As a business owner or marketing manager for the company you work in, you’ve most likely come across the terms inbound marketing and outbound marketing. These are two diverse strategies that you’ll want to become familiar with as you go through the path of finding new customers, creating ad campaigns, and increasing your sales.
Just like any effort made to scale your business, these marketing tactics have corresponding costs attached to them—especially when attaining buyers whom you want to be loyal to your brand. One of the most important metrics to track is your customer acquisition costs (CAC). This is calculated by dividing the number of users acquired by the total money spent on the company’s marketing efforts.
Before we dive deep in comparing the CAC involved with these two tactics, it’s essential to find out the difference between inbound and outbound marketing. What channels do they use? What kind of value do they provide to your audience?
The Difference Between Outbound and Inbound Marketing
Outbound marketing tactics are synonymous with aggressive, in-your-face methods of advertising, such as television or radio commercials, print ads, billboards, and the like. That said, outbound strategies are considered to be what started traditional marketing in the first place.
While these still exist today, you can’t deny that technology has changed the way people consume content. This shift has persuaded marketers to think of more out-of-the-box ideas when it comes to promoting their products and services.
Inbound marketing, on the other hand, is a bit more subtle. This makes use of different sub-tactics like content marketing and social media to attract the attention of prospective buyers—sometimes even before they’re aware that they need your product.
This is seen in the form of blogs, eBooks, creative social media campaigns, to name a few. The idea is to be at every stage of the buyer’s journey and support the prospect customer until they realize the value that your product or service is promising in their lives.
|Subtle and unassuming||Aggressive and interruptive|
|Content provides value to readers||Blatant advertising|
|Thrives in the digital space||Alive in traditional channels|
|Website (blog), search engines, referrals, social media channels, email||Newspapers, magazines, leaflets, television, telemarketing, billboards|
|Highly targeted way of acquiring customers||Hits a broader, general audience|
The Cost of Inbound vs. Outbound Marketing
Now that you’re more familiar with what inbound and outbound marketing tactics are all about, it’s time to break down the cost and efforts required to execute each strategy. Below are some stats and figures to better understand the current state of both marketing tactics today.
• The total cost of 3 out of 4 inbound marketing channels is cheaper than any outbound marketing channel. (Mashable)
• Companies that focus their marketing efforts on inbound tactics save upwards $14 for every newly acquired customer. (State of Inbound Marketing)
• Inbound leads cost around 61% less than their outbound counterparts. (HubSpot)
• Inbound marketing tactics yield about three times more leads per dollar versus the traditional outbound method. (Kapost)
• A well-executed inbound marketing campaign is seen to be ten times more effective for lead generation than outbound methods. (Gartner)
• The average cost per lead for inbound methods costs $36 vs. outbound’s $41. The average price per customer is at $254 for inbound and $268 for outbound. (SEO Pressor)
By these numbers, it’s safe to say that inbound marketing has taken over—and it’s a more cost-efficient way of reaching various business goals, including customer acquisition. While actual costs will depend on your marketing goal, as well the size of your budget, there’s a bigger chance that you’ll save more with inbound than outbound.
However, that doesn’t mean you should disregard outbound strategies. With the right placements, combined with your inbound tactics, you’ll be able to increase the efficiency of your marketing goals.
The Components of Inbound and Outbound Marketing
What gives these two methods their price tags? Explore the parts of an inbound and outbound marketing strategy below.
• Content production – Includes website hosting (CMS), blogging/writing, content calendar management, and the like. If you’re not writing the content yourself, you need to consider hiring in-house or outsourced writers for the job.
• Social media marketing – This is another service you want to be handled by experts such as copywriters and social media marketers who know how to utilize the ad platforms of each channel.
• CRM and automation tools – Of course, you’d need your marketing software to be able to handle everything that’s going on, and so you can make your marketing efforts flow smoother. The prices of these tools vary; some are free, while some are not.
• Ad space – Traditional ads need to rent ad space to work or be effective.
• Market accessibility studies – You would need to hire experts who can scout the best locations for your out-of-home ads.
• The novelty of idea – Most outbound strategies need the help of creative agencies that can execute a big idea in hopes of creating brand awareness.
A Healthy Mix is What You Need
It’s best to mix outbound and inbound strategies for your goal in attracting customers and building a relationship with them.
Inbound marketing and
On the other hand, outbound marketing is your go-to strategy if you want immediate brand awareness and results on your customer acquisition efforts. Of course, getting your business to scale quickly translates in higher costs. Each lead acquired through this medium will cost more. Plus, when you stop your outbound strategies, customer conversions will halt.
So, if you’re thinking of launching a new product or scaling your business, go for outbound and inbound strategies to maximize your budget for customer acquisition.