Inbound vs. Outbound Marketing

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Staying afloat in today’s business world isn’t easy.

As a new business how do you catch a potential client’s attention with the thousands of images, tweets, posts, catch phrases, etc. that bombard us each and every day?

There’s no simple answer to this question, but there is a process that works and a very specific plan that needs to be created for it to be successful.

To get your brand out there, each business has to have some sort of marketing campaign. When it comes to marketing, there are a variety of ways a business can go about it. Two of the more well known processes are inbound and outbound marketing.

Outbound is the more traditional tactic, where there is some form of targeted outreach, such as billboard ads or radio spots.

As Jayson Demers explains inbound marketing tactics are more concerned with establishing a presence that naturally invites people to your organization, usually through the provision of valuable materials (like informative content).

In his article, Demers, a SEO and marketing guru, explains the difference between the two marketing tactics.

“Each strategic umbrella has advantages and disadvantages, of course, and both are designed to attract more leads for your business,” he says.

Understanding the potential of a lead is very important as well.

Defining Lead Quality

“First, let’s decide how we’re going to define the quality of a lead, and what would make one lead “better” than another.”

Demers says there are four dimensions to consider:

  • Cost. If two leads are otherwise equal, and one costs far less to procure, we can consider it to be a more valuable lead overall.
  • Time. Because fast-generating revenue is generally better than slow-burning revenue, we also need to consider the time it takes to generate leads in each area.
  • Volume/sustainability. If one strategy is capable of generating more leads over time, or is more highly scalable than the other strategy, it should win our favor.
  • Closing potential. Finally, and perhaps most importantly, we should consider how specifically targeted a lead is, as well as its chances of closing. Between two otherwise equal leads, the lead with a higher chance of closing is more valuable because on average, it’s going to generate more revenue for the business.

How does inbound and outbound marketing stack up in these dimensions.

Cost

According to one report from Hubspot, organizations that use inbound marketing tactics see a per-lead cost that’s 61 percent less than their outbound-centric counterparts. Why is that?

Generally, outbound tactics require more moving parts, and rely on outside vendors for at least some of their execution. For example, if you invest in online advertising, you’ll likely pay a fixed cost for every “click” or visitor you get. If you buy billboard space or place advertising, you’ll need to work with a media company, and could end up paying hundreds to thousands of dollars for the spot.

Inbound marketing tactics like writing content and getting on social media take time, but they barely cost anything.

Time

Inbound marketing is at a disadvantage when it comes to the time it takes to generate leads, however. Most outbound strategies can start drawing in traffic and leads immediately (as soon as you write the check), but inbound strategies take more time to develop.

For example, according to Josh Steimle, most SEO firms estimate that it takes between 4 and 6 months to start seeing any results, and the timelines for content marketing and social media marketing are very similar. Inbound marketing is a long-term strategy, so you need to prepare for short-term losses and shortfalls.

Volume and Sustainability

Now let’s look at volume and sustainability. Because inbound marketing efforts have the potential to grow exponentially (as you attract a bigger recurring audience and your permanent asset collection grows), it generally provides a higher volume potential; it also yields more leads for every dollar spent.

Outbound marketing is scalable too, but you’ll still pay a similar per-lead cost, making it less cost-effective over the long run. Plus, more than 84 percent of young adults have deliberately left a “favorite” website because their advertising was intrusive; if you rely exclusively on outbound tactics, you might drive away the very audience you’re trying to attract.

Closing Potential

Closing potential is the real money-maker in this suite of variables. With 35 percent of salespeople noting that closing deals is harder than it was 2 or 3 years ago, this should be the most important influencing factor on this list.

The closing potential of a lead can be indirectly measured by how closely aligned with your target demographics the lead is, how “warm” or interested the lead is, and how much information you have on that lead. If you’re using similar calls-to-action, inbound and outbound tactics offer similar information on your leads.

However, outbound tactics usually provide you with better targeting options—though it’s still possible to refine your inbound leads with your content distribution network. But the real kicker is lead warmth, since inbound leads tend to be far warmer and more familiar with your brand than outbound leads.

They’ve read your content, they follow you, and chances are, if they reach out, they’re ready to buy with you.

The Bottom Line

I maintain that there are clear advantages to both inbound and outbound marketing for lead generation, and certain situations will see more benefits from one type over the other, but overall, I have to give the edge to inbound. Inbound leads tend to be warmer, more cost-efficient, and a better strategy over the long term. So if you’re forced to allocate time or budget to just one strategic approach, I’d go with inbound.

Outbound tactics aren’t necessarily worse, but they’re usually best reserved for when you need to generate leads quickly, or need some way to supplement your other efforts. They just usually aren’t as cost-efficient or as scalable as their inbound counterparts.

Demers is the founder & CEO of AudienceBloom, a Seattle-based content marketing firm, as well as EmailAnalytics, an email productivity app, and Kwippy, an iOS/Android app in which users receive themed photo challenges randomly throughout the day.