You’ve got a great product or service—now it’s time to tell the world about it so your startup can begin making some noise and some sales. Now, you may have heard about outbound and inbound marketing, but which one is right for your startup—and how can you blend a campaign into your financial model?
Let’s first start by defining outbound and inbound marketing, respectively.
Outbound marketing is what many people traditionally think of when they hear the word marketing. Adobe defines outbound marketing as proactively reaching out to consumers to get them interested in a product. By contrast, inbound marketing centers on creating and distributing content that draws people to your website. Common outbound marketing activities include video, banners, social media, search engine ads, print advertising, billboards, trade show booths, seminar series, and cold calling.
Outbound marketing is also thought of as interruption marketing because it asks people to pause what they’re doing and pay attention to the message—or they have to get rid of it or ignore it, like deleting a spam email, changing the channel during a commercial, or hanging up on a telemarketer. Besides the possibility of blocking outbound marketing—it’s believed that the average person today is overwhelmed with up to 2,000 outbound marketing intrusions per day—it can also cost a lot and ROI can be hard to track.
Inbound marketing costs less and works harder to target people that are more likely to be interested in your content. Common inbound marketing activities include blogs, viral and influencer marketing, landing pages connected to ebooks and white papers, sponsored events, SEO and PPC (pay-per-click), and thought leadership pieces—which (hopefully) draw attention organically by providing educational, entertaining, or valuable information—and help nurture and convert leads.
Inbound marketing puts customers first
The best person to explain the power of inbound marketing is not even a person—it’s Betty Crocker. In 1921 The Washburn-Crosby company—the predecessor of General Mills, Inc.— felt that their audience would better relate to a woman giving cooking advice, so they came up with the fictional spokesperson Betty Crocker. By 1927, Betty Crocker had her own radio show and opened up real cooking schools across the U.S.
Today, Betty’s cookbook is in its eleventh edition and she has her own website and a YouTube channel. So, what’s the point of this inbound marketing tale? Betty Crocker did not start with branded foods and a cookbook—she started by giving non-invasive free advice and developing real trust—all while being aware of the buyer’s journey:
- Pain Awareness: Homemakers were struggling with finding baking products, understanding baking methods, and baking in a tasty, yet economical fashion.
- Solution Awareness: Homemakers would be willing to listen to a helpful, relatable voice.
- Solution Strategy: Provide homemakers with readymade goods, free baking and cooking tips, cookbooks, and classrooms with a wonderful customer experience.
When should inbound marketing be incorporated into your marketing
Inbound marketing is a long game—and requires a rock-solid foundation that is built over time. Cultivating a collection of content—from email lists and emails to white papers, blogs, and videos—does not happen overnight. This will allow you to perfect your inbound strategy and gradually nurture more and more leads.
Creating high-quality content and developing a sophisticated content strategy will get more potential leads to your website—but soon you’ll realize that the quality of the leads is more important than the quantity.
If you’re selling advanced, for example, advanced B2B software, it might be great that many university students are visiting your page, but what are the chances that these interactions will lead to sales? Almost null. You want high-quality leads or ideal prospects who are more likely to convert into sales. Hence, your inbound strategy should focus on creating informative and personalized content that matches your ideal buyer persona profiles.
Besides fostering trust and credibility, 61% of inbound marketers believe that SEO is key to online success. Yet, as you’re making your company and its website more visible, you still want to evolve as your startup grows. Two winning techniques include:
- Talking to your customers: If you are nurturing leads and converting leads and they keep identifying the same problem with filling out your forms or the onboarding of your sales product or service—listen and make the appropriate changes. If you are at the Seed or Series A level you may not have enough data to understand your customers—so just talk to them.
- Delivering the magic moment: Make sure that—rather than just getting the word out about your product—potential customers have a definite moment when they realize that they have to have your product or service.
How should inbound marketing be incorporated into your startup financial model?
Now that you have a better idea of some of the methodology, philosophy, and benefits of inbound marketing, you might be anxious to get started—but you need a marketing plan that can track and show real ROI—and become a part of your startup financial model.
In a perfect world, marketing gurus will lay out this formula for successful inbound marketing:
- Attract strangers: With the right blog, content strategy, and social media, turn people who didn’t know your brand into visitors.
- Convert visitors: After you have eyeballs on your page and reading your content—get them to fill out forms, set up meetings, use chatbots to send messages, and put these new leads into your CRM.
- Close leads: After you have a new supply of leads, it’s time to manage your pipeline, nurture the most promising leads, and start lead scoring—the process of assigning scores to prospects and potential customers based on relevant data.
- Delight customers: Now that you have closed some leads, it’s time to make sure they have a great experience—and hopefully refer you to other potential leads.
