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Inbound vs Outbound marketing - which is more cost-effective

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Written by Flying Saucer Studio

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As a start-up, knowing where to focus your time, energy, and perhaps more importantly - your money, when it comes to marketing campaigns is an important, yet complicated step.

Deciding your business’ marketing strategy before you execute anything can really save you a lot of all three of those things - which is how we determind success. According to Coschedule, marketers who document their strategy are 538% more likely to report success. 

Every business needs a marketing strategy, but should you opt for inbound or outbound marketing?  There are a lot of ways to advertise your product, so we’re here to show you what you need to know about the two most common types. 

 

Inbound Marketing & Outbound Marketing Defined

Inbound marketing is a marketing methodology that aims to attract customers through organic means like blogs, opt-in email lists, videos, thought leadership posts among many other options. Customers find content through organic means because they’re genuinely interested in learning more about the brand - and when they’re coming to you already interested, your salespeople can find this a much easier lead to work with. 

Outbound marketing is focused on pushing messages to prospects - and is what people often think of when they hear the term “sales”.. Some popular examples include sponsored video ads, direct mail campaigns, pop-ups, billboards, and print ads. The company sends its messages to consumers as opposed to the customer seeking them out. 

Software Advice illustrates this pretty darn well:

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The cost of inbound vs outbound marketing?

Many start-ups are primarily focused on lead generation, because - well, they’re starting up, and most companies don’t have a huge base of people who want what they’ve got right out of the gate.

In our post about customer acquisiton cost per industry, we reported that 65% of businesses consider lead generation as their biggest marketing challenge - so concentrating your energies in the form of marketing that makes the most sense for your business model, and keeps that CAC down is a great goal to have.

But should you pick inbound or outbound marketing? Some stats to back our case:

DemandMetric had some really interesting stats about inbound marketing, but our favourite was that it costs 62% less per lead. That’s a whopping difference when you’re talking ROI and bootstrapped budgets.

A study by HubSpot also found that the average cost per lead for outbound-focused businesses was $364 per lead which is significantly lower than inbound marketing’s cost at $135 per lead. 

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Hubspot also found that 75% of marketers who used inbound marketing strategies believed it was effective, while, only 62% of businesses that focused on outbound marketing felt the same. 

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53% of marketers also believed that inbound marketing leads to a higher ROI. 

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Not surprisingly, inbound marketing is cheaper because it’s customer-driven -  there’s no need to interrupt a customer’s activity to get attention. As we mentioned above, when a client is coming to you, half the job of selling them on what you have to do is already done - all you have to do is seal the deal. 

You create compelling content and sit back to watch the traffic, and the sales roll in.

BONUS: 5 tips for how to up your inbound marketing game


As you can see, we have a definite preference for an inbound marketing strategy, but it’s backed up by the data - inbound marketing costs you less and has better value for your business. That being said, both have a place in your marketing arsenal - so consider a blended approach as well. If you’re not sure how that would work for your business, definitely book a call with us and we can walk you through it!

Until next time, friends.

 

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Article written by Monique Danao

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