Inbound Leads, Outbound Leads, and Their Roles in Marketing
Every business wants more qualified leads. A higher number of qualified leads means more customers, which means more revenue for your business.
But what kinds of leads should you aim to generate? You may have heard the terms inbound leads and outbound leads. Outbound leads are generated using more traditional methods while generating inbound leads involves new approaches that growing numbers of businesses are turning to.
In this post, we’ll explore the differences between inbound leads vs. outbound leads, the pros and cons of each, and which your business should focus on.
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What are leads?
First things first, what exactly is a lead? A lead is someone who has expressed interest in your product, service, or brand and may eventually become a customer.
They might express their interest during a conversation with a company representative, by filling out a form on your website, or through other channels.
The more qualified a lead is, the better the chances they’ll convert into a customer. A company’s marketing team typically tries to generate as many highly qualified leads as possible.
These leads then go through a lead nurturing process to move them toward making a purchase. The sales team then works to convert these leads into customers.
What are outbound leads?
Outbound leads are leads that you acquire by reaching out and initiating contact. These leads are ‘cold,’ meaning they haven’t requested that you reach out to them. If the prospect responds to your communication by expressing interest, they become a lead.
Common outbound lead generation methods include cold calls, banner ads on websites, billboards, and television ads.
What are inbound leads?
Inbound leads are leads that initiate contact with you or request information from you. Often, an inbound lead will provide their contact information in exchange for content, information, or a special offer. For example, a visitor to your website might sign up for your email list or fill out a form with their contact information to download a free ebook.
Inbound marketing strategies aim to bring qualified prospects to you and then convert them into leads. Inbound marketing is sometimes called permission marketing because the leads give you permission to market to them.
Inbound leads vs. outbound leads
At this point, you might be wondering which type of leads your business should be focusing on more. Let’s compare the two lead types and discuss some of their pros and cons.
Who controls the time and channel of interactions?
One of the main differences between inbound and outbound lead generation is who controls the time and place of the interactions.
With inbound leads, the lead decides when they’re going to initiate contact with your brand and in what way they’re going to interact.
With outbound, the advertiser decides when they’re going to reach out to a prospect and via what channels.
This setup means that, with outbound lead generation, you have more control over the interactions. While this allows you to plan out your strategies more precisely, you’re responsible for making sure your interactions are timed in a way that maximizes conversions.
When generating inbound leads, you have less control over the process, but leads may be more likely to convert. Because they chose to interact with your brand, they likely have a genuine interest in it.
- Outbound: You have more control over when and how you reach out to prospects. This means you need to determine the optimal channels and times for conversions, which is challenging.
- Inbound: Prospects control how and when they reach out to you, meaning they’re more likely to have a genuine interest in your brand and convert.
How aware of your brand is the lead during the first interaction?
Another big difference is the lead’s level of awareness of your brand when they enter your marketing funnel.
When you first contact an outbound lead, they likely know very little about your brand. So, you’ll have to start educating them from the ground up. Because they have minimal knowledge of your brand, products, services, and even your industry, they’re not ready to convert.
Inbound leads are much more aware of your brand and how you can help them. By the time they contact you, they’ve already done some research and gotten familiar with your brand, meaning they’re closer to making a purchase decision.
- Outbound: New leads likely know very little about your brand, so they’re not ready to convert.
- Inbound: New leads are already familiar with your brand, meaning they’re closer to converting.
How quickly do the methods work?
How quickly can you gain new leads with inbound and outbound lead generation processes?
The outbound process is generally quick. Since you initiate contact, the process begins when you reach out. You know almost right away whether that prospect will become a lead.
You’ll likely have to reach out to many prospects, though, to get the desired number of leads.
With inbound, you have to wait for leads to come with you. It takes time for prospects to find your marketing materials, and they’ll likely interact with several before becoming a lead.
Prospects control the early stages of the lead generation process, however, so you don’t have to invest time in manual activities like calling prospects.
- Outbound: You initiate contact, so the process is quick. You’ll likely need to reach out to a large number of prospects, though.
