In the world of sales and business development a lot of approaches and subdivisions exist. And depending on the sales professional, their vision on using this or that way of business development might be different. Whichever combination you might be using, there are still two main types of sales – inbound and outbound. So let’s take a look at the difference between them, specifics and when we should use it.
Definitions
Inbound sales is the approach which mostly relies on inbound inquiries that your business might be getting from different sources. In a simpler words it’s a scenario where your potential customers find you by themselves and are the first ones who initiate the conversation. The sources through which the leads might be finding you can be different. Usually they are following: website, advertising, marketing campaigns, word of mouth, web research, referral systems etc.
Outbound sales fully rely on active cold outreach. In this case you initiate the conversation and try to get in touch with relevant decision makers or buyer personas. Here they might know nothing about your business.
Strategies
In an inbound approach, sales professionals most frequently rely on marketing, which is responsible for lead generation. Or word of mouth. One of the main goals for the marketing team here is to land people to your website where they could learn more about the brand and at the end of the day – leave an inbound inquiry. Or if you mainly rely on word of mouth, then you need to be sure that your network keeps on expanding periodically with new valuable connections.
In this approach the sales team mainly works with warm leads who get familiar with your brand thanks to marketing activities. Thus their main challenge here is to qualify if an inquiry is relevant or not, its quality, find out the customer’s budget, delivery timeframes and close the deal.
If your business fully relies on inbound strategy, you need to be sure that leads pipelines get filled in with quality inquiries regularly, and your salespeople have enough work to do.
Outbound approach implies dealing with cold leads and businesses / decision makers which might know nothing about your brand, thus you need to attract their attention first. Here you need to build a good lead generation process which will be warming up cold leads that later might be grown into quality prospects and in the end – closed deals. Lead nurturing takes time which makes this strategy more complicated and which might imply longer sales cycles. This is one of the reasons why many companies and sales professionals see outbound sales less effective. According to Mailshake’s statistics, sales people tend to stick to the inbound approach much more than outbound. And it’s a pity, because the outbound approach is a great one, but you need to build your processes and strategy right to make it work.
Pros and Cons
Apparently, each approach has its pros and cons. While choosing the one for your business, you must not only think about the results you want to achieve, but also about “Hows”. Which resources will be required for that to happen, budgetary investments, right tools to be used and many other points.
Inbound sales usually imply the work with warmer leads which already know something about you or at least their interest is already formed, so that they find your website and leave an inquiry there. On the other hand, this approach requires a strong marketing to be built in order to generate leads and grow brand awareness. In crisis times businesses become more reluctant to spend their money on further development and trying new products / tools. So it might be challenging to maintain your pipelines busy with fully relying on inbound sales.
Outbound sales imply the work with cold leads which might result in longer sales cycles and lower quality of leads generated. This approach allows you to grow brand awareness through active outreach of your sales development representatives to potential customers. Moreover, in order to make outbound sales work, you need to be sure that your ICP / VP / Buyer personas are clear to everyone in the team. So that the team would reach out to relevant people and businesses.
One of the biggest advantages of outbound sales is their ability to stay operational in any circumstances – either it’s crisis or seasonal fluctuations.
Common mistakes while choosing an approach
Defining an approach to use for building your sales strategy is always complicated and it involves a lot of points to take into account. And of course there’s no silver bullet which will guarantee you 100% success. I believe there are several important points you should think about while choosing the approach for your team.
People available
It’s not a secret that sales is about people, and its success quite strongly depends on the people you have and their quality. If you plan to build a strong outbound process without having someone who knows how to do it – it won’t work, because starting to reach out to people and writing emails is not enough. Or if you have dozens of inbound inquiries coming but there’s no one processing them, it won’t work either.
Expectations management
Expectations is another very important point in sales strategy implementation success. And its importance is quite often underestimated. What do you expect from the sales team to achieve? How fast? How frequently? Are your expectations aligned with the team?
All these questions are crucial whether you are a business owner or sales executive. If your expectations are not feasible to achieve with the tools, people and budget in place, at the end of the day you will feel disappointed. And so will the team which will know they could not meet your expectations.
Lack of budget
If you decided to go with inbound without having marketing generating the leads, you will apparently find the sales team not hitting their goals. The same works for people, as mentioned in the first point. It’s impossible to build a 3 floor house for 1000 EUR, so you don’t expect this to happen, right? At the same time I saw quite some business owners willing to land several million deals by investing 1000 EUR into their sales or marketing activities. Would be great! But unfortunately, it does not work this way.
Team support
Let’s imagine you have great people, built up the right expectations and aligned them with the team, allocated a good budget. But you did not think about sales team support. Is it critical? No it’s not. But sometimes it might be a bottleneck. If your sales team generates a good pipeline of leads, but on the proposal formulation step they don’t get decent support from the technical or product department, you might be losing your customers. So be sure that they get all the assistance they might need in advance.
No KPIs / analytics
It’s not a secret that in order to understand your ROI you need to have good analytics in place. The same principle applies to sales – just because it’s your investment too. How can you understand if your sales team moves good enough or not if you don’t have any metrics to analyze their performance? So think about it in prior and build a good framework you will use to keep a track of the progress.
Summary
So now, knowing all the nuances and differences between outbound and inbound sales – which option would work best for your business? I would recommend a hybrid approach and not to rely on one of them. It will allow you to stay more flexible in case of market turbulence and crises. Of course, it will imply big investments and might be challenging from the management perspective. So if you need to define the specific one to begin with – analyze your business and possibilities. If your budget is strictly limited, I would recommend to consider outbound sales. But always remember about the duration of the sales cycle. If you have a decent budget to spend on marketing, then definitely start from inbound one. And the most important – constantly analyze, adjust and keep on going.
