end products, you must expect that your customer is going to do some research to qualify you before they select you as their provider. They may look for reviews on Yelp, ask colleagues for references, or spend time researching online before they decide whom they will contact. The window of opportunity with these customers is high in the conversion funnel, and so you must focus on capturing their attention (A) and interest (I).

The online marketing channels that lend themselves best to engaging this type of customer will reinforce your reputation and demonstrate knowledge and quality. Content marketing lends itself particularly well here. Consider writing articles for popular online magazines and contribute to online conversations where they are occurring. Think about how to enable brand advocates to share your message with their own social and professional networks via social platforms like LinkedIn and Twitter.

Because this type of conversion funnel can last weeks or months, it is critical to stay in touch with your customers to keep your brand top of mind. If you’re engaging them high in the funnel, they’re likely not ready for a purchase yet, but it would be reasonable to request an email address or social follow. This will give you the opportunity to continue sharing your knowledge and commitment to quality as they proceed through their decision process.

You might also consider retargeting ads, which track a visitor’s movement online and can continue to show your ad wherever they go online after they’ve visited your website or otherwise engaged with your online content. These ads are available through many ad network providers, including Google AdWords, and are a great way to stay top of mind.

Outbound Marketing

Outbound Marketing focuses on the lower funnel prerogatives of desire (D) and action (A). Rather than building a brand that demonstrates quality and knowledge, you would instead focus on optimizing the transaction event, driving traffic, and optimizing conversion rates. Your messaging should typically reflect this with time sensitive offers and prices discounts. For the outbound marketer, there is little value in establishing expertise or commitment to quality, since the product is often a known commodity. The goals of outbound marketing thus are to get in front of as many customers as possible and to convert those customers before they leave their website.

The online channels that work best for online marketing are the ones that serve these low funnel prerogatives most efficiently. Paid search (PPC) for example is excellent at pairing specific advertisers with customers searching for something very specific; a signal they may be nearing the bottom of the funnel. Product feeds and affiliate marketing programs, meanwhile, are two vehicles that enable the outbound marketer to get their products into popular product comparison directories, where customers can easily compare product features, and provider prices and shipping.

E-mail marketing can also be useful as a follow-up mechanism, as it is with inbound marketing, though the goal is different and its use less critical. Rather than nurturing a lead by helping them through a long and complex discovery process, the outbound market merely re-markets existing customers with special offers in order to hopefully win additional business.

The bottom line? It is important recognize the purpose of each of the online marketing channels, how it is consumed by the public, and how each one may be vary in efficacy for the message you are trying to communicate. For a channel to be effective, you must pair it with appropriate messaging, and for that message to be well received, it must reflect the appropriate stage in the conversion funnel your customer is currently in.

To demonstrate this mismatch, consider what would happen if you try to intercept someone low in the funnel who is researching graduate schools by offering them a 20 percent discount if they enroll today. Or conversely, what will happen if you are an e-commerce website that sells batteries and you spend the majority of your budget writing content that positions you as a battery expert or worse, you begin flooding Twitter and LinkedIn with battery discount codes. Chances are good that St. Elmo Lewis would not approve.

Ideas for Effective Analytics Strategy

Many websites have Google Analytics setup, but the majority are not making the most use of these resources. Often, analytics is an afterthought or is dismissed as merely a way of tracking the number of visitors on a given day. But there is so much more actionable data to be had with a little time and forethought.

In this post, I am going to talk a bit about analytics strategy and then provide examples of actionable data that can be tracked and how it might be useful.



At a very high level, start by considering the goals of your site and how those map to your analytics tracking. Most eCommerce and Software as a Service (SaaS) businesses, for example, want to generate a purchase transaction. Services businesses such as consultancies may be looking to generate higher funnel leads that will eventually lead to contract for service offline, at a later time. Still others, such as news content sites, might define a goal as keeping a user on the site for a minimum amount of time or having them return a specified number of times within a month. Whatever your goals are, it is imperative to define those clearly – ideally before you even create your website, but certainly before setting up an analytics campaign.

