Recent research is showing that companies and marketers are continuing to shift marketing dollars and activities from outbound marketing to inbound marketing. The trend is significantly higher for B2B companies; B2C companies which have historically focused more on outbound marketing are now also shifting more marketing dollars and activity to inbound marketing.
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Inbound Marketing Includes Market Research to Find Out:
What specific groups of potential customers/clients (markets)
might have which specific needs (nonprofits often already have
a very clear community need in mind when starting out with a
new program -- however, the emerging practice of nonprofit business
development, or earned income development, often starts by researching
a broad group of clients to identify new opportunities for programs)
How those needs might be met for each group (or target market),
which suggests how a product might be designed to meet the need
(nonprofits might think in terms of outcomes, or changes, to
accomplish among the groups of clients in order to meet the needs)
How each of the target markets might choose to access the
product, etc. (its "packaging")
How much the customers/clients might be willing pay and how
(pricing analysis)
Who the competitors are (competitor analysis)
How to design and describe the product such that customers/clients
will buy from the organization, rather than from its competitors
(its unique value proposition)
How the product should be identified -- its personality --
to be most identifiable (its naming and branding)
Whats the Difference You Ask
Outbound
Outbound marketing is the traditional style of marketing of sending messages to the masses to attract the attention of those who may have a need for a product/service/solution. Typical outbound marketing media used are TV commercials, print advertising, radio, direct mail, tradeshows, cold calling, telemarketing, email 'spam', etc. Outbound marketing uses intrusion and interruption tactics to get attention in the hope that some people respond. The reasons for outbound marketing’s decline include:
People are tuning out much of this traditional media. For example, TV viewership continues a multi-decade decline, newspaper subscriptions and sales are down substantially, tradeshow attendance has declined significantly and many have stopped running entirely.
People are blocking the intrusions and interruptions from the traditional media with do not call lists, call blocking, Tivo, spam filters and many other methods.
Outbound marketing channels tend to be higher cost with lower yield.
Almost impossible to measure effectiveness and ROI on an immediate basis. Results are usually aggregated over time periods with limited specific feedback to make adjustments.
Inbound
Inbound marketing is marketing focused on being found by prospective buyers/customers. Typical inbound marketing media are websites, search engines, blogs, social media such as Facebook, Twitter, You Tube, LinkedIn, etc. Inbound marketing uses techniques such as permission, content, and relationship marketing for buyers to find the vendor. Think about how your own shopping habits have changed – many people will now first go online to do research and get information about what they want buy. Inbound marketing is about creating a web presence/marketing hub and positioning for your business/product/service/solution to be found by buyers.
The key difference is that outbound marketing is about using a shotgun approach to hit as many targets as possibler to find buyers and customers. Inbound marketing is about establishing the right web presence and positioning for buyers to find you. A few of the advantages of inbound marketing are:
Inbound marketing is using your website to draw buyers to find what they need.
In principle, when someone finds you, they’re already self-qualified as a prospective buyer. That is not always the case and will vary, in some cases dramatically.
Costs tend to be lower and more directly scalable to results. (Don't forget to factor in the cost of the website.)
Geographic and demographic reach can be scaled and targeted at a more granular level.
With the right research it becomes possible to target specific buyers for a particular product/service/solution.
Extensive tracking and measurement tools to monitor, manage and fine tune marketing programs in real-time is readily available. (Google is a great source for these and they are free.)
Independent Research
A Forrester Research survey on B2B marketing budget comparisons between 2008 and 2009 shows significant increases in budget allocations for inbound marketing activities such as websites, search marketing, video, podcasts, newsletters, social media, etc. The survey also shows significant decreases in budget allocations for outbound marketing activities such as trade shows, direct mail, outdoor, print, TV, radio, sponsorships, etc. Although B2C marketers still use outbound marketing heavily, many B2C companies in various industries as diverse as banking, automotive, apparel, insurance, etc. are making substantial moves into inbound marketing.
Outbound marketing still commands the largest share of marketing budgets, but continues to show declining returns. Inbound marketing is getting more attention and an increasing share of budget allocation with better results and continuing improvement of techniques.
How to use this information to benefit your business
In this market and economy many companies are looking at reducing their costs of sales and marketing. Analyze closely where to lower or cut entirely and where to increase in terms of getting increased market share and attracting new customers.
Consider shifting dollars from less effective outbound programs to inbound programs with potential for greater immediate and long-term potential.
Traditional types of marketing such as trade shows and advertising have worked in the past, however, it’s time to reevaluate what’s working now.
Inbound marketing is a huge opportunity to level the playing field with larger competitors and reach new buyers at a fraction of the cost.
Inbound marketing is about being found by customers/buyers when they are in the market to buy. Being found is key here.
