Learn a powerful step-by-step process for conducting sales funnel management that will help you generate more revenue with fewer inputs.
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.
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.
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.
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 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.
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.
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:
Build a Lead Generation Website
Create a conversion-focused website with a landing page that both promotes your lead magnet and hosts it and its web form to capture visitors’ contact information.
Publish SEO-Optimized Blog Content
Create a blog on your website, then write posts that your target audience will find interesting and that Google will rank highly in its search results pages for your ideal customers' queries.
Utilize Organic Social Media
Get on social media and start posting valuable content regularly, including blog posts, to grow a following.
Offer a Valuable Lead Magnet
Create a gated resource like an industry report, video course, or demo that your target audience wants and promote it on high-traffic web pages or social media.
Pay for Social Media Ads
Run advertisements for your lead magnet to your target audience on social media platforms like Facebook (best for B2C) or LinkedIn (best for B2B).
Bid on PPC Ads
Create ads for your business offering and pay a fee per click to get them listed in the 2–4 top spots of Google’s search results page.
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.
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.
Read our ultimate guide on online lead generation, where we walk you through the step-by-step process of creating an online lead generation system that consistently brings you high-quality leads.
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.
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:
Call leads, introduce yourself, pitch your product or service, and attempt to book a meeting with the lead.
Write and send personalized emails that pitch your product or service and ask the lead to take next steps with you (typically scheduling a call).
Build relationships with leads on social media platforms and eventually direct message them to try to book a sales meeting.
Knock on doors and deliver your pitch to ideal customers in an effort to book a more formal meeting or make a sale on the spot.
Tap into your network to find leads for your product or service. Consider attending a trade show or other event to scout for and meet some ideal customers.
Ask customers to refer you to other people who might benefit from your product or service. Consider setting up reward programs that incentivize referrals.
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.
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.
For more on outbound lead generation, check out our ultimate guide on sales prospecting, which includes information on the top six strategies to use and how to do them well.
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.
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:
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.
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.