Outbound & Inbound Marketing

by Chris Arlen on May 12, 2011

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Outbound & Inbound MarketingFacility service contractors are not known for their marketing prowess – they’re hyper-selective and cautious at best. But for those who market it may seem as if there’s a war between traditional outbound marketing and its newer, sexier cousin, inbound marketing.

Though not a war, it is a skirmish between outbound and inbound marketing for supremacy over budget and headcount.  Surprisingly both types of marketing are in a symbiotic relationship – they work better together. However, there’s a trigger between the two, which must take place before the inbound side shows its power and effectiveness. That trigger’s vital role appears to be a secret – while the spotlight falls on inbound’s Facebook, Twitter, LinkedIn, etc.

In next week’s post I’ll address that secret trigger. But in this post let’s first start with a shared understanding of outbound and inbound marketing.

Simplified Marketing Definitions

Outbound Marketing Defined

Advertising, PR, telemarketing, direct mail, and tradeshows push messages out to anonymous buyers. It’s inefficient and costly (“you spent how much on tradeshows last year?”). Commissioned salespeople fall under this form of marketing as well.

It’s also called “interruption marketing” because it is. Look at the direct mail pieces in your wastebasket, spam in your inbox, ads in newspapers, and on TV and radio. Outbound marketing is about trying to buy people’s interest in what you’re selling.

Success rates for all types of outbound marketing are typically very low, from 1 – 3%. As a result, they’re also costly per qualified lead generated.

Inbound Marketing Defined

Blogs, social media, organic search (SEO) and paid search (PPC) are more effective at targeting customers and are far more cost-efficient – 62% less costly per lead than outbound marketing according to HubSpot’s “The 2011 State of Inbound Marketing“.

Inbound marketing is about “earning people’s interest instead of buying it”. It’s a long-term process where marketers exchange insight (valued information with context) for buyers’ attention. But this only occurs when buyers give permission – they opt-in (forms vary with the social media)

HubSpot's Time to Transform Your MarketingFor a number of factoids on the digital age as they relate to outbound and inbound marketing view HubSpot’s “It’s Time to Transform Your Marketing

Outbound & Inbound Marketing Goals Differ

Outbound Marketing Goals

#1 Right-place, Right-time Sale

The short-term goal of the shotgun approach is to reach a buyer at just the right time – when they’re ready to buy.

Like roulette, the odds of success are not favorable. This approach takes huge numbers to make it worthwhile, which is costly, disruptive to buyers, and doesn’t make for very respectful relationships between buyers and sellers. But hey, a seller might get lucky.

#2 Raise buyer awareness

The long-term goal of outbound marketing is to raise buyers’ awareness to the seller’s brand and offering.

Sellers seek top of mind awareness, so when a buyer thinks about buying they’ll think first about the seller’s brand and offering. This can be very costly as it takes many interruptions before the seller’s message gains a foothold in the buyer’s overloaded consciousness.

Inbound Marketing Goals

While inbound goals are similar to those of outbound marketing, they manifest themselves within a buyer-seller relationship that is more valuable, meaningful and respectful. As a result, conversion rates are higher and cost per lead lower than outbound marketing.

#1 Buyers contact the seller when they’re ready to buy

With inbound marketing, buyers contact sellers when they are motivated and actively seeking a solution. At the time they reach out to the seller they:

* Know they have a problem & want to to fix it, and/or
* Have identified improvements they want to make

This is what all sellers want from their marketing: pre-qualified, motivated buyers contacting them.

#2 Buyers see the seller as the leading solution

In a strong relationship, buyers see the seller’s firm as the leading solution to their needs/goals. Not the only solution, but the leading one, and that’s a great position for a seller to be in. This often occurs simultaneously with goal #1 above.

The position of thought leadership has multiple benefits when buyers eventually contact the seller. Benefits such as:

* Higher value associated with the solution (less price sensitivity) as buyers better understand the cost of no action, or poor execution
* Foundation for a respectful, mutually beneficial buyer-seller partnership
* Greater loyalty to the seller as knowledge leader than competitors
* Better defined service scope as buyers become more knowledgeable (see #3 below)

#3 Buyers become more knowledgeable

Often buyers are unaware of the impact poor facility services have on their overall business. Inbound marketing, over time, has the ability to educate buyers to better understand the connection between service cause and business effect.

Buyers don’t necessarily want to be taught – however, most want to learn. Inbound marketing provides that self-selected, self-paced learning opportunity.

Keys to Success

There are many things that must be in place for both types of marketing to succeed. Here are some of the most important.

Outbound Marketing Keys to Success

  • Laser-like targeting of prospective buyers
  • Compelling messaging that speaks to buyers’ wants & needs
  • Many repetitions of the message (aka impressions or interruptions)
  • Substantial commitment in money & expertise (often outsourced)

Inbound Marketing Keys to Success

  • Provide value first before gaining buyers’ attention
  • Consistent creation & sharing of valued content
  • Long-term commitment to buyers, their business & the industry
  • Managed presence interacting & monitoring social media (dedicated headcount)
  • Secret trigger to gain buyers’ permission to like/follow/connect with sellers –> and that will be addressed in next week’s post

The Secret Trigger to Inbound Marketing?

Inbound marketing is in many ways superior to outbound marketing. However, getting started in the permission game can be a mystery. Can you guess what the trigger is? And why it’s important to inbound marketing? Comment on this post. We’ll see what your thoughts are.

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Chris Arlen
President, Revenue-IQ

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{ 2 comments… read them below or add one }

Nick Stamoulis May 16, 2011 at 6:24 am

Marketing is now a two way street. It’s about having a conversation with your prospects, not just advertising at them. This is why social media is increasing in popularity in the business world. Companies realize that if they aren’t involved and aren’t communicating with their target audience, they are probably missing out on business opportunities.

Chris Arlen May 16, 2011 at 2:52 pm

Nick, yes marketing can now communicate in both directions and customers are adjusting to that change as they’re choosing which conversations to engage in. But not all marketing is bi-directional. There are still forms of one-way marketing that retain their reason for being. The new marketing challenge is getting the mix right between inbound and outbound – just as traditional outbound marketing once sought to get the proper mix between ads, PR, promotion, etc.

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