Most companies that resell products suck at marketing. In the IT and industrial markets, resellers have existing relationships with clients that enable manufacturers to get their products to market. But, these resellers sell and market the old fashioned way: brochures and 1:1 sales conversations. They generally don't practice scale-able marketing methods, especially online marketing, very well. On the other hand, HubSpot resellers excel at generating demand via inbound marketing. As they should. They are inbound marketing agencies, after all.

We've been doing a lot of analysis in the last few months at HubSpot, in order to figure out the growth channels that will help HubSpot scale from 10s of thousands of customers to 100s of thousands of customers one day. The graph below shows what our different funnels look like.

As the graph shows, HubSpot goes to market in 3 different ways. We have an outbound sales team that calls perfect fit customers who haven't found us yet. We, of course, have an inbound sales team that calls the leads our marketing team generates. We have a channel sales team who works with our agency partners/resellers to acquire mutual clients/customers.

Before you read on, take a look at the graph and ask yourself, "What does the data tell us?". (I removed the absolute numbers and the 'conversion rate from lead worked to customers' from the graph. But, I set up the ratios so that you could accurately compare the channels.)

Outbound vs Inbound

As you can see from the graph, our inbound and outbound teams work the same amount of leads, x. Yet, the inbound marketing team produces 5x the number of customers from that same volume of leads. It's a testament to the sales efficiency that is enabled when prospects are attracted to a company, as opposed to being approached by the company.

On the flip side, marketing must generate 5x leads in order to create x workable leads. Unfortunately, not everyone who converts on our website is ready to do inbound marketing.

Inbound vs Channel

Our agency partners who resell our product usually use our product for their own inbound marketing. Therefore, we - unlike most channel sales programs - know how many leads they generate and how many permission-based contacts that they upload. On a monthly basis, our partners have collectively added 12/5ths of the contacts to their HubSpot powered marketing databases than our marketing team adds, or 12x the volume of leads our outbound team works. Despite this extremely large top of the funnel that our partners create in aggregate every month, they register less than half the volume of leads that our outbound team works. When compared to our inbound sales team, which works 20% of the leads that our marketing team generates, our partners only try to resell HubSpot to less than 5% of their contacts. Nonetheless, of the leads they register, they convert the same percentage to customers as our inbound sales team does. In conclusion, their sales conversion rates are equivalent to our inbound sales team. But, they do a comparatively poor job of turning leads into sales opportunities.

How Would You Capitalize on this Demand?

In aggregate, our partners have created massive unfulfilled demand for their services. Further, their bottom of the funnel sales conversion rates are equivalent (or better) than HubSpot's internal teams. While I didn't share this data in this article, client retention amongst our agency partners is also very strong. But, as discussed, the top of the funnel sales conversion rate is much lower than Hubspot's internal teams.

If you're a HubSpot partner, what do you plan to do differently after seeing this data? If you were HubSpot, what would you do to help your partners generate more revenue from the demand they've created?

I'll be speaking at Second Wind's 'YA2 - Your Agency Empowered' Event on 2/27/2013. My topic is "The Inbound Mandate". (Tony Mikes came up with the title. Not me. But, I like it very much.) There will be 100 agency principals in attendance, who have built very successful businesses by providing all kinds of advertising and marketing services to their clients over the last few decades.

Per Tony's request, I will be speaking about why every agency should be offering inbound marketing services and doing inbound marketing for themselves. Patrick Shea (@mpatrickshea), the team at Second Wind (@secondwindbuzz) and I have been working together on the contents of the presentation. Tony will be giving an introduction to what inbound marketing is. I'll be talking about why and how it's different than other ways of advertising and marketing, as well as why agencies should invest in inbound marketing.

What is Inbound Marketing?

Inbound marketing (wikipedia) is a term that can mean different things to different people. At HubSpot, we've created the inbound marketing methodology, which is what inbound marketing means to us. For the last year or two, I've explained it in 5 steps.

1. Attract traffic
2. Convert visitors into leads
3. Convert leads into sales
4. Retain, upsell and cross-sell to existing customers.
5. Analyze each activity for continuous improvement.

And here's the current official explanation of the inbound marketing methodology:

(Source: HubSpot's Inbound Marketing Methodology)

We will be launching an expanded version of the methodology that is a bit more inline with my 5 steps above.