Each of the above goals is possible to track using custom events, goals, events, and funnel tracking in Google Analytics. There’s even a way to setup custom widgets on the dashboard and have reports and alerts emailed to you on a schedule as well, making it easier than ever to access highly meaningful performance metrics. There really is no excuse to still be using a tool as powerful as Google Analytics to merely track your page views day-to-day.

Define Your Goals

What should we be tracking? Let’s take an eCommerce site as an example, since it has the most sophisticated and well-defined conversion funnel, and we’ll demonstrate the Key Performance Indicators (KPIs) at each major step of the funnel that we might consider tracking. This should give a good idea of what’s possible and get the creative juices flowing a bit. There are three major steps to the typical eCommerce funnel with an optional fourth step. Let’s walk through each one:

i. Acquisition

We start by looking at how traffic was acquired. How were users sent to your website and from where? Although you may never attain 100% visibility, you’d be surprised just how much visibility you can achieve. You probably already know this through the standard analytics reports: that you can see keywords that were searched and on which search engine. Google also makes it very easy to integrate AdWords data to see exactly which AdWords campaigns are generating traffic and which are converting. Google also owns Feedburner, which provides yet another trackable channel for which you can directly attribute traffic.

Tagging is possible for anything outside of the Google-sphere, making it possible to add (utm) tags to the querystring of any URL you embed into an email campaign, social campaign, or banner marketing campaign. For many people, that’s the point where the light really goes on, realizing that you can tag and thus achieve almost complete visibility of traffic sourcing, and factor all of this into your integrated analytics campaigns.

An example of using UTM tags to track external click events:×250-banner&utm_campaign=myproduct

With all of these tactical tracking opportunities in mind, imagine the possibilities. Here are just a few examples of valuable KPI data points you might consider tracking as part of acquisition:

  • Organic Search (SEO)
  • Paid Search Marketing (SEM)
  • Social Campaigns
  • Banner Campaigns
  • Links from External Sites
  • Links from Online Videos
  • Email Recipients
  • RSS Subscribers
ii. Engagement

Once you’ve got the attention of your users, are you effectively driving that traffic toward your funnel or toward micro-conversion events that help to keep them engaged? Even if the visitor does not purchase something today, it can still be extremely useful to capture an email address, get them to subscribe to an RSS feed, or any number of other activities that will keep the communication channels open and continue to educate and qualify them in preparation for a later purchase. This is particularly true of larger purchases or services, which require longer time for transactions to mature.

To begin thinking of KPI data points in the engagement segment of the funnel, consider what sort of user activities you could be implementing and the corresponding micro-conversion goals you could be setting. This may also help you realize that you could be doing more to engage your users. Here are a few examples of good engagement goals to track:

  • Account signup
  • Email signup
  • RSS subscription
  • Saving product to wishlists
  • Adding item(s) to cart
  • Contributing product ratings or reviews
  • Watching video
  • Content interactions (e.g. photo zoom, faceted search attributes, etc.)
iii. Conversion

You’ve made it from acquiring to engaging, and now you’re finally converting that prospect into a paying customer. This is the point at which you’re finally able to attribute cost and value to all of your efforts and begin making some decisions.

If you’re spending money on paid search campaigns, you can see the precise value of each ad campaign, if you’ve integrated conversion tracking. You’ll also be able to see percentage of conversions for other non-integrated channels such as SEO, social, and banner re-targeting. Plus, other details such as average order value and average time to complete a purchase, and you can segment those macro statics by channel to derive insights such as paid search converts with better velocity than social.

The KPIs to consider tracking at this funnel step are:

  • Return on ad spend (ROAS)
  • Return on investment (SEO, Social)
  • Revenue
  • Average order value
  • Average time to complete order
  • Average visits before conversion

* Consider segmenting all of these KPIs by ad channel

iv. Loyalty

All of the above analysis can be very valuable, but is a bit myopic if take in isolation, particularly if you have return visitors or a more sophisticated sales and marketing operation that involves multiple touches prior to conversion.

