Ah, lead generation! The cause of countless migraines among both, starting and experienced entrepreneurs. It’s a never-ending struggle to find more prospects, make them interested in your offer and - in the end - make a business flourish.
There are so many lead generation strategies. Which of them I should choose, in which direction I should go, you might ask.
Luckily, I’m here to help you.
In today’s post, I’ll show you two different approaches to lead generation: inbound and outbound. I’ll show you the differences between these two and describe a couple of strategies that work for our company best.
Outbound vs inbound lead generation
Since we all know what lead generation is (a business process helping to identify and attract potential customers), we need to understand what’s the difference between outbound and inbound lead generation.
Outbound lead generation is focused on looking for new prospects and trying to interest them in our product. Under “inbound” signboard you will find all actions that will make your customers want to find you and learn more about you.
In other words, while outbound is about finding customers, inbound is about being found.
So, for example:
- cold calling is an outbound action because you’re reaching out to get people familiar with your offer,
- blogging is an inbound action because it attracts right people to your website,
- using display ads is an outbound action because it presents your offer to people who haven’t heard about you,
- social media management is an inbound action because you tighten your relation with potential customers and make yourself attractive for them.
How to calculate cost per lead
As every strategy, inbound and outbound lead generation have their supporters and opponents.
There are people who think that outbound is the best way of finding prospects, but I can tell you one thing: if you’re not a natural born salesperson, you might find this method way too expensive.
The best way to check out whether inbound or outbound should be your strategy of choice is to check the cost per lead. The higher the cost is, the more expensive for your company a particular strategy is.
Divide your marketing actions into inbound (content marketing, social media, search engine optimization etc.) and outbound (cold calling, press releases, paid reviews, paid ads, and basically everything that’s paid).
Now, take your one-month marketing spend and divide it into the number of inbound or outbound leads. The result will tell you how much money you send per lead with each method.
One month marketing spend / New leads per month = Cost per lead
This data will also tell you which channels have the lowest cost per lead and which of them have the highest potential to generate more conversions.
Inbound lead generation strategies
There is no secret recipe for a success. For some companies outbound works best, for others, inbound is the source of the majority of leads. For us, inbound lead generation works best, so I’m going to focus on four strategies that give us great results.
Since it’s natural that I’m in love with the tool we’re building, I’m also realistic about live chat lead generation abilities.
Live chat is a great tool allowing your website visitors contact your support. Since many people (not only Millennials!) don’t like to make phone calls, chatting is an easy and stress-free way to get the information your website visitors want.
Here are numbers from our customers proving live chat attracts customers like a magnet:
- The Chat Shop made $4.4 million in sales over 9 months,
- Touch Support claims that 30% of revenue comes through LiveChat,
- Tripshock got 50% more enquiries and two-digit sales growth after shifting customer service to live chat,
- Luxury Estates International had 30% higher conversion rate thanks to live chat.
How does it work for you, you might ask. Well, our website visitors who chat with us before or during trial period are 3 times more likely to convert than those who did not engage with us. You don't have to believe me, try LiveChat for free and see for yourself!
Content marketing is not only about blogging. It’s also about other resources like podcasts, ebooks, reports or knowledge bases. All these materials are made to give value to our website customers, make them familiar with our brand and maybe attract them with our offer.
For example, our blog drives 100k unique visits per month what means that each month our brand is showcased to 100k people. Another example is our Customer Service Report 2017 that had over 10k visits, lots of press mentions and thousands of shares.
The lead generation value of such numbers is huge, but additionally, content marketing builds your credibility, build loyalty, trust and brand awareness.
Social media is a fantastic customer service tool from one hand, and a credibility builder from the other. It helps to make connections with influencers, build audience and interest in a brand. It’s also a great help for potential customers who post their inquiries on Twitter or Facebook.
There is one condition though: you have to treat social media like a full-time job. Only then it will bring you results. Since we have a social media manager who watches over our social media channels, social media traffic tripled, and we’ve gained over 25k followers.
Email marketing is an awesome way to stay in touch with potential customers even if they don’t want to buy your product now. As long as your emails give them benefits (knowledge, promotions etc.), they will stay with you no matter if they are willing to buy your product now. They might buy it in the future, as long as they remember about your brand.
But newsletters are not only dedicated for customers-to-be, they are a great way to stay in touch with those who have already bought from you and can do it once again.
For example, our email database is quite big (over 220k) and it gives us a great chance to stay in touch with all people who might want to buy our product or recommend it to a friend.
Choose the right lead generation strategy
Although the difference between inbound and outbound lead generation is not obvious at the first sight, in fact, it’s very simple. It’s all about who initiates the first contact. When the marketer initiates it, we’re talking about the outbound lead generation. When a potential customer is initiating the contact, it’s inbound lead generation.
Despite differences though, inbound and outbound have the same goal: it’s lead generation.
Outbound can produce results quickly (when done right) and inbound usually takes a longer time to implement but can potentially lead to more opportunities over a longer period. For us, inbound lead generation is the most valuable, but others might find outbound actions more profitable.
So, as always, the solution isn’t easy: it’s all about you think fits your industry and company the most. The key is to understand your target audience so you can leverage the most cost-effective practices to reach them.