9 Reasons to Invest in Inbound Marketing...

Typically, when we talk about inbound marketing, we contrast it's permission based nature with traditional advertising's interruptive nature. (See the table below.) We talk about how consumers skip over TV ads, avoid radio in favor of their iPod playlists and read their rss feed over a cup of coffee in lieu of the daily newspaper - as examples of how consumers are tuning out traditional advertising. We talk about how corporate buyers recycle direct mail before they read it, screen cold calls, click the spam button on unsolicited email messages and 'google it' before they consult an archive of trade publications - as examples of how corporate buyers aren't easily reached by traditional sales and marketing approaches anymore.

(Source: Inbound Marketing as the Next Phase of Web Marketing)

All of these trends have far reaching implications for media companies, marketers, salespeople and of course, agencies. But, if we only cite changing 'consumer buying processes' as the reason to adopt inbound marketing, we would be overlooking much of it's power and potential impact. In the 5+ years I've been working at HubSpot, we've come up with 9 additional reasons why inbound provides a superior foundation for marketing any business or product.

1. Inbound Marketing is Predictable.

Inbound marketers don't have a crystal ball, but some might consider it witchcraft. Not only are there loads of data that show the correlation between inbound marketing effort and inbound marketing results, a skilled inbound marketer can also assess a company's marketing assets and predict how fast they can grow traffic, leads and sales with those assets. For example, if a company has lots of great blog content but it's not optimized for search; has great white papers that available for download without a form completion required; has no social sharing buttons on their site; has a large social media following but isn't sharing content with them - an inbound marketer can use competitor data, analytics data, keyword research data and harness this inventory of under-utilized assets to predict results. They can predict lifts in traffic from search and social sources; improvements in lead yield through proper use of calls to action, landing pages and offers; and improvements in customer acquisition rates by properly training their sales and marketing team to use marketing automation, personalization, lead intelligence and inbound sales approaches.

2. Inbound Marketing is Trackable.

Want to know how many visitors, leads and sales that tweet generated? Want to know which keywords generate the most qualified leads?  Want to know whether that blog post influenced a sale? Want to know which blog post topics received the least amount of inbound links, comments, views or call-to-action clicks? (See table below as an example.)

(Source: Screen grab from HubSpot's Inbound Marketing Blog's Blog Analytics)

Want to know which landing page has the highest visitor-to-lead conversion rate? Want to know which source of traffic converted at the highest rate on a given landing page? Want to know which lead nurturing sequence received the highest click through rate? Want to know which email campaign caused the most unsubscribes? Want to know which pages on your site are viewed most often - right before people buy your product?

SEO, social media, PPC, lead generation, marketing automation, email marketing, paid online marketing... Do you want to track the results driven by each of these activities? Done. Some other marketing or advertising method you want to track online? Done. If you use the right marketing software, it's all trackable.

3. Inbound Marketing Efforts Can Be Directly Attributed to Revenue.

Because everything is trackable, inbound marketing activities can be attributed to dollars. In fact, inbound marketers' keystrokes are measured in dollars. (Okay. Not really. But, it's darn close.) We call this closed-loop analytics and closed-loop analytics empower marketers to tie their inbound marketing activities directly to the revenue it produces.

As you might imagine, you can track the journey of your individual contacts as they interact with you or each of your marketing assets. (See image of lead intelligence below.) It sounds creepy to some, but as soon as a visitor shares their email address, you can start tying their activity back to their individual record. From there, you can see what emails they open, what pages they view, what web elements they click, how they interact with any other [mobile or web] app you control, what keywords they mention on social media, what blog posts they comment on, what forms they complete, etc.

(Source: HubSpot's Lead Tracking & Intelligence.)

As they move through their buying process, from research to purchase, you can sync your marketing messages and sales calls to their interests and readiness for contact. You'll not only know when and how much they spend with you, but also how and why it happened. With inbound marketing, marketing is no longer fuzzy; it drives revenue in a predictable and trackable manner.

4. Inbound Marketing Only Requires Small Bets that Can Each Generate Big Returns.

Most advertising expenditures require that companies make big bets. At the far extreme, Super Bowl ads cost Millions of dollars to produce and then millions of dollars to air. (Can you imagine what you could do if you could spend $4M on inbound marketing?) But, even smaller advertising expenditures are still expensive compared to the small bets inbound marketers make every day at very low effort and with virtually no marginal cost. For example, you can't place your ad in the yellow pages for just one week. Even if you want to produce a TV spot for a local cable channel, you still have to hire a producer, writer and videographer and then pay the station a minimum amount of money to air it. Newspaper ads, magazine ads and even trade shows and direct mail are expensive and require a relatively large committment of time and money.