Consider the more complex scenario of a prospect who visits your site, then sees retargeted banners on other sites (reminding them of you), so they sign up for your newsletter and eventually convert into a customer. And what if they come back a second or third time thereafter and purchase again. How do you attribute the sales? Does it all get attributed back to the ‘first touch’ interaction with one of your ads?

The new version of Google Analytics (v5) introduces the idea of a multi-channel funnel, which helps to address this issue. With a series of new reports, you can finally see which touch triggered the transaction, but you can also see the path and which other touch points may have assisted with that transaction. This can go a long way toward helping to understand the less tangible value of the early-stage-funnel ‘assist’ campaigns. For example, the social channel has notoriously low direct conversion attribution… But with multi-channel attribution, you can finally begin to see its role in setting up other activities later down the funnel to trigger a transaction.


Putting it all together

Hopefully, you are seeing the sort of user behavior and ad campaign performance insights you can mine from Google Analytics, if you take the time to define a strategy and properly implement the tracking and reporting. And that really is the key take away: analytics is a powerful tool that will provide substantial actionable data and enable you to make much smarter marketing budget decisions; but it requires clarity for your goals and how you drive traffic and engage your users. Without that clarity, you do not have a road map to setup a meaningful analytics campaign. Clarity and discipline is where many businesses get stuck and why so few practice meaningful analytics, outside of the major enterprise. But if you have clarity around your traffic generation and engagement activities and goals, you can generate highly informative and actionable data to super charge your marketing efforts, and that is a real competitive advantage.

Article originally published at SEOMoz:
Actionable Ideas For an Effective Analytics Strategy


The Need for Development Process

Many smaller and non-technical businesses are not familiar with web development process and thus may not fully appreciate the need for it.  Many times, the development team is pushed to override process either because it appears wasteful, interferes with a more organic process, or because there are looming deadlines that conflict.  While this may facilitate short-term goals, it is rarely beneficial in the long term.  The goal of this article is to describe the challenges that face the development team without process, the longer-term consequences, and ultimately to provide a road map to a lightweight process that may work well for a small business or non-technical business.

The Challenges:

Organization – Without process in place, most small and non-technical businesses will act as a pitcher and expect the developer to be the catcher.  Meaning ideas are thrown at the developer for implementation, and the developer must pick up these changes and respond to them. Sometimes these emails are coming from different people within the organization, some of whom aren’t even authorized to request changes.  Often, most one of these requests are the top priority and all need to be completed today, regardless of what’s involved to complete the task. This leaves the development team with no ability to manage their schedule, no opportunity to set expectations for how long a request should take, and no ability to truly manage priority for the tasks. You can see how this can get complicated really fast.  It becomes very easy in an environment like this to miss incoming tasks, not prioritize effectively, and ultimately not manage productive time well.

Team Impact – Aside from the organizational impacts mentioned above, consider what happens to the focus and emotional state of a developer responding to this environment.  They begin to get confused, stressed, and may begin to feel pressure to get things done.  In a more prideful developer, this will lead to ‘grumpy’ interactions with others on the team, as they are going into lockdown mode, trying to get things done the ‘right way’, and ‘despite the team’. On the other hand are developers who respond to the pressures to get everything done quickly, start to stress out, speed up and take short cuts, which increase the risks of making mistakes and risk of secondary ‘regression’ bugs popping up in existing code.  Ultimately management and/or the team around the developer will get frustrated regardless which of these two paths is chosen.  Who is happy here?

Quality Impact – At a very fundamental level, developers are creating a system. They take the business rules defined by the business, translate these into logical statements and create order out of the collection of requirements.  That is how things *should* be working anyway.  Consider what happens when a series of unrelated business requirements becomes a barrage of piecemeal emails, all of which have urgency attached to them.  The path of least resistance for the developer at that point is simply to comply with each request as asked but unfortunately that means any attention to maintaining architecture and system design is lost.  Rather than writing (and documenting) meaningful modules that interoperate with the system in a reasonable and predictable way, the features are just being added in the quickest way possible and with no documentation to explain the ad hoc logic that is no longer consistent with the underlying system to which it was applied.

