The Problem With Scale: Inbound vs. Outbound Marketing

Demand Generation
Marketing Operations
Sales Enablement
February 26, 2024

For the past ten years, inbound marketing has dominated the attention—and the budgets—of marketing and sales teams at B2B organizations. It’s not difficult to see how inbound became the belle of the marketing ball: prominent vendors like Hubspot and Marketo have been incredibly vocal about the benefits of inbound marketing as compared to outbound.However, while inbound certainly does have its place in the marketing ecosystem, B2B organizations that buy into the hype and focus their marketing strategies exclusively on inbound channels make a critical error. When it comes to growth, inbound isn’t nearly as cost-effective or scalable as it’s touted to be.Several common misconceptions plague the inbound vs. outbound marketing debate. Below, we examine why B2B organizations should incorporate outbound tactics as an essential piece of their growth strategies.The precise mixture varies depending on industry, average deal size, and more, but a sustainable, scalable, and predictable marketing strategy should contain complementary elements of outbound and inbound.

Inbound vs. Outbound Marketing Misconceptions

A common critique of outbound marketing is that it utilizes outdated techniques that are “interruption based,” or disrupt customers as they are in the process of going about their days — for example, a cold call.Inbound, by contrast, is believed to be more seamless, pulling already interested customers along an inevitable path to purchase via a company’s website, various marketing materials, and potentially an organic conversation with a sales representative.On top of the perception that outbound is old technology is the idea that it is more expensive than inbound, given that it involves investment in outreach such as ad buys, website development, email campaigns, and more. This is a view that has been encouraged by vendors who have a vested interest in the success of inbound. As an example, take this excerpt from a Marketing Stream blog post:

“It’s generally accepted that outbound marketing is, well, out. It’s the old way of doing business. It’s not cost-effective, it takes too long, and the lead qualification process is intrusive and most customers find it off-putting. It was bad enough when telemarketers were calling at dinner, but now they have your cell phone number?” [Marketing Stream]

In the past, these assumptions about outbound might have been more understandable. Outbound does after all, hail from a more traditional outreach background than inbound. But equating the outbound of today with the outbound of yesterday is a mistake—and these assumptions are based on an obsolete understanding of what outbound marketing is, how it is applied, and the results it drives.Stereotypes about the character of modern inbound and outbound marketing are largely based on skewed or outmoded information, as we will discuss below.

The Problem With Inbound

The fundamental problem with characterizing inbound as the end-all be-all of B2B marketing strategy is that inbound tactics simply don’t offer the best results for B2B companies that are growing and scaling at a rapid pace.By nature, inbound will only address a limited segment of a company’s total addressable market. Even the largest brands do not have 100% market awareness. Inbound marketing disproportionately favors warm leads over leads that fit a company’s buyer personas.The most profitable segments of a B2B company’s market may not be the most engaged. Inbound leads are frequently warm, but unqualified. Many B2B companies have hard costs built into customer acquisition, for example, by offering a loss-leader during the onboarding process. It can be expensive to bring on a new customer — especially if they are not a good fit. Attracting low-quality leads through inbound channels requires additional layers of qualification, often by a well-paid sales rep, or can result in a higher rate of churn.Additionally, inbound strategy necessitates the consistent production of content that prospects can engage with (blog posts, landing pages, PDFs, the list goes on). For rapidly growing B2B companies, building a scalable inbound engine is no small feat, particularly when they have limited resources or budget.

“Campaigns require a constant time investment to produce content that is of sufficient quality to be useful. The efficacy on an inbound marketing campaign only becomes evident three months after the campaign is established, and results may be more difficult to measure.” [MatchCraft]

Viewed in this light, the cost of inbound in aggregate—building a strategy around each individual piece of content, creating it, deploying it, and managing it—is more expensive than it initially appears. The creation of high-quality content compounds with volume.Since the results of inbound are not immediate, it is not easy to pivot on messaging or strategy. Managing high volume inbound channels can be like steering an ocean liner. Long inbound timelines are also subject to seasonal fluctuations and other factors that can impact lead volume. Predictability is not a strength of inbound marketing.For B2B companies who are looking to grow and expand rapidly, inbound marketing alone simply can’t keep up with the pace of business.

The New Outbound Marketing

Equating the outbound marketing of today with the interruption-based outbound marketing of ten years ago is entirely inaccurate. Technology has now elevated outbound marketing into a highly targeted, personalized, scalable, predictable, and cost-effective channel.Outbound email is a perfect example.“[Outbound email] used to consist primarily of large scale, one-off email blasts, but now the technology has moved to the point where marketers can hyper-target small subsets and even individuals with very focused content tailored to their specific interests,” Steven Coufal, Senior Media Relations Specialist at Gartner, recently told Kissmetrics.“Say a prospect signs up for your email list and you begin to track them,” Steven explains. “Your marketing software scans their social media accounts to learn they are a female, in the 24-39 age range, a working-professional, living in London. It recognizes that she’s in the target demographic for your company’s new line of trench coats. She then gets opted into a specific email stream that promotes the styles and options known to be popular with her demographic.”This ability to segment and target when conducting outreach means that outbound can actually be more personalized that inbound alone, particularly when it’s used through channels like email. The potential for personalization and targeting is only limited by the quality of your lead data.A key benefit of outbound is that it enables companies to reach out to customer segments who may not yet be informed about their brand, but are a highly lucrative segment of the market. And since marketers can control how many customers are being targeted with each round of outreach, it’s also far more predictable and scalable than inbound as well. The number of leads a B2B team needs is simply a function of the conversion rate at each step of the funnel.The most successful sales and marketing teams (even those who are actually selling inbound technology themselves) rely on outbound for growth:

