Inbound vs Outbound Leads

Advertising is everywhere. It’s estimated that across the United States, businesses collectively spend $366 on advertising per person, per year. The average person is exposed to around 400 ads per day and is aware of roughly 100 of those.

The goal of all that advertising? To generate leads and start prospective customers on the conversion pathway to becoming conversions.

Leads can be considered inbound leads or outbound leads. How you generate leads and how you use them depends on what type they are. In this guide, we’ll look at the different types of leads and the importance of each one.

What Is an Inbound Lead? 

Inbound leads are leads that contact you to express an interest in your product. These are the potential customers who saw an ad or a flyer and call your sales teams to ask for more information, request a trial or otherwise put themselves into the sales funnel.

Inbound leads are passively pursued. Word-of-mouth marketing can be a powerful tool for inbound lead generation, especially for long-established businesses. Another option for inbound lead generation is to run a content marketing campaign or a social media campaign and let people reach out to you if they’re interested.

What Is an Outbound Lead? 

Outbound leads are the ones that you contact first. These leads are actively pursued through more targeted methods such as email marketing or direct mail. Outbound phone calls to carefully researched prospects also count as outbound leads.

Making cold calls could also be considered a form of outbound lead generation. The conversion rate of these leads can vary dramatically, but outbound lead generation is still useful because it offers the chance to convert customers who might not have bothered to pick up the phone or fill out a contact form themselves.

Today, lead generation is becoming increasingly complex as prospective customers often engage with brands across multiple channels. Even if you’re reaching out to someone via a prospect list, there’s a high chance they’ll have already seen and engaged with the brand elsewhere. The conversion funnel is not always a straight line, especially for high-value purchases.

Inbound vs Outbound Leads

Both inbound and outbound leads have a place in marketing. The differences in approach allow them to reach different types of prospects, increasing your chances of success.

Some of the differences are highlighted in the table below.

  Inbound Leads Outbound Leads 
Purpose Lead Generation Lead Generation 
Speed Slow (requires time to build awareness) Fast (campaigns can be executed quickly) 
Targeting of Marketing Broad Focused 
Customer Awareness Higher (the customer sought out the business) Lower (they may be unfamiliar at first contact)
Push/PullPush Pull 
Cost Per Lead Lower Higher 

Inbound lead generation can be thought of as permission marketing. Through search engine optimization, organic reach, word-of-mouth and wide-reaching social media campaigns, you put out your marketing message and allow the customer to choose whether they respond to you.

Because you’re being more passive in your marketing and inbound leads are choosing to reach out to you, these leads have a reasonably high chance of conversion. However, it takes time to build up enough brand recognition to get these leads, making inbound marketing strategies a bit of a slow burn.

Yes, you’ll get qualified leads, but if your sales department is struggling to meet its targets for the quarter, ramping up inbound lead generation probably won’t help them reach their goals.

In contrast, outbound lead generation can be thought of as interruption marketing. You’re reaching out to the prospect via their phone, email inbox, or physical mailbox and telling them, “Stop what you’re doing; we’ve got something to show you.”

This type of active marketing will probably have a lower conversion rate because even with a well-qualified marketing list, you’ll end up with some people who just aren’t interested. However, because outbound lead generation is active, you control the volume and rate of calls. 

If you need to generate more leads quite quickly, investing in interruption marketing can make sense. You’ll see results more quickly, and if the source of prospects you’re using is well-researched, you’ll have a chance to acquire some customers who might not otherwise have bought from you.

Should You Do Both? 

If you’re able to do so, it’s a good idea to do both inbound and outbound lead generation if you want to have a sustainable business. Outbound lead generation typically costs more than inbound lead generation but puts you in control of who sees your message and when. Inbound lead generation is slower and less expensive, so it can be a long-term source of a steady trickle of leads.

Not all businesses have the capacity to use both marketing strategies at the same time. If your budget for creatives and advertising is limited, or you have a small sales team, you might wish to focus your efforts on just one form of lead generation at a time.

If that’s the situation you’re in, you may wish to choose inbound leads if:

In contrast, you might find outbound lead generation works well for you if:

You may find your sales team switching between inbound and outbound strategies depending on the goals for the quarter or what’s going on elsewhere in the business. Review your marketing strategy regularly to make sure it’s aligned with your business goals.

Inbound lead generation is a relatively low-cost but slow-and-steady form of marketing that can be effective for acquiring leads who are actively interested in what your company has to offer. Outbound lead generation is more proactive and costly, making it useful for growing your database of leads quickly, although the leads may not be as likely to convert.

There’s no right or wrong choice when it comes to inbound vs outbound lead generation. It’s common for businesses to use both strategies simultaneously or to alternate between them depending on their current goals.

You can increase the value of leads from both types of lead generation by ensuring your SEO, content marketing and direct marketing efforts are properly targeted. Well-written ads and thoughtfully chosen keywords help ensure the relevance of your marketing materials to the prospects who see them.