There’s a good chance you know about the legendary seven wonders of the world: there are the Great Pyramids of Giza, the Hanging Gardens of Babylon and the Roman Colosseum, among many other impressive man-made feats. However, did you know that there is actually an eighth wonder of the world, and this eighth wonder isn’t actually a popular tourist attraction — but instead, is something that can help your inbound marketing efforts increase exponentially?
That eighth wonder — whose discovery/designation is famously attributed to Albert Einstein — is compound interest.
Legend has it that Albert Einstein once remarked, “Compound interest is the eighth wonder of the world. He who understands it, earns it.” While no one can quite track the original source of the notorious quote, math experts believe that the famous scientists and thinker was the first person to clearly lay out the power of compound interest — and not just for investors, but also in other parts of life in which people can invest money, time and resources.
Earning compound interest on an investment happens when you accrue interest on that investment — and then, in the future, you get to accrue more interest on the interest that’s already been accrued. It essentially means that your investment grows and grows, expanding upon itself — with no intervention from you.
If you’re a marketer, you may want to take heed of Einstein’s words — especially when it comes to the way that you think about your company’s inbound marketing efforts.
How Compound Interest Applies to Inbound Marketing
Today, digital marketing is essential in order to grow your business. There are several different types of digital marketing efforts — including both outbound and inbound techniques. Outbound efforts are interruptive marketing strategies. They place things like display ads, pop-up videos and banners in places where consumers will encounter them during the time they spend on the internet — whether those consumers want to view them or not.
Alternatively, inbound marketing is a permissive marketing strategy — and one whose payoff essentially compounds, once an initial investment has been made. Unlike outbound marketing, inbound marketing uses valuable, useful information to draw potential customers into a company, showing them that that company is trustworthy and knowledgeable and ultimately worth doing business with.
In order to disseminate inbound content, companies can use a variety of tactics. There’s social media, where content is shared for free with followers. There is organic search traffic, where people discover your content by doing a search for keywords that are related to your content on a search engine. There’s also ways you can pay to get your content out in front of the eyes of people who want to see it, by placing pay-per-click ads for it, which show up in people’s search engine results when they search for something related, or by placing ads on social media networks.
When it comes to understanding the importance of inbound marketing — and why it’s so powerful — it can be helpful to keep Einstein’s notion of compounding in mind.
For companies to tackle inbound marketing, they must first create and distribute valuable content on the web. This valuable content includes things like blog posts, e-books, white papers, videos and more. While these assets require money to create and distribute initially, once they exist on the web, they continuously build upon themselves as more and more people are exposed to them. The more people who encounter your inbound efforts and are delighted by them, the more they are distributed and seen — and the more their impact continues to grow — without you having to intervene. Because inbound marketing efforts compound naturally, they are a smart marketing investment: Your company only needs to make one investment, and then your customers and potential customers can spread and disseminate that marketing material for you.
HubSpot CFO John Kinzer does a good job of explaining how the compound interest effect applies to inbound marketing succinctly:
“[Inbound marketing] brings in other people from social media. When that happens, new leads and markets can be discovered that we would never have encountered otherwise. A blog can be spread out all across the web and bring in referral links from all kinds of blogs, publications, and social media sites. That’s an amazing potential impact and a cost-effective way to attract qualified leads.”
Why Inbound Marketing Works
Inbound marketing works because it attracts consumers who are naturally drawn to your brand and the material you put out. If they aren’t interested in or compelled by what your doing, they won’t discover it. For that reason, you can use inbound marketing to create customers that are net promoters of your content. Once they buy from you and they are delighted by what you have to offer, they share your material — which naturally helps grow and expand your marketing efforts, without your having to intervene.
How to Start Applying Inbound Marketing to Your Business
If you’re convinced of the power of inbound marketing efforts to compound, then it’s time for you to start focusing on your own inbound strategy.
Inbound marketing helps naturally move people through the sales funnel faster, so they close faster, and start spreading the word about your brand. To bring people into the funnel, you can create content that consumers find from your social efforts or ads. Then, once they find that content and like it, they can do more research about your brand — and find out what you’re all about. This moves them to the middle of the funnel, where they may hand over their email address so they can regularly receive content from you (and be nurtured as a lead). Once they’re convinced you out that you have lots of information they like — and solutions to their problems — they can be can move the bottom and become a paying customer. After the customer has moved all the way through the funnel (thanks to your inbound content!), they’ll share information about your brand with the people in their lives — and the process repeats, so your business can start to grow exponentially.
Sources:
http://www.snopes.com/quotes/einstein/interest.asp
http://www.investopedia.com/articles/investing/020614/learn-simple-and-compound-interest.asp
https://blog.hubspot.com/marketing/cfo-perspective-inbound-marketing
