Inbound Vs. Outbound Leads: Major Differences

What does a business thrive on? Leads, of course! More prospect leads mean more paying clients, more revenue, and a stellar reputation for your business.According to Bright Talk research, as reported by Startup Bonsai, 53% of marketers spend at least half their budget on lead generation (as illustrated below).

However, lead generation is still perceived as one of the biggest challenges for a business, by 61% of marketers, according to HubSpot.This is where you can benefit your organization by figuring out what lead generation strategy works best for you. Both inbound and outbound lead generation have their merits, but which is more effective for growing your business faster and better? Marketing and sales professionals across the globe have their perspectives about inbound vs. outbound—but there is no “one-size-fits-all” advice for acing the lead gen game.Before you decide on what’s best for your business, you should understand the differences between inbound and outbound lead generation strategies and how to utilize them appropriately to fill your sales pipeline.In this blog, I will talk about what inbound and outbound leads are, the major differences between them, when to use each lead gen strategy effectively, and ultimately which one is better.Let’s get started!

What are inbound leads?

As the name suggests, inbound leads are prospect sales leads that approach you directly. These consumers find out about your products or services from the various marketing initiatives and sales campaigns, driving your ideal consumers to your website or your social media channels. You can also drive inbound lead generation through search engine marketing that advertises your business to large audiences. A few of them might approach you after they receive referrals.In inbound lead generation processes, clients possess the power to decide whether to buy from you; chances are they’re checking out several businesses in the niche and would choose the best option based on their needs. Engaging them and satisfying their interest in learning more about you play a significant role in converting them into opportunities that ultimately translate into becoming your loyal customers. They choose how many contacts they want with your business and whether or not they want to get in touch with you.

What does inbound lead generation involve?

Inbound lead generation is highly focused on communicating the value proposition about your brand and its products or services and understanding the prospect’s needs on a deeper level. This is where content marketing plays the most significant role—content marketing brings you 3x more leads compared to traditional marketing practices while reducing the cost of lead acquisition by 62%.Here are a few methods to generate inbound leads:

• Teach potential customers about your goods or services;
• Encourage your audience to communicate with you via. social media channels;
• Focus on producing valuable content that generates demand; and,
• Come across as an organization respectable of consumer privacy (i.e., don’t SPAM!)

What are outbound leads?

Simply put, outbound leads are prospect sales leads that you initially contact and actively pursue until you get a response at their end, positive or otherwise. It frequently takes paid advertising to specific target markets, mainly through social media marketing and search engine advertising platforms, to draw in outbound leads. You can also pursue outbound leads by learning more about a handful of prospects and getting in touch with them personally. You can do this by using techniques like cold calling, cold emailing, postal service (a.k.a. traditional mail), publicised advertisements (on TV, radio, etc.), and offline events.In the case of outbound lead generation processes, you have the selection of ideal clients to choose from and control your frequency of communication with them. The tricky part is investing more time in nurturing these prospect leads since they are initially hesitant to make a purchase (because this might be the first time they hear of you.

What does outbound lead generation involve?

Outbound lead generation processes need to be majorly centered around generating brand awareness and have specific criteria to employ that help source ideal leads who may be interested in purchasing what you're trying to sell. One of the most popular outbound marketing and lead gen practices are paid advertising—according to Hubspot, 68% of marketers cite paid advertising as an essential tactic in their overall marketing strategy.Here are a few methods to generate outbound leads:

• Pitch to leads about your goods or services;
• Encourage one-way dialogue with your audience;
• Create paid advertising campaigns and other marketing initiatives (within a fixed budget), targeting a broad-spectrum audience instead of customer personas; and,
• Interrupt the lead with your messaging (and make it enjoyable, so they reach out to you just out of curiosity).

Differences between inbound and outbound leads

There are a lot of factors that contribute to differentiating inbound and outbound leads. In this section, we will talk about inbound vs. outbound leads based on:

1. Their speed of execution
2. Timing
3. Targeting
4. Awareness
5. ROI
6. Overall quality

Let’s begin.

