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Inbound vs. outbound lead generation, the differences and similarities

Inbound vs outbound lead genMarketing has undergone radical change in the last decade, spurred on by the pace of technological progress, the rise and evolution of search, and the consequent democratisation of knowledge. 

Editors note: This post was originally published in 2013. Quite a lot has happened in the world of marketing in the intervening years, so it has been overhauled for greater accuracy and relevance now.

What worked to generate leads (or demand) 10 years ago doesn’t work nearly as well now that buyers wield far more power over their decision making and purchase processes.

Given that buyers now perform the vast majority of their pre-purchase research and vendor selection online and at their discretion, without having to pay attention to adverts, emails and cold calls to solve their problems, it should come as no surprise that there has been a steep decline in the effectiveness of these 'outbound' methods.

In their place, inbound methods have developed that align better with buyer behaviour and deliver more reliable results.

Read our Introduction to B2B Inbound Marketing here and learn all about this  powerful approach to generating leads and sales.

What is inbound lead generation?

Inbound lead generation is creation of content and campaigns that bring in website visitors and converts them into leads. It does this by making your brand more discoverable online, in search engines and social media platforms, and by using valuable content to engage visitors in an information exchange - their contact information in return for your knowledge - so that ongoing communication can be achieved.

The emphasis here is on allowing buyers to control the time and place (channel) of the engagement and the exchange of information - choosing to do it or not. Value, in the form of the content, is used to build trust, earn attention and establish a relationship.

In addition to aligning to the buyers preference for time and place, inbound lead generation campaigns focus on helping rather than selling. Brands the help buyers to define, research and solve problems, and to make better purchase decisions, are more effective at reaching buyers earlier in the decision making process, building trust and creating the ability to positively influence purchase processes.

You can think of inbound as laying out a trail of information and incentives that prospects can follow in towards your brand and, hopefully, all the way to the bottom of your funnel.

Inbound lead generation leverages search engines and social media platforms for put prospects in contact with your content. Some of the tactics that can be considered inbound include content marketing, blogging, SEO, lead nurturing, live chat/message and, to some extent, programmatic advertising.

What is outbound lead generation?

Outbound lead generation, on the other hand, is the sending or pushing of messages out at a target audience, regardless of whether they have asked for it or expressed an interest in the content. In this scenario it is you, not the prospect, who choses the time and place of the interaction - hence the term 'interruption marketing'.

Depending on how they are used, some of the tactics that can be considered typically outbound, in B2B marketing at least, include mass email, cold calling, display advertising and direct mail.

The majority of outbound tactics require a paid delivery mechanism, which adds to the cost of running any campaign. This adds to the risk and, as a result, tends to influence the campaign towards selling rather than helping or educating.

Similarities between inbound and outbound lead generation

There are only really two similarities between these two different approaches to lead generation:

  1. The objective is to generate leads, or create demand
  2. Both methods require a good understanding of segmentation of the target audiences


Differences between inbound and outbound lead generation

As we have already explored, the fundamental difference between the inbound and outbound approaches to lead generation is who controls the timing and place of all activity, from consumption of content through to exchange of information.

In an inbound strategy you, for the main part, let prospects determine these things. You allow prospects to discover you when the timing is right for them and by the means they prefer. With outbound methods meanwhile, it is you, not your prospect, who (tries to) decide when they see adverts, calls are made or mailers sent, with no knowledge of or care for the prospect's readiness.

Inbound assets also have a longer lifetime than outbound campaigns. For example, evergreen content can produce leads long after it first created. Outbound campaigns are, meanwhile, typically finite, short even, in length - due mainly to their higher cost profile and risk levels.

The cost profile of a typically outbound campaign will, typically, be short and high. This I due in part to the relatively high cost of the delivery mechanisms used (advertising, post or telephone work) and the need to manage the risk of failure - you don't want an unsuccessful outbound campaign running for a long time.

Inbound campaigns meanwhile typically have lower costs and are spread over a longer timeframe. Traffic is earned rather than bought so there is no mandatory requirement to buy the distribution method. Costs for inbound campaigns can, of course, mount up of the long term. However, the cost per lead should get lower over time thanks to the compound returns offered by inbound tactics. The cost per lead of outbound campaigns will typically remain the same and may even get higher if creative isn't renewed and the target audience becomes fatigued with it.

Which method is right for your business?

It is undeniable that outbound methods of lead generation have, generally, become less effective, especially in B2B marketing. While the tactics that are synonymous with outbound are not totally dead in the water and still have a place in the B2B marketing and sales mix, inbound has become a much better foundation for B2B growth.

Inbound lead generation is cheaper and easier to get started with, is lower risk, and delivers compounding returns that further lower cost over time.

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