Comparison of Inbound Marketing vs. Outbound Marketing: An Overview

16.11.2017

We’re just a month shy of the year 2018, and given the way marketing has evolved in the past couple of years, we can expect it to get even more complex and competitive. It’s therefore, vital for marketers to understand the depth of the available marketing methods and their underlying differences.

There are different forms of marketing; however, they are broadly classified into two major categories: Inbound and Outbound.

Outbound marketing essentially refers to the age-old promotional best practices that worked in the bygone era of TV, Radio and Yellow Pages. Even today, they still work; but the phenomenal rise in digital media has forced marketers to shift their focus to something more subtle and less intrusive, i.e, inbound marketing.

In recent years, however, marketers are beginning to wake up to the benefits of inbound marketing and there’s no sign of any slowdown in its rise.

Ever wonder why inbound marketing is such a preferred method in today's world?

Here are some of the compelling reasons why most North American B2B businesses are smitten with Inbound Marketing as of late.

Permission-Based Marketing

In the pre-Internet era, outbound marketing was the kind of advertising which interrupted regular programs on TV and Radio. Cold calls from telemarketers, which disrupted work, were also categorized under outbound marketing.

Today, with the Internet being the increasingly preferred mode of information consumption, interrupting ads such as banners and pop-ups are being used to disrupt visitors in their normal consumption of content.

On the other hand, inbound marketing is based on the premise of permission. Businesses using inbound marketing provide their prospects with valuable information and education in order to help them make better decisions. As a result, they establish trust and credibility in their industry, which entices their visitors to respond to a specified call to action (CTA) such as registration, subscription or filling out a form.

When it comes to effectiveness, according to studies, recipients of inbound marketing are 750% more likely to convert than their outbound marketing counterpart.

Informed Prospects Convert Better

It’s easy to convince and convert a prospect that is already aware of your brand and its product and services.

In outbound marketing, the approach is focussed on flashing a juicy ad in front of prospects who have no knowledge of the company. As a result, when a lead interacts with the sales team, their task becomes much more challenging, e.g, informing the prospects benefits of the products and services. This is why, more often than not, the lead conversion rate is very low in outbound marketing. After all, building trust is a long-term affair.

On the contrary, outbound marketing relies on educating and informing the prospects through content—such as newsletters, blog posts, and whitepapers—well in advance. As a matter of fact, the recipient of inbound marketing is savvier about a brand they are seeking to engage with. This makes the task of a sales rep a lot easier while interacting with an informed lead, which often translates into higher conversion rates.

Personalized Messaging is More Efficient

Not all prospects think alike — they have different needs based on their age, gender, income, and lifestyle. A successful marketing strategy boils down to addressing the unique challenges of your prospects through customized messaging, thereby offering the exact solution they’re willing to pay for.

By design, outbound marketing tends to follow a linear strategy, meaning it sends the same marketing message regardless of the demographic diversity. For example, while sending emails to over one thousand leads seems fast, it’s unlikely to work.

Inbound marketing, on the other hand, focuses on crafting customized messaging based on the demographic data and mapping the location of the prospect in their buying journey. The highly personalized marketing message will reach a lead who is already familiar with your brand, products, and services. No wonder why, they are more likely to engage with your message.

HubSpot, the industry lead and a pioneer in inbound marketing software, is able to generate a whopping 50 thousand leads a month, thanks to its super information and educational blog. Moreover, the company through its unique inbound lead generation strategy has earned over $100 million in just eight years.

Immeasurable vs. Quantifiable

Gathering customer engagement data is critical to improving your marketing interface in order to fix the loopholes and boost customer engagement.

Outbound marketing follows an archaic approach—such as surveys, pop-ups, and emails— to collect customer data. Such interruptive methods deter unsuspecting visitors from sharing information. Moreover, the information collected with such methods may not measurable.

The inbound marketing, however, employs a sophisticated method to gather customer engagement data. For example, with analytics, you can track which blog posts or CTA buttons certain actions have occurred. Moreover, the collected data can be filtered and classified for further analysis, which makes the data not only quantifiable but actionable as well.

Inbound Marketing Generates More Leads

A marketing strategy is only as good as the results it produces. No matter how cost-effective or advanced a promotional method is, it means nothing to your business unless it yields a sustainable ROI.

In terms of effectiveness, outbound marketing falls way behinds inbound marketing. Due to outdated methods such as blasting emails to a thousand of customers at a time, outbound marketing doesn’t produce encouraging results. For example, according to a study, only 56% of direct mail sent ever gets opened.

Moreover, the close rate in outbound marketing (1.7%) pales in comparison to that of inbound marketing (14.5%).

As a matter of fact, companies that publish engaging blog content can earn 67% more leads on a monthly basis than those who don’t.

In short, inbound marketing trumps outbound marketing in terms of generating 54% more leads.

Inbound Marketing Saves Money

Just when you think all these potential benefits of inbound marketing will require a higher marketing budget than they do in outbound marketing, it’s actually quite the opposite.

According to State of Inbound Marketing 2012, the cost per lead in inbound marketing is 61% lower than that of outbound marketing.

Moreover, North American B2B companies save an average of $20,000 per year by investing in inbound marketing.

Final Thoughts

Regardless of the umpteen benefits of inbound marketing, don’t just underestimate the power outbound marketing just yet. If your marketing budget is big enough to accommodate both kinds of marketing, use them wisely. However, if you have a shoestring budget, and long-term relationship with your clients is critical to your business model, inbound marketing is the best approach out there.

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About the Author

Susanta Sahoo is founder and chief content marketing strategist at Top League Technologies, a digital marketing start-up in Bhubaneswar, India. By offering SEO consulting services, he helps SMB’s build their online presence and boost ROI. Follow him on Twitter: @ugosus.

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