Inbound vs Outbound Lead Generation: Meanings & Which to Do

Businesses generate leads using inbound or outbound strategies, or a combination of the two. Through inbound lead generation, marketers typically produce and share marketing assets like blog posts or PPC ads online, or they sometimes create billboards or TV commercials offline. To do outbound lead generation, sellers contact potential leads directly via phone, email, or other methods. It’s crucial to understand the differences to prioritize the right efforts.

Inbound vs Outbound Leads: What’s the Difference?

The main distinction between inbound and outbound leads is that inbound leads contact you first, whereas you contact outbound leads first. Specifically, inbound leads initiate contact with your business by submitting an online form or by calling or messaging you directly. Outbound leads, on the other hand, remain inactive until a salesperson equipped with their contact information reaches out to them to spark an interest in their business.

Sometimes people take inbound and online lead generation to mean the same thing. But, online lead generation is actually a subcategory of inbound lead generation where marketers create digital assets to reach and attract online leads. Inbound is a slightly more inclusive term, also including offline lead gen activities like commercials, sign spinners, or billboards in its list of tactics. Because online is popular with many businesses, we’ll focus on that subset of inbound lead generation.

What Is an Inbound Lead?

An inbound lead is a potential customer who fits your buyer persona (a description of your ideal customer) and makes contact with your business. Typically, inbound leads are generated organically through online lead generation strategies that, like content marketing, influence them to submit their contact information into a web form to receive a lead magnet or speak with a sales rep. The lead might also call your business or simply walk into your store.

What Is an Outbound Lead?

An outbound lead is a person who matches your buyer persona and is contacted through cold outreach by a salesperson. Outreach methods include cold calls, cold emails, cold canvassing, referrals, social outreach, or networking. Unlike an inbound lead, the outbound lead hasn’t told you they want to engage with your team, so they can be harder to convert into prospects. Instead, their names and contact information are typically purchased or found through research.

Inbound vs Outbound Lead Generation: What’s the Difference?

Inbound lead generation is the act of attracting ideal customers to your business by providing value to them (e.g., offering organic content) and by getting exposure through your paid ads. Trust and interest then build until the lead reaches out to you in some way. On the flip side, outbound lead generation is the process of reaching out to ideal customers, pitching them your product or service, and getting them to agree to a sales conversation.

How Inbound Lead Generation Works

Who Should Use It: B2B and B2C businesses that have a marketing team and want to invest in and build a system that passively supplies them with warm leads. 

Companies first create a customer persona so they can tailor their inbound lead generation strategies to their customer’s interests. They then create and share free online content that educates these ideal customers about something they want to learn. At times, the business plugs a free offer that leads can get if they submit their contact information. This offer is often a lead magnet (checklist, free trial, etc.) embedded in a blog post, home page, or social media ad.

6 Best Inbound Lead Generation Strategies

There is a process to create the most effective inbound lead generation machine, and it involves six online lead generation strategies. These should be followed sequentially for best results:

After an inbound lead fills out your lead capture form to receive the lead magnet, you can begin to qualify the lead using a scoring model or a discovery call and then nurture qualified prospects toward a close.

Pros & Cons of Inbound Lead Generation

The first advantage of inbound lead generation is its reach. With online lead generation, you can reach and engage a large audience — about anyone with internet connection. A high-ranking article on Google can drive thousands of ideal customers to your website. Its second advantage is that you get constant market feedback. You can see what content resonates most with your audience and use this data to adjust your marketing and sales strategy. 

The main disadvantage of inbound lead generation is how long it takes to produce results. A potential lead will likely need a high number of touchpoints with your brand (articles read, videos watched, etc.) before they’re ready to reach out to you. You’re also less in control than if you were to call a lead and ask for a meeting. Lastly, you could be dominated by competitors who put more money into their inbound efforts.

How Outbound Lead Generation Works

Who Should Use It: B2B or B2C businesses that want their sales team to be proactive and initiate sales conversations with decision makers.

Businesses first compile a list of people who fit their ideal customer profile. They can find these people, their email addresses, phone numbers, and more through a sales prospecting tool or manual research. Salespeople then research each individual to personalize their outreach and tailor it to a relevant need. Finally, sales reps reach out to the leads over phone, email, social media, or in person and attempt to get them interested in their product or service.

