Inbound Vs Outbound Leads: Decoding The Differences
Inbound vs outbound leads — which to choose? Strike the right balance, and you’ll build an efficient pipeline of sales leads who convert into long-term customers. Over-invest in either, and you’ll likely spend more money acquiring the customer than you’ll earn in their customer lifetime.
What Are Inbound Leads?
Inbound leads are potential customers who are already interested in your product or service. They may discover you through social media, your SEO efforts, or organic traffic. Your inbound sales leads are seeking more information about your products, or they want a solution to a specific problem they already know you solve.
Pros and Cons of Inbound Leads
There are several advantages and disadvantages to inbound lead generation. The advantages of this type of lead gen mean you enjoy access to a category of leads that are further along in the buying process. They already know about your product, have some level of confidence in your brand, and are more likely to listen to a sales pitch.
Unfortunately, there are also some challenges to inbound lead generation, as it can be time-consuming to create valuable, relevant content that builds a strong online presence. You may also encounter significant trial and error in reaching your target audience because you could still be exploring your ideal buyer persona and researching their needs.
Overall, inbound marketing tactics like content marketing cost 62% less than traditional marketing, while bringing in higher quality leads that have more trust in your business and are more likely to convert.
Best Practices for Nurturing Inbound Leads
Some best practices for B2B lead generation that ensure you continue to build a meaningful relationship with these potential customers include:
- Providing continuous resources to educate leads about your products
- Interacting with incoming leads on their schedule
- Following up on questions and concerns in a timely manner
- Using lead scoring to gauge lead interest and potential
- Developing a multi-channel approach for more frequent, subtle contact with leads
Inbound marketing is a long-term play, requiring investments in brand building and continually providing value for your potential customers. It’s not a quick win, but it is a worthwhile one.
In addition to building out the automations and workflows behind inbound campaigns, revenue operations teams can analyze the effectiveness of your efforts, identifying the types of content that bring in the most qualified leads and where to allocate resources.
What Are Outbound Leads?
Outbound lead generation focuses on your outreach to prospective customers. You might use cold calling, direct mail, advertising, email marketing campaigns, and social media outreach to create robust outbound marketing strategies to reach people who may need your product but aren’t actively looking.
Pros and Cons of Outbound Leads
While it is the more proactive approach, there are still pros and cons to an outbound sales strategy. You need to do a lot of research before sending out a cold email sequence or calling a lead. You should qualify sales leads on your list to determine whether they need your product, have the budget to buy it, and have the authority to make a purchasing decision. Sales methodologies like BANT or MEDDIC are commonly used to reduce outreach to leads unlikely to convert. If your outbound strategies are targeted toward your ideal customer with personalized outbound marketing efforts, you’ll have a better chance of moving them into closed/won. However, outbound leads are likely to say "no" four or more times before saying “yes” — making sales follow-ups crucial to winning over outbound leads.
The big disadvantages to outbound lead generation include:
- Cost: Direct mail, telemarketing, and advertising are expensive, not to mention the lead management tools and CRM platforms typically needed to run successful outbound campaigns
- Lead quality: It can be difficult to ensure you’re targeting the right people who actually have the buying power
- Resistance to outreach: Spam detection and call screening block sales calls, while open and reply rates on cold emails are typically very low
Best Practices for Nurturing Outbound Leads
Since you’re most likely dealing with cold leads, there are a few ways to get a jumpstart on warming them up, including:
- Social selling through platforms like LinkedIn helps you make a more human connection
- Account-based marketing that tailors your strategy for individual customers
- Partner marketing that utilizes joint campaigns with other trusted companies
- Provide relevant podcasts, blogs, and webinars directly to leads through your outbound channels, like email sequences or follow-ups to cold calls
Key Differences Between Inbound and Outbound Leads
You can probably spot some of the key differences between each type of lead and lead generation method. However, I can simplify these differences even further by analyzing their approach and focus. While inbound lead generation focuses on attracting customers through valuable content, outbound lead generation utilizes interruptive tactics to snag their attention.
In other words, inbound pulls leads in through your branding and messaging, while outbound pushes your message out to those who might not have heard it yet.
Inbound marketing strategies also prioritize educational experiences and don’t focus as much on sales. They strive to build relationships with customers and help them make more informed decisions. Alternatively, outbound tactics are all about sales, aiming to find leads through proactive outreach.
Take a look at the metrics below from Demand Metrics and HubSpot to compare the costs, time period, lead qualification efforts, and scalability of inbound vs outbound leads.
Strategies for Maximizing Both Lead Types
Most SaaS companies use a mix of inbound and outbound lead generation, plus other strategies like partner-led growth or product-led growth. Lead generation isn’t one size fits all, but these strategies should help you find the most effective route for your business.
Hybrid Models
This complementary approach creates a sales strategy with both lead generation methods. While inbound leads through search engine optimization may deliver a steady stream of leads over time, PPC ads can boost your contact lists more quickly. You’ll need to customize your approach based on which lead you’re dealing with to address their specific customer journey.
Leveraging Technology
There are a ton of tools that can organize, manage, and automate your lead generation strategies. The top lead generation software options include offerings from companies like HubSpot, LeadsBridge, Overloop, and Dealfront — each designed to target a specific type of lead generation and certain contact preferences.
For example, sales reps use Overloop for the automation of cold email campaigns, LeadsBridge for CRM-integrated content creation and digital marketing, and Dealfront for converting B2B leads.
RevOps support can be critical when leveraging technology. From choosing the right platform, to setting up workflows, enabling the sales team, and measuring effectiveness of the tools, your RevOps team can help optimize the process and shorten the sales cycle.
