Inbound vs. Outbound: Are You Asking the Right Question?

At SiriusDecisions, we see increasing allocations of marketing program budgets to inbound programs and tactics. There are many reasons for this shift, not least of which is the simple fact that it's harder than ever to break through the noise to reach targeted prospects through traditional outbound means. The buying process has shifted, with buyers now much more proactive in researching solutions on their own, and deciding when and how they will engage vendors in their evaluation. This has placed a premium on marketers who can identify and attract prospective buyers early in their buying cycles, and explains why companies are investing more in programs and tactics to achieve this end.

These developments often generate discussion about the superiority of one type of inquiry over another. Specifically, are inbound leads better than outbound leads? This question implies there are two competing approaches – but is that the right way to frame the question?

The hypothesis is that inbound inquiries will convert at a higher rate, at a lower cost per unit, because inbound inquiries are essentially volunteering to receive some sort of followup. But the farther into the waterfall you take that hypothesis, the harder it becomes to prove. That's because the b-to-b buying process is often characterized by evaluation teams representing different constituent groups. With sales cycles that run months, quarters or even years, it is probable that prospective customers will interact repeatedly over that timeframe.

Attributing the full value of the opportunity to a single response or conversion overstates the likely influence of that inquiry, whether you're using first-touch or last-touch attribution. A weighted attribution model is similarly fraught with problems, because it applies weights on each offer or response based on its perceived value and impact independent of other responses, when in reality it may be the interplay between tactics that has the bigger influence on progressing a lead or opportunity deeper into the waterfall. In other words, without proper marketing touch analysis that analyzes the "arc of activity" or combination of tactics that correlate most with successful deal outcomes, it will be nearly impossible to define attribution models with any predictive value at all.

The truth of the matter is that inbound and outbound will be forever entwined, and trying to break them apart for deal attribution is a futile exercise. After all, inbound inquiries feed into outbound nurture programs, and inbound inquiries are frequently triggered by outbound communications, even though many of these inquiries will not be directly traceable back to the outbound touch. Best-in-class organizations deftly integrate their campaigns and programs to utilize both inbound and outbound marketing tactics, often for different purposes. For example, companies that have invested in building an inbound engine that produces a predictable flow of early buying cycle inquiries may complement those efforts with highly targeted (and higher-cost) dimensional mailers to accelerate entry to pipeline, as well as recycle nurture streams designed to reduce lead waste.

So What Is a Marketer to Do?

Focus less on individual tactic performance to prove the value of inbound vs. outbound (or vice versa), and instead analyze the ratio of inbound to outbound inquiries against the outcomes you are trying to achieve. If those outcomes are contribution to pipeline and revenue, benchmark against a peer set of companies and compare waterfall performance against the ratio of inbound and outbound inquiries that yielded the best performance.

Is it possible to over-invest in one approach relative to another? Absolutely. Will there be variations from one category to another? That's likely, yes. Regional differences? Sure. But that does not minimize the value that marketers can gain from finding the right balance between investing in programs that attract inbound inquiries and programs designed to drive outbound responses. Too much of one over the other will likely lead to a dip in performance, so finding the optimal balance of inbound and outbound inquiries should be the goal, rather than pitting inbound against outbound.