6 Best Outbound Lead Generation Strategies

There are six sales prospecting strategies salespeople use to initiate contact and generate outbound leads. They can be used as standalone methods or in unison with others on the list:

Often, the end goal of this outbound lead generation is to secure a discovery call with the lead during which you'll further qualify them. If the lead is a good fit for the product or service, you can mark them as a prospect and begin nurturing them to a close.

Pros & Cons of Outbound Lead Generation

The primary advantage of sales prospecting is its potential for speed. One cold call can convert a stranger into a curious lead in a matter of minutes. You can also pinpoint the exact person you want to reach, research them, and craft messaging that will relate specifically to their needs. Third, it's more proactive than inbound lead generation. If you need more leads in your pipeline, you can simply spend more time prospecting, which should bring fast results.

A disadvantage of outbound prospecting is its limited reach. Each sales rep can likely only try to connect with 60 people a day, and many of those leads will not answer, meaning the rep has to try them again another day. Productivity aside, to reach more people, businesses must hire more reps. A related con is the high rejection rates sellers face, which can lead to burnout. Prospecting also steals time reps could spend selling leads generated and pre-qualified by marketing.

Difference Between Inbound & Outbound Lead Generation

Inbound and outbound lead generation differ in how they attract leads. Inbound lead generation is magnetic, attracting target audience members with free content and advertisements to the business’s website, phone line, or brick-and-mortar store. Outbound lead generation is the reverse — salespeople go out (physically or virtually) and interact with potential buyers in an effort to inspire an interest in a specific product or service and book a meeting with the lead.

How to Choose Between Inbound vs Outbound Lead Generation

Businesses tend to adopt a one-or-the-other mindset, but when it comes to lead generation, combining both outbound and inbound is a favorable strategy. Still, some businesses might be better off choosing one method, or at least investing most of their resources into it. Businesses needing short-term results should prioritize outbound, while companies that are able to wait longer to create a nearly automatic lead-generating machine should try inbound.

Here’s a process to follow when picking between inbound and outbound lead generation:

1. Assess Your Lead Generation Budget: An outbound lead gen campaign can be quite expensive if you’re doing it in-house, as you have to hire, train, pay, and support salespeople (although you can outsource it). Inbound tends to be more affordable. 
2. Think About Your Ideal Lead’s Preferences: How does your target audience like to engage with brands? Do they use social media and read blogs, or are they old school and like to meet and talk with informed salespeople on cold calls and emails? 
3. Look at Peers in Your Industry: Tap into your network and figure out what your peers with similar business models are doing to generate leads. 
4. Take Into Account the Price of Your Offer: Generally, B2C products at lower costs benefit most from inbound lead gen. A cold call to pitch a $24 crockpot isn’t worth the cost when the vast majority of people will say no. A $2,000 per month SaaS tool likely is, though. 
5. Define How Quickly You Need Results: If you need to generate hundreds of new leads fast, outbound can get you there. Inbound takes longer to get results, as content takes time to rise in visibility and since leads need a lot of interaction before they take action. 

After you’ve gone through each of the above factors, make an educated decision about which lead generation method you want to use. You might feel that your company would benefit from generating leads with both methods so that you are reaching a large percentage of your target audience and capturing the advantages of both strategies. It might also help to hear some examples of companies using both, and how they do it. 

A small landscaping business selling to people in a small region might use local lead gen tactics like getting listed on Google My Business (inbound) as well as cold canvassing (outbound). A large SaaS company could prioritize inbound lead gen with content marketing, but still have salespeople to engage in cold outreach. Meanwhile, a freelance copywriter might send cold emails and use inbound LinkedIn tactics like publishing blog content their audience will enjoy.

Bottom Line: Inbound vs Outbound Lead Generation

Inbound lead generation focuses on getting potential leads to make the first move and come to you, whereas outbound lead generation has salespeople initiate a conversation with the potential lead. Both methods are effective and often used together in a lead generation plan. To learn more about the basics of lead generation and how to create your own overall strategy, check out our ultimate guide on lead generation.