Data-Driven Decision-Making
If you’re drowning in a deluge of data from reports and analytics, RevOps comes to the rescue by helping you gain a deeper understanding of your data and putting those numbers into the context of larger market trends and your role within them.
Advanced analytics tools provide the narrative you need to ensure you’re aligning sales, marketing, and customer success teams in a way that optimizes your sales funnel, marketing tactics, and the entire customer lifecycle.
Measuring and Analyzing Performance
So how do you figure out which lead generation method is best for your organization? By taking a look at a few key performance indicators, analyzing the possible return on investment, and testing different strategies for success.
Key Performance Indicators (KPIs)
Take a look at the key performance indicators for your organization. These may include the number of phone calls made, emails sent, new leads acquired, or appointments booked. How is each lead generation strategy performing according to your company metrics? Ask yourself whether the KPIs you’re tracking are the ones that actually move the needle for your company. Incentivize and invest in the activities that truly result in sales.
Return on Investment (ROI)
How much money are you spending on each lead generation method and what do your returns look like? While inbound lead generation is a bit more cost-effective and can deliver more qualified leads, it takes a longer period of time to see the results. Can you afford to wait it out to get better leads?
You can do some forecasting here to get an answer before you commit too many resources, but you can also turn to A/B testing for real-world results.
A/B Testing for Strategy Optimization
Using Google Analytics or your CRM software, you can get real-world benchmarks for both inbound and outbound lead tracking. Quickly test to see which subject lines have a higher open rate, which calls to action have a higher click-through rate, and which types of content have more form completions. Use the data to guide your strategy.
Common Mistakes and How to Avoid Them
There are several pitfalls for both marketing strategies. Don’t let the benefits of inbound and outbound lead generation go to waste by falling into these traps.
Lack of Personalization
HubSpot found that personalized CTAs convert over 40% more prospects than generic calls to action. When you don’t personalize content based on where a customer is in the buying journey or what their demographics are, you’re pushing prospects and leads away by making them feel like you don’t understand their needs.
Fix this problem by spending time creating a variety of landing pages and CTAs that speak to different types of prospects throughout the sales process (or A/B test them as mentioned above). The same goes for your cold outreach. Research an individual or organization and address their pain points to show them you’ve looked into their specific concerns. Personalization in more important than ever with the rise of generative AI. Show your prospects that they are engaging with a real person who understands their business needs.
Ignoring the Data
You might feel that drilling down into the analytics is daunting, but your data has so much to share with you. You don’t want to spend a ton of money on ads or website development for the wrong demographic. Data analytics can help you create your ideal buyer persona and show you exactly how each of your lead-generation tactics is performing.
In addition to tracking open rates or website views, you may want to invest in behavior tracking that can show you where your leads came from (tracking code), what on your website interests them most (heat mapping), and which pages they visited so you can follow-up with them in a more personalized way. The deeper data can uncover how your prospects think, helping you optimize your touchpoints and convert more leads.
Inadequate Follow-up Strategies
Speaking of following up with leads, this is another serious concern with both inbound and outbound leads. Whether you don’t follow up quickly enough or often enough, you may end up losing a lead to a competitor.
Develop a follow-up strategy that includes appropriate timing, valuable information, and a clear call to action. For example, say you miss a call from an inbound lead. A speed to lead of five minutes or less means you are 100x more likely to successfully connect with your prospect. Don’t let them lose interest or move on to your competitors because you didn’t respond quickly enough.
Studies also show that it takes an average of eight touches to get a response from a lead. Reach out through multiple channels at consistent intervals to establish brand awareness, leveraging email, phone, and social media platforms. Lastly, you want to follow up with something of value. Answer a question, provide a solution to a problem, or send them an offer for a free trial.
Next Steps
While outbound and inbound lead generation provide different strategies for acquiring new customers, each sales team has to test for themselves which tactics will work best. Whether you’re interested in attracting potential customers with relevant content (inbound lead gen) or you’re cold calling a bought contact list (outbound lead gen), you can blend both and create an effective approach to meeting your goals.
Find the right balance by using reporting and analytics to track KPIs and metrics, adjusting as needed to keep up with buyer demands and market trends.
And if you need a resource that helps you keep up and stay informed, The RevOps Team is here for you. Subscribe to the newsletter for weekly insights from the experts straight to your inbox.
Frequently Asked Questions: Navigating the Lead Labyrinth
How do I decide between inbound and outbound leads?
You don’t have to think of your options in black and white, inbound vs outbound leads. You can blend several types of lead generation. However, if you’re looking for a place to start, here are my recommendations:
- Choose inbound strategies if you prefer acquiring warm leads through content creation, you’re willing to wait for your leads to come to you, you sell to a wide range of customers, and you prefer leads who choose to interact with your organization.
- Choose outbound lead generation if you already have a list of leads, you want to reach more people in less time, and you have a large budget to spend on acquiring, sorting, and qualifying new leads.
What are some advanced techniques for nurturing both lead types?
Some advanced lead nurturing techniques include retargeting, surveys, and email nurturing.
Whether a lead found you on social media or signed up to your email list at a trade show, retargeting means you contact them again through various channels, including paid ads, to provide additional information. Avoid sharing old news your leads already know.
Surveys are a very nuanced type of nurturing, as there is an appropriate moment to reach out during the buying journey. Don’t pitch your product too early. Instead ask relevant, unobtrusive questions that will direct your future actions.
With email nurturing, you have a cost-effective way to re-engage leads. You can more easily manage most campaigns with automated sequences that send out relevant content to specific segments of your email list.
What’s the role of RevOps in managing inbound vs outbound leads?
RevOps is an essential part of lead management because it helps you align all your operations in customer success, sales, and marketing. The actions and reactions of every team all move toward the same goal with the help of a centralized source of data, advanced analytics, outreach automation, and implementation planning and guidance.