Marketing is the process of promoting a business’s products, services, and value to existing and potential customers. Companies rely upon their marketing strategies to grow their revenue and increase their market share.
This involves employing multiple marketing strategies to establish and grow the company’s brand with the ultimate goal of increasing the company’s customer base. Today’s companies have the option of running both inbound and outbound marketing strategies.
Why the difference Between Inbound vs Outbound Marketing is Important
Understanding the difference between inbound vs outbound marketing is critical to measuring a company’s marketing return on investment (ROI). Since marketing requires money, companies must be able to measure the success or failure of their marketing strategies. This means tracking the number of leads the marketing strategy generates and how many customers come from those leads.
When companies increase the number of leads and customers for every dollar they spend on a marketing strategy, they are effectively increasing their marketing ROI. This is why companies are continually trying to improve the effectiveness of each of their strategies.
These marketing approaches are completely different in how they attract and reach customers. Choosing between the two – or using both simultaneously – ultimately comes down to defining the company’s target audience and choosing a strategy that is ideally suited to reaching and engaging that audience.
What is Inbound Marketing?
Simply put, inbound marketing is online marketing. An all-encompassing inbound marketing strategy requires a multi-channel approach where thought-provoking and engaging content drives targeted traffic to a company’s website.
These channels typically include the company’s website, blog, chosen social media platform, videos, webinars, podcasts, press releases, case studies, whitepapers, infographics, images, and any online advertising strategy the company decides to use.
Defining the company’s target audience is the all-important first step in determining which digital channel to use. The company then must define the individual buyer personas that make up that audience. The goal of the company’s content is to target these buyer personas at different stages of their buying journey. Providing focused content at each of these stages helps to guide the customer towards a purchase.
Success with inbound marketing requires in-depth keyword research. These keywords are used by people when searching for products or services online. All of the company’s digital strategies must be keyword-optimized to improve the website’s ranking in online searches. This means the company must have a search engine optimization (SEO) strategy where every aspect of its content and website is optimized for online searches.
The Benefits of Inbound Marketing
Inbound marketing is ideal for reaching today’s audiences. Consumers are connected and mobile like never before. They are constantly using social media and their mobile phones to stay in touch with friends, family, co-workers, and other like-minded individuals.
Some estimates state that people spend upwards of 6 hours a day online. Ultimately, having an inbound marketing strategy is critical to competing in today’s marketplace.
Given how popular inbound marketing has become, companies must temper their enthusiasm with the reality that it takes time before results are forthcoming. Companies are constantly creating new content and the competition for today’s online audience is always increasing.
However, once those results come in, they are often easier to track when compared to certain outbound marketing strategies. Companies can analyze the results of each of their digital channels with pinpoint accuracy, which often makes analyzing ROI a much simpler process.
The Challenges of Inbound Marketing
The largest challenge facing companies that use inbound marketing is the sheer volume of competition they face. This means companies must take a long-term view towards their inbound approaches.
Companies must understand that it takes time for the company’s content and website to attain a certain PageRank with online search engines.
Another issue companies face is assuming that online marketing is a single-use marketing strategy. It isn’t. Inbound marketing is not a static marketing initiative. Companies cannot simply put up a website, generate some content, and assume that traffic will increase on its own. Success requires a committed digital marketing team that is constantly producing engaging content, while also maximizing the performance of individual website landing pages.
What is Outbound Marketing?
Outbound marketing is viewed as the more traditional form of marketing. These strategies include print advertising such as brochures, catalogs, flyers, and direct mail. Other strategies include billboard advertisements, T.V., radio, trade shows, conferences, exhibits, and face-to-face visits.
Whereas the goal with inbound marketing is to reach a company’s audience as they search online, outbound marketing aims to capture the audience’s attention with advertisements and product placements.
In this case, inbound marketing can be seen as providing messages to incoming customers, whereas outbound marketing can be seen as pushing the marketing message outwards to customers.
The Benefits of Outbound Marketing
The benefits of outbound strategies vary depending upon the type of business, market, and industry. Companies in a business-to-business (B2B) market, or business-to-government (B2G) market, will see faster results from strategies such as cold-calling, trade shows, conferences, exhibits, and face-to-face visits.
This is because the engagement with the customer is immediate. The buyer/seller discussion is fluid, so the marketing and sales team can uncover opportunities by asking the customer leading questions.
However, for business-to-consumer (B2C) markets, the benefits of traditional marketing must be viewed from the cumulative effect of adopting multiple print, T.V., billboard, and radio advertisements. It’s the combination of these outreach strategies that help to build the company’s brand.
