Inbound vs. Outbound Leads: What's the Difference?

By Indeed Editorial Team

Updated February 15, 2022

Published May 25, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Generating leads to increase revenue is an essential marketing practice for most businesses. It's the process of attracting potential new customers in hopes of converting them into customers. There are different methods for generating leads, so it's important to know how to develop an effective lead generation strategy. Knowing whether to approach a prospective customer or have them come to you first can be the difference that leads to increased sales. In this article, we define inbound leads and outbound leads, as well as compare their similarities and differences.

Related: What Is a Sales Lead?

What are inbound leads?

Inbound leads are sales leads that contact you first and passively pursue. Attracting these leads requires developing strategic campaigns and good campaigns that bring users to your website and engage them. These campaigns often involve using social media and search engine marketing to promote your company to broad audiences. Inbound leads may also contact you based on the recommendations of others.

Inbound leads empower the customer to make the decisions in the lead generation process. Converting them into leads and eventually, customers, relies largely on their desire to know more about you. They decide how much they want to interact with your company, and they determine if or when they want to contact you.

What are outbound leads?

Outbound leads are sales leads that you contact first or actively pursue. Attracting these leads often requires paid campaigns to extremely targeted groups, especially through social media marketing and search engine advertising platforms. You may also pursue outbound leads by researching specific prospects and directly contacting them through methods like:

  • Cold calls

  • Direct mail

  • Display advertisements

  • Events

  • Mass emails

Outbound leads allow your company more control over your leads. You determine the specific audiences or clients you want to attract and convert. However, this may result in pursuing leads that are initially uninterested in making a purchase, requiring you to dedicate more time to nurturing the lead.

Inbound leads vs. outbound leads: similarities and differences

Many companies rely on a combination of inbound and outbound leads to convert new clients. However, each type of lead offers unique benefits. Factors like your business model, budget and customers may affect which type of leads you prioritize. These are some more things you might want to know about inbound leads versus outbound leads:

Similarities

Here are some similarities between inbound and outbound leads:

Purpose

Both inbound and outbound leads exist to help you generate leads. They help you attract potential customers and create a demand for your products or services. Once you gain leads, it's important to nurture the leads to convert them into loyal customers.

Return on investment (ROI)

It's difficult to predict the exact ROI of both inbound and outbound leads. Both leads may require investing time and money to attract and manage the lead. However, both may offer strong potential for a good ROI.

Related: What Is ROI in Marketing?

Understanding of markets

Inbound and outbound leads both require you to understand your target audiences and their specific segments. It's important to understand your target audiences for inbound leads, so you can properly tailor content or ads. Similarly, it's important to understand your target audiences for outbound leads so that you only contact potential leads that might benefit from your products or services.

Differences

Here are some differences between inbound and outbound leads:

Speed

Inbound leads often require more time than outbound leads. Inbound leads rely on organic channels and growth, such as word of mouth or search marketing, to attract potential leads, and developing effective marketing campaigns with excellent content also often requires a lot of time. Outbound leads also require research to identify potential leads, but most contact methods for these leads are faster than inbound strategies.

Level of awareness

Inbound leads typically have a higher level of awareness of your company than outbound leads do. Inbound leads contact you themselves based on the recommendations of others or their prior knowledge of their work. However, seeking outbound leads is similar to cold-calling, meaning many leads have little to no level of awareness of your company. While some outbound leads may have a high level of awareness of your company, it's generally unlikely.

Related: Brand Awareness: Definition and 6 Ways To Improve

Targeting

Outbound leads require more specific targeting than inbound leads. Outbound leads involve researching and identifying exact companies or people you want to target. Inbound leads, however, have less control over target markets. These leads rely on general characteristics to attract certain types of clients.

Trust

Both inbound leads and outbound leads require you to build trust with potential customers. However, inbound leads require building trust and gaining credibility before the lead contacts you. Outbound leads focus on building trust and developing a relationship after you contact the lead.

Timing

Inbound leads often have better timing in the purchase cycle than outbound leads do. Inbound leads contact you first, signaling they're thinking about or ready to make a purchase. However, as you cold-call outbound leads, you may contact them at a time they're uninterested in or unprepared to make a purchase.

Related: Guide To Buying Cycles (With Tips)

Quality

Inbound and outbound leads both have the potential to be high-quality leads. However, inbound leads are often higher quality or more promising leads. This is because they're already familiar with your company and made the choice to contact you, meaning they already trust you and do not need to be convinced of the quality of your company as an outbound lead would.

Cost

Outbound lead campaigns often cost more in a shorter period of time. The higher cost relates to contact methods and running shorter campaigns to reduce risk of losing money because of unsuccessful campaigns. Inbound leads, however, typically cost less over a longer period of time. These campaigns are gradual, relying on earning organic traffic to attract leads.

Related: Organic Search vs. Paid Search

Control

Inbound leads provide you with less control over your leads than outbound leads. This is because inbound leads contact you first. However, your company can still decline working with an inbound lead that may not be a good client for your organization.

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