1. Speed of execution:

Inbound leads -H harnessing inbound leads takes time if you rely on natural channels like search, referrals, or word of mouth. It is a more sophisticated strategy, and one way to accelerate the outcome of inbound lead gen is to establish marketing alliances. Inbound lead generation heavily relies on content production, which is time-consuming to produce, distribute, and gain attention.Many promotional channels are also essential to amplifying material in the current competitive environment, which also multiplies your management and promotional chores.Outbound leads -You could start an outbound campaign right now, meaning you could stop reading this, and go gather your team to strategize and probably launch one by the end of day!Running outbound lead-generating campaigns has minimal restrictions, and your lead flow will move considerably more quickly. In addition, outbound is a simple way to bring in more leads right now if you're skilled with email copy, email tools, and list-building.Key takeaway - If speed is of the essence here, outbound is a clear winner. Not only can you improve the lead speed for launch, but you can also gauge customer reaction within weeks, and not months.

1. Timing:

Timing is crucial in both inbound and outbound lead gen strategies. An active buying cycle can extend to 6-12 months, on the minimum; therefore, it is an extremely vital metric when you’re choosing between inbound and outbound lead gen processes.Inbound leads - An inbound lead often has a much quicker sales cycle because they have done more due diligence on their problems, the available options and solutions, and their faith in you (otherwise, they wouldn't have contacted you in the first place).Outbound leads -In case of outbound lead gen, you need to figure out how to narrow the trust gap with the people you contact, who are unlikely to be in a buying cycle right now, are unlikely to know you, and are virtually certainly not familiar with you. Outbound requires you to do this work one-on-one with every lead who reacts to your ads, whereas inbound accomplishes most of it for you.Key takeaway - Inbound clearly wins the timing game because of one simple reason—your prospect lead already considers you as someone who can fulfill their needs (that is why they contacted you, no doy!).

2. Targeting:

Inbound leads -Anyone strategizing an inbound lead gen initiative must study buyer personas, demographic targeting, or account-based marketing in depth. Ans although these familiar concepts can all guide your inbound strategy, none of them come with a lead guarantee.You have little power over the folks you use to reach through inbound lead generation campaigns. The quality and precision of targeting are influenced by the platforms on which you market my content, how you develop it, and your positioning statement. But in the end, whether your products or services can assist them or not, it's up to other people to manage the lead flow.Outbound leads -Targeting is laser-sharp and very powerful, with outbound reach out initiatives. You can specifically apply filters with tools like the LinkedIn Sales Navigator and target ideal customers who fit your lead criteria and may be interested in your products or services. For example, if you want to focus on marketing executives from content marketing agencies with 10-100 employees in the US to sell your automated content generation tool—you can go right ahead and do that!You can also target specific customer accounts through account-based marketing campaigns. This is how it works: You list your fifty dream companies who can be ideal clients and reach out to their key stakeholders individually to get their attention.Key takeaway - Your inbound lead gen initiatives may attract the right clients, but outbound gives you control to make it happen with greater certainty.

3. Awareness:

As for awareness, let’s first take a look at Eugene Schwartz’s model of the stages of awareness, as illustrated below:

This is critically involved in understanding and, ultimately, shortening the sales cycle. In order to help someone who doesn't recognize they have a problem, you must first inform them of it and help them recognize the pain it is causing them.Now let’s talk about awareness in terms of inbound vs. outbound leads.Inbound leads -The two most likely methods you'll obtain an inbound lead are, through referrals or when someone comes across your content and approaches you. The person is certain they have a problem in both situations. In addition, they are positive there is a fix.Outbound leads -Forget a high awareness level, these prospects may not even know you exist or how your products or services may benefit them. You won't get a reaction from people who aren't problem-aware in the first place. You might receive a reaction from those who are aware of the problem but not the solution, but you'll need to spend a lot of time educating them.A lengthier sales cycle and significantly more hands-on work are required throughout the sales process due to the disparity.Key takeaway -Potential customers that come to you through inbound will be considerably more aware of their issues, the available solutions, and the possibility that you may help them, as clearly evidenced above. Therefore, inbound leads clearly win this.However, with outbound leads, you may have to enhance the possibility that the prospects have a higher level of awareness with the correct targeting and by using buying signals to create your prospecting lists.

