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Inbound vs. outbound lead generation: The differences and similarities

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It's undeniable that outbound lead generation has, generally, become less effective, especially in B2B marketing. Inbound is now the leading strategy for long-term success. But outbound lead gen tactics still have a role to play in the marketing mix.

Inbound vs. outbound: the rise and fall of marketing strategies

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.

Buyers now perform most of their pre-purchase research and vendor selection online and at their discretion. Without relying on adverts, emails, and cold calls to solve their problems, it comes as no surprise that we've seen a decline in the effectiveness of outbound lead gen methods.

In their place, inbound lead generation strategies have been developed that align better with buyer behaviour and deliver more reliable results.

What is inbound lead generation?

Inbound lead generation is the creation of content and campaigns that attract website visitors and convert them into leads.

How does this work?

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 for your knowledge, to begin an ongoing conversation.

Inbound allows 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 content, is used to build trust, earn attention, and establish a relationship.

Inbound lead generation campaigns focus on helping, not selling

Brands that 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.

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

Inbound lead generation leverages search engines and social media platforms to put prospects in contact with your content.

Types of inbound tactics

Inbound marketing activities include, but aren't limited to:

What is an inbound lead?

An inbound lead is any B2B prospect who's been attracted to your content and converts as part of your inbound lead generation strategy. An inbound lead is someone who:

  • Downloads an eBook or guide
  • Contacts the sales team after reading a piece of pillar content
  • Requests a demo after watching a webinar
  • Fills in a survey

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

What is outbound lead generation?

Outbound lead generation is the sending or pushing of messages out to a target audience, regardless of whether they have asked for it or expressed an interest. In this scenario, it's you, not the prospect, who chooses the time and place of the interaction hence the term "interruption marketing". 

Types of outbound lead gen tactics

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
  • Direct mail

The majority of outbound tactics require a paid delivery mechanism, which adds additional costs. This adds risk and, as a result, campaigns tend to lead towards selling, rather than helping or educating.

What is an outbound lead?

An outbound lead can be defined as a B2B prospect that has been approached by you through an outbound channel, such as a cold email or cold call, and agreed to talk to your sales team.

Similarities between inbound and outbound lead generation

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

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

The 3 differences between inbound and outbound lead generation

The differences between these lead gen strategies are:

  1. The control of engagement
  2. The value of marketing assets
  3. Cost profile of campaigns

 

1. The control of engagement

As we've 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 to exchange of information.

In an inbound strategy you, for the most part, let prospects choose how they engage. You allow prospects to discover you when the time is right for them and by the means they prefer.

Outbound lead gen lets you, not your prospect, decide when they see adverts, receive calls, and are sent emails with no knowledge of, or care for, the prospect's readiness.

2. The value of marketing assets

Inbound assets also have a longer lifetime than outbound campaigns. For example, evergreen content can produce leads long after it was first created, providing significant long-term ROI on your marketing activity.

Outbound campaigns are typically finite and short in length due mainly to their higher cost profile and risk levels. Once the campaign ends, most of the assets you've created aren't used again.

3. Cost profile of campaigns

Inbound campaigns typically have lower costs and are spread over a longer timeframe. Traffic is earned rather than bought so there's no mandatory requirement to buy the distribution method.

The cost profile of a typical outbound campaign will be short and high. This is due in part to the relatively high cost of the delivery mechanisms used (advertising, post or cold calling) and the need to manage the risk of failure. You don't want an unsuccessful outbound campaign running for a long time.

However, costs for any lead gen campaign can mount up, given enough time. But with inbound, the cost per lead reduces 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 increase if creative isn't refreshed and the target audience becomes fatigued with it.

Which lead gen method is right for your business?

While the tactics 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.

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.

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