Inbound vs. Outbound Leads: What’s the Difference?

Any potential customer for your business is called a lead, but not all leads are created equal. When it comes to lead generation, there are two broad categories of leads: inbound and outbound. 

Different types of leads need different approaches and guidance to be coaxed to a sale, so it’d be wise for your business to distinguish between them.

If you’re new to sales terminology or need a refresher, this guide will tell you everything you need to know about inbound vs outbound leads to ensure you’re converting both categories into paying customers.

What’s a Lead?

In sales, a lead is a potential customer the company knows little about.

Sales reps reach out to leads to make a sales pitch; those who fit the customer profile and can purchase are qualified as sales prospects. Once a prospect shows interest in buying, they become a sales opportunity. Finally, when they make a purchase, they are a customer.

What is Lead Generation?

The process of sourcing and attracting leads for a company is called lead generation, or lead gen for short. There are two main types of lead generation: inbound lead generation and outbound lead generation. 

What Are Inbound Leads?

Inbound leads are potential customers who reach out and contact a company first for more information or to make a purchase. They come from inbound lead gen strategies and marketing campaigns that get a brand’s name out there to pull leads into the company – primarily using ads, social media posts, SEO, and content marketing.

With inbound lead gen, consumers are empowered with the choice of reaching out or not, so an effective inbound sales strategy should focus on creating and nurturing a lead’s interest in your company and product.

Inbound lead generation is mostly used by B2C companies: because these companies generally have a higher number and turnover of customers, it’s much more cost-effective to create generalized inbound marketing material that appeals to a wide base of leads. That way, they get hundreds of potential customers in one fell swoop!

On the downside, it’s much harder to control who sees your content: for example, on social media, it could be reblogged by someone outside your target audience and reach a completely separate group. 

That’s why instead of appealing to a specific ideal customer profile, inbound lead gen campaigns and content should focus on spreading the brand’s name and value proposition, broadening its appeal and versatility to more people.

What Are Outbound Leads?

On the other hand, outbound leads are sales leads that your sales team must reach out to and contact first. Outbound lead gen strategies and marketing campaigns push the brand out to the consumer – such as cold calling, direct mailing, events, and asking for referrals. 

With outbound lead gen, consumers might initially resist sales attempts, finding it disruptive or annoying. An effective outbound sales strategy overcomes this by researching each lead or target audience’s pain point in advance, tailoring their approach and content to appeal to consumers, and overcoming any objections to successfully make a sale.

Outbound lead generation is used more by B2B businesses: their target audience is much smaller, so companies can’t rely on endless numbers of incoming leads to fill their sales funnels. Instead, B2B businesses spend time and money discovering and researching a lead, tailoring their pitch to the lead’s specific pain points before reaching out. By making a good, strong first impression on outbound leads, B2B companies hope to convert more of them into paying customers.

Because of how prevalent spam calls and emails are, the best outbound lead gen campaigns focus on personalizing communications as much as possible to each customer or buyer persona, building a connection with the prospect to raise their interest in the company and product.

Should I Pursue Inbound Marketing or Outbound Marketing?

Whether you attract inbound leads or pursue outbound leads depends on your company, product, and target audience. 

Though an inbound lead might already count as a qualified lead ready for selling, it may take a long time for your inbound marketing strategy to organically gain traction and bear fruit. Still, if your company is in a good place financially and can work on improving its reputation to a large market, inbound lead gen might be better.

On the other hand, if you have a very niche product or small target audience, an outbound marketing strategy prevents reps from wasting time appealing to uninterested masses. Plus, with control over when you approach the lead, reps can prepare ahead of time to assemble a sales pitch that’ll knock their socks off.

But overall, it’d be best to use a blend of both: eight out of 10 businesses said both inbound and outbound lead gen drove their sales, according to a study by marketing consultancy Demand Metric.

Conclusion

A business will have different strategies and approaches for inbound leads who approach the company already interested and outbound leads who need more personalized selling. 

With a good understanding of what makes inbound and outbound leads different, your company can choose a lead generation strategy that fits your business and better persuade each type of lead to a purchase. With a bit of luck, you’ll be closing plenty of customers from both categories!