1. ROI:

Inbound leads -Returns on investment varies greatly in regards to inbound lead generation. It depends on multiple factors, including target customer personas, offers (on products or services), presentation, timing, client’s budget, etc.However, compared to outbound leads, inbound leads have staying power. A lead that comes to you through a referral trusts you based on the results you’ve brought in for their fellow client. You already have credibility with them. The content you create or the relationships you build compound your authority over time in your niche and consequently compound your revenue. The process is slow, but the payback is insane.Outbound leads -Since outbound is fast, you can create a list of qualified prospects in a relatively shorter time if you invest money into the right kind of marketing automation and omnichannel marketing tools.You will have to spend a lot of time keeping track of outbound prospects because it is rare that prospects in your outbound campaign 1) trust you or,2) are prepared to buy right now. Most outbound prospecting salespeople work their leads using an 8–15 touch methodology.As a result, generating a list and then sending 5 emails, a LinkedIn request, a Twitter message, and a LinkedIn is more effective than building a list and sending one or two emails to each person. Or more DM. Once these initiatives are launched, a significant amount of time is required to run them.Now, you can buy time by outsourcing most of the work, but over time, outbound campaigns may be rendered ineffective, given that they didn’t have a foundation of trust. So, even if you close leads and their businesses, you would likely be unable to retain them if you don’t produce the desired results.Key takeaway - The number of leads you get translates to vanity metrics, but the businesses you retain put food on the table. The winning strategy heredepends on your mindset and perspective.Inbound requires a significant initial investment of both your time and energy. But, once your connections and content are made, you can utilize them repeatedly, frequently for years.Outbound needs a steady and ongoing commitment in the campaigns you develop and the backend labor involved in lead follow-up.

2. Overall Quality:

If you’re a B2B SaaS content marketing agency, you have a large section of ideal prospects to chase for work opportunitiesea. If your synergies don’t match, you could go looking for the next best thing. This model reeks of instability.However, if a B2B SaaS product company approaches you with an urgent need for your product or service, after having viewed your content—they will trust your processes and the results you can bring them. They contacted you out of their own volition and this speaks volumes after they consider you an authority in your niche—the only thing left for you to do is to convince them that they are right (and everybody loves to be right!).This is why inbound leads have higher quality than outbound leads. Outbound leads can be great or terrible, depending on the situation. With outbound leads, you have complete control over who you contact, giving you greater confidence that they are a good fit for your company. However, they might not be prepared to buy right now; they may not even be very aware of their issue or the remedy, and they probably won't trust you. In case of inbound leads though, there is already a significant amount of understanding that the prospect possesses about your product or service. They approach you, knowing you can help out in their time of need. This almost entirely ensures that they would be primed to be converted into a paying customer.

Inbound lead generation - Pros and cons

Pros:

1. You come across as “helpful” instead of salesy:

Employing an inbound lead gen strategy means you are carefully placing yourself to be available when needed. You put out content that adds value to your customer, and this makes you look “helpful” instead of annoying to your prospect leads. Your customer’s perception of you is a big concern, and it can have a huge long-term impact on your culture (in a good wa

2. Genuine feedback collected:

With inbound leads, the feedback may take some time, but you can have more certainty about what’s working and what’s not. You will also gain a better understanding of search intent.

3. You gather a realistic POV:

Inbound encourages you to be more practical when it comes to your position in the market and where to focus your efforts. You become aware of where you should or shouldn’t compete. It's actually helpful to discover where to focus your energy and effort as soon as possible so you don't spend as much time. Once you've worked with inbound marketing for a while, you'll begin to be able to spot some situations where you shouldn't waste any time, not even experimenting.