“Even Hubspot, the leader in the space, utilizes outbound marketing strategies towards the end of the sales funnel to close sales. While the sales team relies on potential customers to sign up for their newsletter and create a free trial account, they will also remain in contact and will call the potential customer to persuade them to sign up for their marketing or sales software.” [MatchCraft]

For its part, inbound has obvious benefits—chief among them directing warm leads into the sales funnel and high conversion rates to demo, trial, or purchase, given that trust with customers has already been established.For many B2B companies, the inbound portion of the puzzle has been taken care of—it’s a well-crafted outbound strategy that’s the crucial missing piece for scalable growth.Originally published at Business2Communty.com

FAQs

How do you effectively measure and compare the ROI of inbound versus outbound marketing efforts?

Measuring and comparing the ROI of inbound versus outbound marketing efforts requires a nuanced approach, considering the inherent differences in their methodologies, objectives, and impact timelines. While inbound marketing is often lauded for its cost-effectiveness and ability to build long-term relationships, outbound marketing is prized for its directness and speed in reaching potential customers. However, both strategies face scrutiny over their ROI, which can be challenging to quantify due to varying metrics and the interplay between short-term gains and long-term value.

To effectively measure and compare the ROI of these marketing efforts, businesses should focus on a combination of quantitative and qualitative metrics that align with their specific goals. For inbound marketing, key performance indicators (KPIs) such as website traffic, lead generation rates, conversion rates, and content engagement levels are crucial. These metrics help assess the effectiveness of inbound tactics in attracting and nurturing potential customers over time. Additionally, customer lifetime value (CLV) and customer acquisition cost (CAC) provide insights into the long-term value and cost-effectiveness of inbound strategies.

What are some examples of successful outbound marketing campaigns, particularly those that have utilized modern technology to be less intrusive and more personalized?

On the other hand, outbound marketing ROI measurement often centers on direct response metrics, including response rates, conversion rates from specific campaigns, and immediate sales growth. It's also important to consider the reach and brand awareness generated by outbound efforts, though these are more challenging to quantify. Advanced analytics and marketing attribution models can help businesses trace specific sales or engagement back to individual outbound campaigns, providing a clearer picture of their immediate impact.

Successful outbound marketing campaigns that have leveraged modern technology to be less intrusive and more personalized include targeted email campaigns that use detailed customer data to tailor messages to specific segments, social media ads that utilize user interests and behaviors to serve relevant content, and programmatic advertising that dynamically adjusts messaging based on real-time user actions. For instance, a B2B tech company might use LinkedIn's advanced targeting capabilities to deliver personalized ads to decision-makers within their target industries, focusing on key pain points or recent industry developments to spark interest and engagement.


How can B2B organizations integrate inbound and outbound marketing strategies effectively?

Integrating inbound and outbound marketing strategies effectively requires a strategic understanding of how the two can complement each other, playing to their respective strengths. This can be achieved by using inbound efforts to build a foundation of content and thought leadership that attracts and educates potential customers, while outbound tactics can be used to directly reach out to these nurtured leads or to target specific segments with personalized messages. For example, insights gained from inbound engagement can inform more targeted and relevant outbound campaigns, while outbound efforts can drive traffic back to inbound content, creating a synergistic loop. The integration should be guided by a clear understanding of the customer journey, ensuring that each touchpoint is optimized to move prospects through the funnel in a cohesive and coordinated manner.


What specific challenges do companies face when transitioning from a predominantly inbound strategy to incorporating more outbound tactics, and how can these be addressed?

Transitioning from a predominantly inbound strategy to incorporating more outbound tactics presents several challenges, including aligning messaging across different channels, ensuring data quality for targeted outreach, and managing the potential increase in CAC. To address these challenges, companies should focus on developing a clear understanding of their target audience and how different marketing tactics can meet their needs at various stages of the buyer journey. Training teams on outbound strategies and technologies is crucial, as is establishing clear metrics for success that consider both short-term conversions and long-term engagement. Moreover, maintaining a strong alignment between sales and marketing teams ensures that outbound efforts are informed by insights from direct customer interactions, enhancing personalization and relevance.



In summary, measuring and comparing the ROI of inbound and outbound marketing requires a comprehensive approach that considers both direct metrics and the broader impact on customer engagement and brand perception. Successful examples of modern outbound marketing demonstrate the power of personalization and technology in making outbound less intrusive. Integrating inbound and outbound strategies offers the best of both worlds but requires careful planning and execution to overcome the inherent challenges of aligning different tactics within a cohesive marketing strategy.

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