Inbound marketing does not even require you to invest thousands - let alone millions - in order to generate returns on your investment in time and money. Once you've set yourself up with the proper foundation -  the right messaging and branding;  social media profiles; a website optimized for search, social and lead generation; the right inbound marketing software for personalization and analytics - you can make really small bets that produce big returns. Some of these small bets - like blog posts, tweets and landing pages - will not work out. Some will hit it big. But your odds are much better than they are at the high-priced-big-buy-in tables of traditional advertising.

For example, you could spend 2 hours writing a blog post that goes viral on social media, gets shared by hundreds of people and attracts dozens of inbound links from thought leaders in your space. You could create an offer and a landing page that converts visitors at a really high rate. You could create an email campaign that receives a really high click-through rate. You could create a nurturing sequence that turns lots of weak leads into qualified leads for your sales team. You could create such a personalized experience on your website that your prospects are compelled to visit your website more frequently, moving further down the funnel with each visit.

Many inbound marketing agencies run thematic inbound marketing campaigns. It's not just about randomly writing blog posts and randomly creating ebooks on random topics. Inbound marketing campaigns are used to launch new products, build demand for refreshed products, enter new verticals, enter new geographies, influence different buyer personas and demographics and recruit employees, just like traditional ad campaigns are used. They're just significantly less costly to create and launch and can have significant upside when they're done right.

5. Inbound Marketing Creates the Foundation for Generating a Measurable ROI from Advertising.

Because individual inbound marketing activities and campaigns - like writing a blog post or launching a new landing page - require very low investments in time and money to produce and launch, they represent a perfect testing ground for concepts, ideas and messaging. These efficient little inbound marketing experiments - if you will - obviate the need for hours of creative brainstorming, pitch deck creation, free spec work, focus groups, concept revisioning and approval rounds that agencies must go through before launching a campaign. Even for companies that will continue investing heavily in traditional advertising, inbound marketing should be the proving grounds.  Inbound marketing creates the opportunity for small experiments to test creative before big risky investments are made in traditional advertising.

Further, inbound marketing assets, like blog posts and landing pages, become the object that those campaigns promote. In other words, your call to action - whether it's a QR code on a billboard, a super blow ad, or the the text copy on a pay-per-click ad - should include a call-to-action that leads prospects online.

(Source: Outdoord advertising Requires Distinct Calls to Action)

While I've never been able to effectively scan a QR code on a billboard, I'd be willing to wager that advertising's purpose in the future will shift from creating 'awareness' to promoting offers  and content that are accessible online. Companies like Outbrain and Sharethrough and publishers like Buzzfeed and Forbes are creating 'native advertising methods' that make the content the ad and the ad the content. The potential of native advertising to produce predictable, measurable and improvable returns when paired with inbound marketing will make traditional forms of advertising less and less attractive. Even less attractive than they are today...

(Source: Newspaper Association of America via Business Insider.)

6. Inbound Marketing Creates Content That Will Have a Positive Impact on Your Business Long into the Future.

Once a blog post, tweet or landing page is published to the web, it's there forever (unless you take it down for some stupid reason).  (In the screenshot below, you can see that an article I published in 2008 has been viewed more 83,291 times.) Once an article you've published ranks well for an important keyword phrase, it [usually] doesn't take much effort to maintain that keyword ranking and the traffic that it generates.

(Source: Screen shot of HubSpot's blog analytics for articles mentioning "link building".)

Once you've created an effective lead generation campaign using pay-per-click-advertising, it usually only requires minor tweaking to continue generating qualified leads.  Once you figure out calls to actions and conversion paths throughout your site, they'll generally keep working for a long time. Once a lead nurturing sequence is created, it can be used well into the future to nurture current and future contacts.

Inbound marketing creates assets that work long into the future to help your business generate traffic, leads, sales and loyal customers.

7. Inbound Marketing Attracts a Global Audience.

This past week, I hosted an informal call with Co-Grow member agencies where Dave Kaupp (@dkaupp) from Consilium Global Business Advisors gave a talk about the default global awareness that inbound marketing creates. During the call, we asked the members to look up how many of their site visitors come from outside of the United States. Tracy Dimarino Lewis (@Tracy_J_Lewis) from PR 20/20 said that 51% of their traffic comes from outside of the United States. I've seen similar numbers from other companies. At HubSpot, our Massachussetts based sales and marketing team generated 10% of our sales last year outside of the US. We opened our first overseas office in Dublin, Ireland this past month. About 40% of our leads comes from outside of the US and we plan to scale our International sales to 30% of our new customers by the end of the year. 