Cons:

1. It’s a marathon:

Inbound lead gen is a marathon, meaning that you have to dedicate considerable time to the process before you start seeing results. The social media channels you use keep changing their algorithms and your customers have constantly evolving expectations when it comes to communicating with you. In this scenario, you have to keep up with all that and beat your competitors whike at it, to make each conversion!

2. You cannot always find precedent:

You can be someone launching a completely new product in the market that no one’s ever really heard of (or figured they need). For a product or service with no demand, inbound will not work. The only way for you to generate demand is by branching into various outbound strategies.

3. It requires specialist knowledge:

Inbound marketing requires you to be an expert at not just marketing or sales, but with the product or service, you’re selling too. Of course, prospects approaching you require your service or product, but chances are, you have a bunch of competitors who your leads are also evaluating. The only way to stand out here, is to satisfy their curiosity and convince them with your expert knowledge that they’d be best off using what you’re selling.

Outbound lead generation - Pros and cons

Pros:

1. You can reduce the time it takes to qualify leads:

Since you’re already hitting a target market and instating more specific lead criteria, the outbound leads that turn into opportunities are automatically sales-qualified. This helps you save time you’d otherwise spend verifying whether the lead is actually up for investing in your product or service.

2. You can generate as many leads as you want:

The control lies with you; there’s no one to stop you from contacting thousands of ideal prospects and putting your brand and its offerings in front of them. Outbound lead gen is the fast track to fill your sales pipeline in the shortest duration possible.

3. Have multiple methods for reachout:

In the case of inbound lead gen, you mostly generate awareness with your content; however, in the case of outbound leads, you can contact them using multiple methods. These include cold calling, cold emailing, sending a personalized letter (accompanied by a nice customized gift) right to their physical mailbox, running ads on TV, radio etc. and much more. This increases your chances of catching their attention manifold.

Cons:

1. Large volume of prospects to work with:

Better not bite off more than you can chew! If your outbound strategy is successful, you can end up being swarmed by leads. In addition, focusing your attention on multiple accounts can get sloppy, and you might not end up converting even one of th

2. It can get expensive:

You can buy time with money in case of outbound strategies—you can outsource audience research and acquire sophisticated tools. Heck, you can even buy prospector lists. The most popular method is paid advertising. Remember to have a fixed budget for your outreach campaigns.

3. Prospects may not need to buy:

You are indeed reaching out to your ideal clients, knowing that they will have use of your product or service—but you don’t know if they will see it that way. Perhaps they do not have an urgent need for what you’re selling, or they are already using the same product or service from a competitor brand? You never know! This reduces your chances of making a sale with a guarantee.

Final Thoughts

Here’s the thing. Both inbound and outbound leads have their advantages and disadvantages. Outbound is old-school, but if done right, it can still bring you tons of opportunities. And inbound leads need a lot of work, but when you close one, it usually stays with you, helping your business generate revenue long-term and build trust in the market.So, should you choose one over the other? The most actionable advice is combining both to make an all-around effective lead generation strategy.While dealing with outbound leads, you usually have control over time. Still, in case of inbound leads, you need to be fast about keeping them moving along through the sales pipeline—remember, even if a prospect lead has approached you, they may also be evaluating  your competitors for the same products or services.This is where you can use RevenueHero, to turn that prospect leads into ready-to-invest opportunities quickly.This sales acceleration platform qualifies leads and routes them to the sales rep best prepared to handle them, schedules instant meetings with qualified leads, and even prioritizes them based on their value propositions. You may turn as many inbound leads into sales opportunities as you like, using this CRM automation tool. It comes with a solid lead scoring system and easy integration with every product in your GTM stack, ensuring that your sales funnel always stays filled with ideal leads.Wish to learn more? Check out the platform!

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