The result is code that is increasingly difficult to maintain, understand, and develop against without risk of causing new errors.  So even if the developer succeeds in responding to the ad hoc requests, in the long term he will be blamed either when a new developer one day arrives and talks about how bad the system is coded, or when the team and management grow tired of all of the bugs later in the incoherent system that walked away from or didn’t implement a reasonable system design.  Its a slippery slope that only the more ‘grumpy’ developers can avoid but then these developers are scorned in the short-term for being difficult to work with, and unresponsive to the business priorities.  Who wins in this environment?

The Solution:

The only reasonable solution to this problem, is to take a rational approach to development – process! For businesses who are resistant to process, iterative methodology provides a much more lightweight approach and allow developers to be more responsive and agile (pun intended) to the business than more traditional waterfall methodology.  Using an iterative method, the team will begin to work within a structured iterative schedule, typically 1-4 weeks in length.  For example, assuming the iteration is one week in length, a design session happens on Monday, development occurs Tuesday through Thursday, user testing occurs on Friday, and development occurs Friday evening, during low traffic hours; the same process is repeated every week.

During the prior week, the business stakeholders have been compiling a prioritized wish list of features and bug fixes they want to complete the following week.  Then, at following Monday’s design session, the team meets with the developer(s) to discuss the features to include for the week.  The developer(s) help determine which of these priority items will fit into the week’s time box. The developer also works with the team and the growing task list, to identify functionally themed items that should be grouped together either as an iteration or a special project.  This effort gives the developer an opportunity to ensure he has enough time to develop things properly, and to develop features with awareness of other coming items that may influence his design for the new modules.  Finally, the list is decided and the business stakeholders compile a final iteration document, that outlines the requirements decide upon for that iteration.  The developer would take this document and work on the new features Tuesday through Thursday of that week.

On Friday, it is time for the team to begin testing. The developer will have completed “unit testing” and will have checked the critical workflows of the new features, but ultimately the developer is too busy and lacks the objectivity to be accountable for validating his own work.  Thus, it is up to the business stakeholders to perform “user acceptance testing” (UAT).  During UAT, the stakeholders will validate functionality, using the same iteration document that the developer coded against.  This provides a natural checklist to ensure all was accounted for.  Additionally, stakeholders should have a “regression checklist” that accounts for all critical workflows in the website or software application, to ensure nothing critical is broken by the new features.  Any errors discovered are returned to the development team for repair, and a mini iterative loop occurs for the rest of the day, either until a satisfactory new version of the software is ready for deployment, or until the deployment is called off for that week, due to too many complications, in which case the iteration extends to the following week.

If the “build” receives the greenlight for deployment, this needs to occur at the same scheduled time each week, preferably at off hours.  This ensures that any deployment errors that occur, happen at convenient times when traffic is low, and the consistent scheduling helps the developer to follow proper process such as backing up prior to deployment, identifying files to deploy and creating a checklist if needed, which helps reduce errors and increase response time for roll back if something goes wrong. Again, much better than frantically deploying numerous times during a week, in response to the latest “need it today” request. With each additional deployment, risk of a poor deployment multiples and the lack of planning for ad hoc updates adds an exponent onto of that.

By following these proper steps, the developer(s) *and* the organization are setup for success rather than failure.  This will not only make the developer happy in the short term, it will result in the entire team having greater satisfaction with outcomes and their relationship with the developer(s) in there long term.  Yes it requires a little bit of discipline and advanced planning, but it should actually reduce overall time and cost of achieving the same results; its a classic case of how planning ahead saves time, money, and stress!


Startups Costs More Than You Think

I’ve spoken to countless people who are shocked when I tell them it should cost at least $25k-$30k to start just about any serious venture, even when bootstrapping.  I’m invariably told by the person I have this conversation with that they are confident they could do it for a lot less.  And then there was Mark Schuster’s recent post showing that the cost of starting a business has fallen precipitously and that it now costs as little as $5,000 to start a business.   So how could it be?  Am I just completely wrong?  Of course not!

There are two things happening here. First, no one ever counts their own time as being worth anything.  And second, product people always discount how much time/cost goes into marketing, and marketing and bizdev people always discount how much time/cost goes into product development.