A global audience is a byproduct of inbound marketing. What would the cost of targeting an international audience be before inbound marketing?

8. Inbound Marketing Analytics Enable Improvement Over Time.

Peter Drucker once said, "If you can measure it, you can manage it." I think he would have an excellent inbound marketer. Since indvidual sales can be attributed back to individual inbound marketing campaigns, results can therefore be improved over time.

There are key metrics that are important in sales and marketing. When a buyer begines interacting with an inbound-marketing-powered company, they start out as site visitors and turn into contacts. Contacts continue on to become marketing qualified leads and then sales qualified leads. Sales qualified leads move through various opportunity stages such as "qualified," "committed" or "closed won". Customers become long term customers and hopefully, evangelists. Each of these stages has two important numbers: conversion rate and volume. For example, a company can turn 3% of their 10,000 visitors into 300 contacts every single month. They then can turn 30% of their 300 new contacts into 100 marketing qualified leads every month. 

Once these numbers are established for each stage of the funnel, a marketing and sales team can then go through and systematically improve each of these numbers. Using the example above, that company's marketing team could improve their visitor to contact conversion rate to 4% and generate 400 contacts each month instead of 300 contacts each month by simply launching more offers, landing pages and calls to action. (See screenshot below.)

(Source: Screen shot of landing page dashboard showing multiple landing pages and their conversion rates.)

There are multiple ways to improve conversion rates through every stage of the funnel. Some are sales driven. Some are marketing driven. Some require collaboration between the two. Either way, inbound marketing provides a system that smart sales and marketing professionals can use to grow their revenue over time. Like a strong sales team has done alone historically, inbound marketing coupled with inbound sales can create a predictable revenue growth engine.

9. Inbound Marketing Results are Cumulative & Compounding.

As we've established above, every inbound marketing asset you create provides returns long into the future. Therefore, every time you create a new asset, you create more potential for future returns... not unlike how adding money to a savings account generates more interest. With each asset you add to your inbound marketing portfolio, you attract new visitors, new leads and ultimately, new customers who bring new streams of revenue.

But, let's say you managed to save $100,000k in your savings account. You wouldn't leave it in there, would you? No. You'd find better ways to put that capital to use. Smart inbound marketers do the same thing. They leverage their previous returns to make their next investment generate better returns, just like a smart investor would put some of their capital in investment vehicles that generate better, long term returns.

For the most part, this happens automatically with inbound marketing, though, which obviously makes it even easier.  There are lots of examples of how inbound marketing is like a cumulative compounding investment vehicle. For example, once you write blog posts, those blog posts get people to subscribe to the blog. Then, when you publish your next blog post, it will be read by those subscribers who, in turn, might share new blog posts with more people, generating even more traffic and subscribers. (See chart below.) Another example is Google's pagerank: once a website has a high pagerank authority, anything else published to that website is more likely to rank well in search results.

(Source: Screenshot of HubSpot's Inbound Marketing Blog Growth showing compounding growth rates as a result of consistent publishing, subscriber growth, search rankings and social shares.)

Every blog post is an opportunity to rank for a new keyword phrase. Every great article you publish can attract a new link. Every new keyword will bring new search traffic. Every new link will bring more referral traffic. Every social media follower is someone who might share your content with their followers (who in turn, might follow you and share your future content with their followers). Every new landing page creates another opportunity to convert visitors into leads, and creates an offer that your email subscriber might share with their peers. Every new sales qualified lead will most likely introduce their co-workers to your content and company. Every new customer can become an evangelist. Long story short: the more assets you have, the more value each asset can generate.

Not only do inbound companies create predictable revenue growth, they create ones that produce cumulative, compounding revenue growth. Some call that hockey stick. Do you want hockey-stick growth?

(Source: HubSpot's growth curve as of October 2010.)

(Thanks to Matt Wainwright (@mdwainwright) and Patrick Shea (@mpatrickshea) for their help thinking through and proofing this post.)

Ever get frustrated 'explaining what you do for a living' to someone who has no clue? This is why I stopped talking about 'inbound marketing' with friends and family...

Big shout out to Nick Sal (@NickSalinbound), Nick's Nana (@notweeteraddress) and HubSpot marketing team (@HubSpot). Brilliant video.