This requires a consistent message to market so that consumers are constantly made aware of the company’s brand and offering.
The Challenges of Outbound Marketing
Some of the more recognized outbound strategies greatly exceed the marketing budgets of small to medium-sized enterprises (SMEs).
This means outbound strategies like T.V., radio, and large print media are typically the domain of well-established brands and large corporations. SMEs typically cannot afford to enact a nationwide T.V. advertisement campaign.
However, they can use smaller outbound campaigns for local audiences and focus on in-person discussions.
Additional challenges relate to tracking the results of certain outbound initiatives. Tracking the number of leads and opportunities that result from trade shows, conferences, and exhibits is easy compared to the leads and customers that result from T.V., radio, and large print media.
In many instances, the customers themselves aren’t quite sure which of these outbound strategies (T.V., radio, and print) finally convinced them to move forward. Customers often state that it was the cumulative effect of seeing these marketing messages that eventually forced them to make a purchase.
Key Differences Between Inbound and Outbound Marketing
Ultimately, the difference between these two strategies relates to how the audience is engaged.
Inbound marketing requires that engagement occur online where potential customers use keywords in search engines.
Outbound marketing requires the engagement to be in-person for trade shows, conferences, exhibits, and cumulative for T.V., print, radio, etc.
1. Time Frame
Inbound marketing can often take upwards of a year or more before providing consistent returns.
As such, inbound marketing must be viewed as a long-term investment. It takes longer to generate opportunities and leads through inbound approaches compared to outbound approaches. However, the company’s content will continue to develop those leads and win new customers long after its published date. Companies can then tweak their content to improve results even further.
An outbound marketing strategy – such as a trade show or conference – will generate faster returns, but it is a single-use marketing strategy.
After all, the trade show or conference can only generate a finite number of leads. To generate the same results, a company must continually attend these trade shows and conferences or continue to run their print, T.V., and radio ads.
2. Return on Investment (ROI)
Over the long term, inbound marketing generates a higher marketing ROI when compared to outbound marketing.
This is because of the relatively low costs of inbound marketing compared to its outbound counterpart. Once a company’s content and website have been crawled and indexed by search engines, it becomes a permanent fixture that generates opportunities long into the future.
The ROI is further increased when individuals share that content with friends and family members through social media.
3. Scaling
Inbound marketing is more scalable compared to outbound marketing.
This is because today’s brand champions use social media to share their positive experiences with friends and family members. In turn, those individuals are more likely to try the product. Once they do, they will also share their experiences online which compounds the effect.
4. Outreach
Ultimately, in terms of measuring outreach, an argument can easily be made on behalf of both approaches.
With outbound marketing, the company can use its sales and customer service teams to continually drive home the company’s marketing message.
However, inbound marketing can reach today’s global audience regardless of where they’re located and continue to engage them all through their buying journey.
Why Is Outbound Still Effective?
Outbound marketing is still an extremely effective form of marketing.
The engagement with customers is immediate and companies can use their outbound strategies to uncover additional opportunities.
They can also use their newly-found insight to improve their product and service offering. In addition, calculating ROI is faster. A company can quickly ascertain its cost of leads after attending a trade show, or conference, as opposed to a content marketing strategy that may take a year or more before results are available.
Understanding Customer Needs
Outbound marketing often provides insights that inbound marketing simply cannot. This is because of the customer-centric focus of outbound marketing.
So much of what makes outbound strategies work for B2B and B2G audiences is the interpersonal relationships that are fostered through outbound approaches.
This means companies can have open-ended discussions with customers that provide invaluable insight into the strength of the company’s products and services.
Is Inbound or Outbound Marketing More Effective?
Answering this question largely depends upon the situation and the resources available.
There are markets and industries where face-to-face customer interactions are still the dominant means of lead generation.
Conversely, there are markets and industries where the only viable means of reaching customers is by having a proactive online marketing strategy.
In the end, it’s less about which is better, and more about which one best applies to the audience being targeted.
Creating a Sales Funnel with Inbound and Outbound Marketing
Instead of comparing these two approaches, it’s better to ask how both can complement one another. Creating an all-encompassing opportunity funnel by leveraging both marketing strategies means the company is constantly engaging its audience, regardless of where they’re online or not.
A perfect example includes taking the leads generated by trade shows and then following up on those leads with focused content and other online marketing initiatives. Another example includes providing focused content such as email marketing after a customer visit.
In the end, the companies that achieve the best marketing ROI are the ones that find a way to combine both approaches.
They use their strong buyer-seller relationships to duplicate their efforts. The insight they gain from in-person discussions, and other outbound strategies, help them to further hone their online marketing message and improve their content.