Regarding the time issue, economists describe opportunity costs as the amount of potential revenue that one gives up for the opportunity to invest in something else. Or put another way, how much money would you have been making, had you been consulting all of those hours that you spent working on your own startup?  It is work time after all and you’d have to pay anyone else an hourly rate to do the same work.  So isn’t your time also worth something?  Perhaps it doesn’t feel so much like work though because it is on your own terms.  Fine, what about affiliate marketing then instead of that complex software program you’re building? A little time spent on PPC arbitrage and you’d be making some money there.  Again, money made on your own time and terms that you don’t have because you pursued something else.

So then what is the true cost of a startup?  Obviously the answers can vary dramatically depending on what you’re looking to do, but I penciled out the costs of starting three different types of business, SaaS, eCommerce, and Consulting – and I found they can all be done for $5-10k capital (if you’re very crafty), but will require an average of 3-4 months of unpaid time to get off the ground. I’d argue this extreme avoidance of capital usage is not the most efficient time/capital balance but I’ll save that for another time.  For now, let me give a few examples of how much time is required to illustrate my point:

1. Consulting – This seems like the simplest and easiest to get started.  Indeed if you already have a great professional network that is true, and you’re off to the races.  If not, you’ll be spending a few months networking your ass off, responding to RFPs, inbound marketing, and attending conferences and trade shows. The capital cost is minimal until you start hiring and begin requiring office space, but the entire first year or two of a consultancy’s life should probably be networking intensive.  Expect 2-3 months of this however until you start to see consistent clients coming in.

2. eCommerce  – Online retail seems like the next simplest.  If you’re smart you can minimize costs by keeping inventory low and doing fulfillment out of your garage.  But what if you don’t know exactly what to sell?  Well, expect to spend a solid month or two pouring through keyword data, testing products on PPC and eBay, and finding what really works.  Of course you can skip that exercise if you already have direction, which similar to the consulting network helps a lot.  But you’ll still need to lay a foundation.  How will you source your product and from who?  What are the shipping and tariffs and how will you make all that work? These questions take time to research. Next, what advertising channels work and which don’t?  Countless hours A/B testing landing pages and spending on PPC before they become consistently viable.  Aside from your time, expect to lose a few thousand dollars here and there on ads that don’t work until it is all dialed in.  Again, this is probably a 2-3 month process which will require full time effort, in addition to inventory costs, and the cost of ad testing that didn’t pan out.

3. SaaS Product.  This i admittedly my favorite.  Creating your own product is the most fun and the most lucrative, but also the most expensive.  First you’ll need a domain name and hosting and who’s going to do the graphic design for you?  Next, you’ll need to spend time designing the system and probably should bring in someone with domain knowledge to make sure you’re considering their workflows properly.  Do you compensate them?  So far not too bad, but then someone is going to need to code it.  Is it you?  Most likely anything of substance will require then next 8-10 weeks to get to that first iteration completed (the minimally viable product). But usually the MVP is only good enough for crude market tests and beta testers.  You’ll probably go through another iteration of 8-10 weeks in which you do intensive marketing testing and feature refinements before you’re ready to even make a dime!  So now we’re at 4.5 months of time and $5k of capital.  If you put proper value on that much time you’ll probably looking at $40-50k.

So there we go, that’s how I arrive at my numbers. It will realistically cost you $30-5ok all-in, once all time and capital costs are fully accounted for.  You are now at a point where you’re starting to make money off of your investment. Perhaps if you already have a head start with an active professional network (consulting), insight into the right products and marketing (insider knowledge from working for a competing eretailer?), or a code framework from other projects, you’ll have a head-start and can side-step some of this cost.  But then you must consider that time was spent developing those things.  And it is good to leverage assets you already have to reduce waste, but be honest about the true costs by accounting for these things properly.

In closing, I think it is important to look at true cost of entrepreneurial ventures in order to properly weigh those opportunities against the opportunities we give up along the way.Perhaps some projects would not be started if we truly appreciated the actual cost before beginning.  Or perhaps there are better opportunities that we wouldn’t so readily give up, after putting things into correct perspective.