For those that don't know him yet, Dan Tyre (@dantyre) was HubSpot's first salesperson, first sales manager and first sales director. He's both a HubSpot treasure and a HubSpot legend. If it wasn't for Dan, we wouldn't have an agency partner program. He mentored me through the process of petitioning the executive team to start the program and he literally stood at the front of the room shouting - at top speed - all of the reasons why we should start a program. He is the one, as the Inc article explains, who convinced Brian Halligan (@bhalligan) to reluctantly let us start the program. He has a lot of amazing traits and skills, but one of his more famous ones is his provocative way of convincing people to do things. When he says it, it's compelling.

At the beginning of 2012, DTyre got back involved in the agency partner program and currently manages a handful of channel account managers. In doing so, he's fully internalized what makes a successful inbound marketing agency.

Over the years, we've taught a lot of agencies how to increase their recurring retainer revenue in order to create strong positive cash flow; how to move away from project based work and the cash-flow roller coaster it causes. There's a special way we help them do it. When they follow the advice and training step-by-step, it doesn't fail. In the New Year, I'm going to be bold and call this the New Marketing Agency Retainer. Based on our success helping agencies do this and the resulting success this delivers to clients, I'm going to be really bold and say that this should be the standard way that every agency works.

Last month, DTyre was talking to an agency about 'The New Marketing Agency Retainer'. One of his account managers wrote it down in order to share with the agency afterward:

As we've discussed, we've spoken with many different types and sizes of agencies over the last year about "how and what they sell".  We quickly realized that what we mean by a retainer is different than what they usually mean. What we teach agencies is very different than a standard  “marketing services” retainer. Inbound marketing retainers are key to scaling a profitable agency and achieving the personal & professional goals that elude many agency owners. Here's the differences:

1. An inbound marketing retainer is an annual (or multi-year) contract for a set scope of activities - performed at specific frequencies - that is designed to help the client achieve their business growth goals.   It is not a month-to-month product-based catch-all for line item marketing services that change based on the whim of the client or some new creative idea that an agency conceives and pitches along the way.
2. An inbound marketing retainer drives lead generation and customer acquisition which is important for any company serious about growing. Other marketing services are an easy to marginalize, easy to cut expense that is much more peripheral to a company’s success and can be implemented anytime (or not).
3. An inbound marketing retainer creates tangible content assets as valuable as any other asset on the client’s balance sheet. Investments in blog posts, offers, landing pages and email marketing creative produce traffic, leads and sales month over month even if you take a month's hiatus. It has has paid huge dividends for early adopters as their results are not just cumulative, but compounding. 
4. An inbound marketing retainer provides value not just to the client's marketing efforts, but to their sales' efforts too. It shows a very direct ROI in lead quantity, quality, sales opportunity velocity and sales rep productivity. Some marketing services can be “squishy” and therefore difficult to justify even if the CMO believes that it is a worthwhile investment.
5. Regardless of the payment terms, it involves agreeing on very specific short and long term goals and then driving hard to accomplish them as quickly as possible within the budget agreed upon. As a result, it's highly profitable for both the agency and the client alike.

Regardless of the industry segment, generating leads & customers in 2012 was not easy. To produce results, inbound marketing retainers require excellent content generation, world class marketing software and the ability to quickly identify the right conclusions from analytics data,  then act on it with precision and speed.

In Q1 2013, there are two types of agency-to-prospect conversations taking place. One is agency owners justifying their “marketing services” for next year against $250 social media “experts”, free tools available to everyone, and justified by arbitrary improvements in some obtuse marketing metric. The other conversation is a strategic brainstorming session about the goals, plans, challenges and time line with senior level management on how to improve top line revenue results, reduce selling and marketing costs and improve sales rep productivity.

If you are not having those conversations today, you may want to ask yourself, "Why?"

See what I mean? Compelling?

Shannon Johnson (@shannopop) put together a great eBook, "Ultimate Guide to Agency Tools". It gives an overview of lots of software that is commonly used by agencies for collaboration, project management, time tracking, file sharing and more.

Here's the software that is covered:

1. File Sharing and Collaboration: Evernote, Dropbox, Google Drive/Google Apps for Business, Google Hangouts, MS Office365 with Sharepoint and Lync
2. Internal Social Networks: Salesforce Chatter, Yammer
3. Project Management, Time tracking and Administration: Basecamp, ActiveCollab, Intervals, Workamig, Trello
4. Content Sourcing, Creation & Management: Kapost, Zerys, Contently
5. Other: Passpack, Rapportive, Skitch from Evernote, Pixlr

Does your agency use any of these? How do you like them? What's missing from Shannon's list?

