One of my favorite quotes about inbound marketing is from Guy Kawasaki, the Silicon Valley venture capitalist, best-selling author and former Apple executive:
"If you have more money than brains, you should focus on outbound marketing. If you have more brains than money, you should focus on inbound marketing."
Inbound marketing is a burgeoning area of marketing that focuses on attracting prospective customers online with valuable content, and then converting them into leads. Inbound marketing tactics include the use of blogs, social media, e-books, white papers, search engine optimization and webinars. In essence, inbound marketing is all about earning your prospect’s attention.
Outbound marketing includes the more expensive, traditional, interruptive marketing tactics, such as advertising, telemarketing, direct mail, spam email and trade shows.
David Meerman Scott, author of “The New Rules of Marketing & PR” describes outbound marketing as where one must “buy, beg or bug their way in” to a prospect (via paid advertising, issuing press releases or paying commissioned sales people).
The reason for the growing success of inbound marketing and the decline of traditional outbound marketing is because of dramatic changes in the way people buy.
Because of technology, consumers are increasingly able to tune out marketing messages. Examples of the technology that enables consumers to avoid unwanted marketing messages include DVRs, caller ID, satellite radio, iPods, email spam filters, Internet ad popup blockers, RSS readers and “do not call” lists.
Just a few years ago, when a customer wanted product information, soon into their buying research they would need to contact the seller. Then, the buyer became a lead and the seller, who controlled most of the product information, could exert control over the sale.
Now, a buyer can thoroughly research your company or product online and avoid your sales person until they are ready to buy. An example is a car buyer who thoroughly researches her purchase (costs, options, car reviews) and might know more about the product than the salesman. The same applies to business-to-business sales.
As a result, marketers are finding traditional, outbound marketing to be increasingly less effective. A few points to consider:
- 86 percent of people skip television ads.
- 44 percent of direct mail is never opened.
- 200 million Americans have registered their phone numbers on the FTC’s “Do Not Call” list.
- 91 percent of email users have unsubscribed from a company email that they previously opted into.
- 84 percent of 25- to 34-year-olds have left a favorite website because of intrusive or irrelevant advertising.
In contrast, inbound marketing is on the rise, primarily because of its return on investment (ROI).
- Inbound marketing costs 62 percent less per lead than traditional outbound marketing.
- The amount of money spent on company blogs and social media doubled in the last year.
- 57 percent of businesses have acquired customers through their company blog and 42 percent through Twitter
The inbound marketing process can be broken down into six steps:
- Develop a successful marketing strategy – including goals, objectives, challenges, buyer personas, competitive analysis and a determination of ROI.
- Create and maintain a powerful website – which is the hub of all your online marketing and lead generation. The site also needs to be mobile ready, search engine friendly and easy to update.
- Generate more traffic – in order to increase the number of opportunities for visitors to turn into leads. Blogging, social media and search engine optimization (SEO) play a large role in boosting site traffic.
- Convert traffic to leads – by creating attractive offers and calls to action that appeal to potential buyers at all levels of their sales journey.
- Convert leads into sales – using lead intelligence to score, segment and nurture your leads (with email), you can continue to build stronger links with your prospects until they are ready to buy.
- Measure everything – and then do more of what’s working and less of what’s not working. Analytics to measure include site traffic, SEO, your blog, social media and email.
Will outbound marketing go away? Probably not. But the power it has enjoyed for the last 75 years will continue to decline and be overshadowed by inbound marketing.
(This article originally appeared in Inside Business - The Hampton Roads Business Journal, on August 13, 2012.)