- Inbound: You need to wait for leads to come to you, so it can take some time to see a return on your investments. However, you’ll save time since prospects control the early stages of the lead generation process.
How do you target your marketing efforts?
Targeting your marketing materials to the right audiences can help you increase your conversion rates.
With outbound marketing, you show your message to a broad audience through mediums such as newspaper and television ads. You can choose to show your ads on certain TV channels, for instance, but the amount of targeting precision is limited.
Methods such as cold calls allow for somewhat more precision, but you still typically have a limited amount of information about the people you’re calling.
To target your audience with inbound methods, you create content that appeals to your ideal customers and promote it through channels where they can find it, like search engines and social media networks. You can also target pay-per-click (PPC) search ads based on the keywords your audience searches online.
- Outbound: You broadcast your marketing message to a wide audience, which allows for limited targeting precision.
- Inbound: You can create and promote marketing materials that appeal to your audience, enabling more precise targeting.
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How do you establish trust with leads?
Establishing trust and credibility is essential to winning over new customers. So, how do outbound and inbound leads compare when it comes to earning their trust?
With outbound leads, you have to establish some level of trust when you first reach out to them since they don’t know much about you.
Inbound leads, on the other hand, already have some trust in you and view you as credible. They’ve done some research into your business and contacted you to learn more.
- Outbound: You need to establish trust after reaching out to prospects since they have limited information about your business.
- Inbound: Prospects who contact you have already established some level of trust in your brand.
What kinds of investments are required?
What are the differences between inbound and outbound when it comes to the investments they require?
Outbound tends to involve short-term investments, and typically, the more prospects you reach, the more you’ll pay. For example, the more viewers see a TV ad spot, the more expensive the ad usually is.
Inbound investments are more long-term, and the cost is less dependent on the number of prospects you reach. For instance, creating an ebook requires an upfront investment, but that asset will be around for a long time and will continue generating leads long after you make that initial investment.
- Outbound: Outbound investments are short-term, and costs depend heavily on the number of prospects you reach.
- Inbound: Inbound investments are more long-term and are less dependent on the number of prospects reached.
How effective are inbound and outbound lead generation?
The effectiveness of your marketing efforts depends heavily on your unique situation. The tactics you use, your industry, and your target audience all play a role, so there isn’t a one-size-fits-all lead generation strategy.
Outbound is the more traditional marketing method. Companies used to rely on it heavily, and it still works well for many businesses.
The way people interact with companies is changing, though. Due to new technologies and new customer behaviors, people have more choice in which businesses they interact with, and they’re more likely to tune out outbound marketing efforts.
With inbound lead generation tactics, leads that reach out to you likely have a genuine interest in your brand, products, or services since they choose to contact you. So, these leads are also likely better qualified and closer to converting.
Investments in inbound strategies are also typically more long-term, leading to improved return on investment over time.
Should you use inbound or outbound marketing?
If your outbound marketing is working, there’s no reason to stop using it. However, if you notice a decrease in conversions or that competitors are surpassing you, try adding inbound into your strategy.
Even if outbound is working well for you, adding in some inbound marketing may take your lead generation process to the next level.
Many companies find success by using both inbound and outbound methods. Inbound is typically considered more effective over the long term, but it can be beneficial to supplement your inbound efforts with outbound tactics.
You can even combine the two approaches in your interactions with a single lead. You could, for example, reach out to a prospect using an outbound technique and then provide them with inbound content assets, bringing them into your inbound marketing funnel.
Ultimately, what works best depends on your business’s needs and goals. Experiment with various lead generation tactics, track your results, and determine what works best for your unique situation.
It’s also helpful to work with a lead generation agency that can help you try new marketing techniques and determine which approaches work best for you.
Find the lead generation strategy for your business
WebFX has more than 25 years of experience in digital marketing, and we’ve created custom digital marketing strategies for thousands of clients. We can create a lead generation strategy that’s tailored to your business’s needs, track its results, and refine the tactics we use to deliver optimal outcomes.
To get started, give us a call at 888-601-5359 or request a free quote today.