There is a great discussion going on in the HubSpot Inbound Marketing Agency forum about whether companies are turning their blogging traffic into new business.  Todd Giannattasio (@tresnicmedia) from Tresnic Media started the conversation by sharing the results of his '50 blog posts in 25 days' article.  Just like I shared the other day in my 'blogging frequency increases traffic' post, his experiment resulted in increased traffic too. Very few agencies will argue with this fact; there's lots of data that shows the correlation between blogging frequency and traffic growth.

In Todd's article, he talks about the 'harder to measure' benefits of increased blogging frequency including:

1. Getting referrals from people he meets through his blogging activity.
2. Sharing content during his sales process to help educate a prospect and move them further down the funnel towards buying.
3. Using blog posts to answer customer service questions.

All great stuff. However, many companies - who step on the blogging gas pedal - expect a more measurable and predictable way to scale sales from their increased blogging efforts. In my post, "Why You are Failing at Inbound Marketing", I detailed what many companies have done in order to turn inbound leads into sales.

What have you done to turn your traffic into sales?

10 marketing agencies have been contributing 1 blog post per month to this blog for 3 months. Additionally, in recent months, I've been posting several times per month.

My theory of inbound networking is that when like-minded companies market their businesses collaboratively, they'll all benefit more. We're still at the very early stages of proving that out. Below is some encouraging data, though.

The first graph below is from this website's HubSpot dashboard. It shows the traffic generated this month compared to the last 3 month's running average.

As you can see, traffic is way up this month. It's up 60% actually. But, that's not the only conclusion to make. As you can see in the chart, traffic rose significantly from December 8th to Dec 18th. We published 11 posts over that period and only 3 posts during the rest of the days in December. So, as the post title says, blogging frequency correlates well to traffic growth.

Why does traffic grow with more frequent blogging, though?

The graph below is the HubSpot Sources report for this website. For those that don't know, the Sources report shows the traffic, leads and sales that a company is generating from their web presence over time, and clearly shows the source of each visit. This particular view of the report shows the number of visits over a 4 month period.

By examining the color of the bars in the graph above, we can see that more traffic is coming from more types of sources. In other words, traffic diversity is much higher. Specifically, we see that direct traffic (blue), social media traffic (teal) and email marketing traffic (orange) rose steadily over the last 3 months. Why?

1. Email traffic is higher because many people subscribe to this blog by email.
2. Social media traffic is higher because there is more content to share and since we're a group of 10, there are more people to share it. 

PS. This is just a small test in a short period of time. But, as all of the contributors to this blog can tell you, this isn't the first time we've seen this. If you're looking for more proof, download this ebook where HubSpot analyzed blogging and traffic data from 7,000 customers. Kuno Creative has published several posts with data correlating blogging frequency to traffic growth. Here's a few: Blogging ROI, How Often Should You Blog, And Blogging Frequency Impacting Marketing Automation. Here's traffic and subscriber growth data from Impact Branding, who blogs very frequently.

Growing online traffic is this simple. Why aren't you blogging more?

There are 5 big 'ideas' that I've been developing in my head. I started sharing them with my team, some agency thought leaders, and the Co-Grow members this week. I've been writing things in Evernote for about 6 months. I'm going to start talking about them more publicly, so that I can get feedback and refine the ideas and refine how I communicate them. As always, I value collaboration. So please chime in.

1. The New Marketing Agency Retainer

The standard way that agencies do retainers merely enables an agency to determine how many hours that a client might need on a monthly basis so they can staff the account accordingly. It's abused by both agencies and clients. Clients often take advantage of it by ignoring the fact that they're over their time or out of scope. Agencies often take advantage by stretching out the time it takes to do things or just slacking because they can get away with it for certain clients or in certain months.

The New Marketing Agency Retainer starts by the agency understanding the client's business growth goals; how much they want to grow their revenue and working backwards towards the quantifiable marketing metrics they need to hit. They then work together to create a plan that will get the client to those goals. They agree on how to report marketing and business results to each other, what to do if they're short of goal or over goal within the budget constraints. The agency - based on their experience and data - determines what marketing activities must occurr on a monthly basis in order to move in the direction of the goal within the budget and the time frame constraints. Upfront, the client and agency agree upon the resources required at the agency and in-house in order to achieve the goal, as well as who will do what. Then, they sign an agreement. If work that is outside of the scope comes up, they do not push the agreed upon activities aside to do them; they don't do them or they are added as variances to the retainer activities.

Agencies can start securing 'New Marketing Agency Retainers' by first definining pricing and packaging of marketing retainers, so that the services included and the frequency of these services can predictably deliver the business growth that clients typically desire. I think IMPACT's pricing page is the best example of this. (I'm not necessarily suggesting that pricing needs to be published.) Once the pricing and packaging are defined, everything else flows from there. The consultative sales process must be designed to sell these retainer packages (or walk away if the client isn't a fit). The delivery processes must be developed to execute the marketing activities within the packages at the frequency needed. Marketing methodologies and software must be setup and used to execute these activities and them measure and report the impact of these activities on key marketing metrics. Project management and time tracking must then be implemented around these standardized services and processes in order to determine the actual cost to deliver them, across clients. Based on this data, retainer prices should be modified for future clients and renewals.

The best thing about this approach for agencies is that it if it's executed well, it enables them to divorce the amount of time they spend delivering marketing services from the fees they charge. In other words, because they are delivering ROI, they can charge based on the value they deliver, not the hours. This enables agencies to increase their profitability.

While clients may not think they want to pay a premium in this new retainer model, most smart clients realize that this creates the opportunity for their agency to staff with more and better talent, deliver better quality work and ultimately deliver even more value to the client. It is a true partnership where both agency and client benefit more. It is a win-win.

2. How Inbound Marketing Changes Sales

Based on the success of my 'Twitter for Salespeople' training deck (and derivative work), Frank Belzer's coming book 'Sales Shift; How Inbound Marketing Changes Sales', Todd Hockenberry's article yesterday about salespeople doing inbound marketing, the HubSpot-Salesforce webinar this week, HubSpot's success generating the majority of our sales from inbound leads, and many other experiences over the last few years... I think it's time to realize that we're not just changing marketing with inbound marketing. We're changing the way sales happens. I'm not going to suggest that the role of the salesperson is less important. Quite the opposite, Trish Bertuzzi. My argument will be that sales has changed and that salespeople need to change with it. The buyer has different expectations and salespeople need to leverage collected and gathered lead intelligence about the buyer in order to build their funnel and manage the sales process more effectively. During the sales process, salespeople must follow a truly consultative sales process, where the prospects always feels like they are being helped even when they're being challenged. Different people are calling it different things: smarketing, sales and marketing alignment, social selling and inbound sales. Regardless of the name, I'm looking forward to further figuring this out with a bunch of sales and marketing experts this year.

3. Convergence of the Media, Advertising, Marketing Services & Technology Worlds

Any media company, marketing agency or technology company that doesn't realize that their competition is all of us yet - is going to have a rude awakening this year. Google, facebook, Linkedin, Twitter, Microsoft, etc. hire developers and they build web based software. But, they are really media companies selling advertising. They (especially Google) have superseded media companies in the advertising sales game, by making it significantly more efficient, less risky and more transparent for advertisers. In order to recover lost revenue (and the revenue they expect to lose), media companies are trying to innovate. They're not just innovating on their ad-driven media model, though. They are charging for content, launching their own technology-driven advertising products, trying to regain audience through web and mobile app development and... expanding into marketing services. (At HubSpot, we are helping lots of media companies expand into marketing services.)

Unfortunately for agencies, media companies are not just selling marketing services. They are combining them with some of their own ad products and delivering more value than agencies can, just like the tech companies are doing to the media companies.

Meanwhile, marketing software companies - instead of agencies - are driving the way marketers adapt to the changing environment. Marketing software companies are defining how agencies get hired and software is measuring whether agencies are delivering enough value to justify keeping them around.

Agencies - being the least profitable of the group and the lowest growth - are getting squeezed further. Some agencies are responding by diversifying revenue streams into training and publishing or even developing their own web apps or software. They are aggressively partnering with technology companies and learning new skills from them, as software and technology companies don't provide nearly enough serivce to their clients. PR 20/20 is the quintessential example of a small nimble competitor that is adapting and building a profitable business by doing all of these things; training, publishing, software, partnering. There's loads of examples of agencies doing nothing; my team talks to them every day.

This will continue to be a crazy competitive, constantly changing media-marketing-advertising-technology world this year. The change of pace will probably accelerate. In fact, I hope to cause some of it.

4. Building an Inbound Channel Sales Program

I get approached quite a bit to share how we built our agency partner program at HubSpot. It is unlike any other channel sales program. We provide a level of training and support that no other marketing software company provides to marketing agencies, who in turn use our software to help deliver retainer services and ultimately, superior value to their clients. It contributes nearly 40% of HubSpot's new monthly revenue. Pseudo-competitors and comlimentary software companies are trying to copy the model. (I advise some of the complimentary ones.)

But, we're not done innovating. Over the next year, our partners will become an integral part of our entire growth plan at HubSpot. At Inbound12, I announced the theme for the year of "Learn Together, Market Together & Sell Together". We've implemented some programs with a handful of partners and a handful of channel account managers on my team. The programs are working well. We'll continue tweaking them and will be rolling more of that out over the year to more of our partners. Ultimately, we'll provide more sales and marketing support and significantly more training for our partners. We're going to build a massive marketing and sales machine together, and together we're going to help a lot of clients outgrow their competition. We're going to do it collaboratively.

5. Inbound Networking

I'm pleased with the progress we've made with this group blog. I like the fact that we have two competing definitions and implementations for inbound networking and that we're all figuring it out as we go - out in the open. 

We have 9 Co-Grow members and we have 2 solid months of contributions from them. Mary Planding is doing an excellent job as editor and group wrangler. We've also been doing weekly calls where we have guest speakers and get feedback and counsel from each other. The conversations that the blog posts are sparking are great. The webinar session conversations are even better.

I like how each of the members have a common understanding of inbound marketing, but cover different topics from different angles in their blog posts. We're going to experiment with writing on the same topic in January and see what happens. Either way, the group seems to be coalescing and we are building up traffic and lead volumes faster by working together.

In the new year, I'll be turning this site into a website that looks like a "Meta Marketing Agency". There will be pages for each member agency (example) and we'll start to list the services they provide as well as publish some case studies. I'm excited to a) turn this into a strong source of business and collaborative learning for the members and c) show that 'potential competitors' working together is more powerful than 'potential collaborators' working in silos. In reality, we compete with very few companies when we collaborate. Somehow, there is more business for all of us when we work together. Not to mention that we learn a lot faster when we collaborate.

In addition to building this group, I also expect to see some 'inbound networking' groups form in other industries where it makes sense to collaboratively market, rather than compete. I plan to get some software built that will assist these groups in tracking and managing the contribution from each member.

Also, I've held off adding new member agencies to the roster. Now that we have some processes and people in place and a bit of a track record of working well together, we'll add more members. The more, the merrier. I'll be building a scale-able way for new members to sign up, but feel free to inquire in the meanwhile.

Feedback Please

For those that haven't caught on yet, I will personally be using this blog as a journal. It's been my style since I started blogging almost a decade ago. It helps me think, let's other people know what I'm thinking and helps me get feedback about my thoughts as I form them. If you take the time to comment below, use the #s next to the themes above in order to keep the comment stream readable. For example, if you want to comment on "inbound networking, write "Re: #5" in front of your comment.

I will read and will eventually respond to every comment. Thanks.

When I met Jeetu Mahtani in 1999, I didn't think I'd ever be helping him build a salesteam in Dublin, Ireland, for one of the fastest growing SaaS businesses in history.

I've worked alongside Jeetu in 5 different working relationships over 13 years. There was only a short amount of time where we didn't have a mutually defined goal. This is the 6th. Leading our international expansion is also his biggest role yet and I'm sure he's going to knock it out of the park, just like all of the others.

Here's YOUR opportunity to work with him.

I recently taught a portion of my salesteam how to use Twitter effectively for their job. Even though our marketing team members are masters at Twitter, most of our sales team scoffs at the idea of using Twitter to help them do their jobs. In fact, we often joke by saying "Are you on the Twitters?" when talking to each other.

For me, though, the reality is that it's been huge at helping me connect with prospects, build credibility and strengthen relationships with partners and other thought leaders. So, I bottled up my methods into a deck. The salespeople I have trained are now using Twitter and most of them have booked atleast one appointment as a result.

PS. I know the deck is hideous. Based on my previous experience of releasing half-baked ideas and letting other people build on them, I'm releasing it in it's hideous state. Take it and use at your will. Feel free to improve it.

PPS. Our product team is working on some cool things to make this process even easier for salespeople. Stay tuned.

PPPS: [Update 12/13/2012] Douglas Burdett has shared a few links with me on this subject. I love this example of 'social prospecting' gone wrong. Will add that to V2 of the deck. And here's a great one from Hootsuite on how Twitter can help your salesteam. If you have more suggestions, tweet them to me @pc4media.