This sounds great on paper—but what about actually incorporating inbound marketing into your startup financial model? You’ll need to start by estimating revenue generation from your marketing spend—and selecting the right metrics to ensure that your inbound campaigns are reaching the right audience. These metrics will depend on your marketing goals. If, for example, you have a brand new start-startup and simply want to get noticed and build awareness—focus more on social engagement, impressions, and organic traffic. If your startup is more mature, you’ll want to put more attention on lead acquisition rates, landing page conversion rates, and even CLV (customer lifetime value).
Popular inbound marketing metrics
Landing page (LP) performance
A good majority of inbound marketing will start on a landing page—but how can you be sure your LP is connecting the right potential customers to your product or service?
Traffic volume
It’s not just a matter of people coming to your site—it’s what they are doing and who they are. It’s also wise to know where people are coming from—is it the traffic organic, from email or social media, from PPC (pay-per-click), or is it direct traffic?
Bounce rate and click-through rate (CTR)
Does your LP take visitors to a page and then they leave within a few seconds? This is a negative bounce rate. CTR, meanwhile, lets you know how people are interacting with your LP.
It’s also good to see how many pages the average reader is clicking on and to keep track of how long each stay is on your page.
Lead conversion rate
While it’s great to be getting eyeballs on your page, you ultimately want to start converting your leads. Lead conversion rate shows that you’re attracting the right audience and getting the right people into the top of your funnel.
Conversion rate
If you really want to quantify the performance of your inbound marketing—see if you are really converting leads or just wasting time nurturing them and overextending the sales cycle.
Customer lifetime value (CLV)
If your startup is really cooking with conversions, you can start monitoring the customer lifetime value, or how well you are retaining customers and building customer and brand loyalty.
Inbound marketing always values quality over quantity. You need top-notch content and want to focus on the key performance indicators—this will help you accurately predict your estimated marketing spend for your startup financial model and make sure that the marketing team is not seen as all bark and no bite.
How is outbound marketing different?
It starts the conversation before you can even ask
Have you ever been watching a basketball game and suddenly were inundated with beer commercials, been reading a book when you suddenly received a call from somebody trying to sell you life insurance, or found pop-up ads on your favorite website?
If you have ever experienced any of these forms of advertising—then you have firsthand experience with outbound marketing, an approach wherein companies initiate conversations and send videos and messages out to a targeted audience or the general populace, such as with door-to-door salesmen and billboards. The benefit? Lots of people will hopefully see your ads or videos. Doubters and haters often refer to it as the “spray and pray” or “shotgun approach” to marketing.
Advantages and disadvantages of outbound marketing
Advantages:
- It’s easy to use: Your startup might not have a huge content budget—but outbound can be much easier to implement. You can send out social media and email blasts and advertise in public.
- It’s quick and delivers emotional outcomes: An ebook might not hit you in your feels, but a billboard with a short video can. It’s quick and can hit people right in their emotional centers—all while increasing brand awareness.
- It’s easier to target and negative feedback can be easily hidden: You can reach a local audience much faster and you can avoid the dreaded chain reaction of negative feedback that can snowball on online Inbound campaigns
Disadvantages:
- It’s impersonal and expensive: If you’re an eco-friendly person who loves public transportation—you may not want to see an ad for a huge SUV. Running ads, hanging up billboards, and hiring people to make cold calls is not free.
- It’s hard to track and show the added value: It’s easy to see how many downloads your latest ebook has—how do you know how many people bought your product based on a radio ad? If your product is complex—it may be hard to show the added value your product or service holds over the competition.
- It’s difficult to get reliable feedback: How can you know what people like or can’t stand about your latest campaign? Outbound marketing doesn’t lend itself to very much dialogue.
How should outbound marketing be incorporated into your startup financial model?
Outbound marketing has fallen out of vogue for many marketers—it’s often viewed as an outdated methodology from the analog era. But, depending on the product or service, it can still be valuable for many as a startup marketecture, especially if you are selling a SaaS product. As with inbound marketing, you will need to choose the right metrics to build the right inbound marketing strategy—and effectively incorporate it into your startup financial model.
Popular outbound marketing techniques
Growing your pipeline
Want to make the lives of your salespeople easier? Give them some sustainable nurturing and lead generation campaigns that deliver qualified leads. This should start a cycle of more qualified leads entering your pipeline.
Measuring lead-to-close rate
Getting leads? Good. It’s time to close. Lead-to-close rate simply shows the percentage of leads being converted into clients.
Understanding revenue and quantity of net new customers
Turning leads into clients? Good. Do you know where they’re coming from? Even better. Was it that last tradeshow or a sponsored event? You need to know.
Pinpointing revenue-per-lead
Simply take the total revenue from a set of leads and divide it by the number of leads.
Tracking time to close
What is the average amount of time it takes your sales team to turn leads into sales? You should know.
Scanning social media numbers
In a world where people can buy likes—many think this to be a vanity metric. But, it’s still possible to understand your market awareness and recognition by understanding your social media engagement.
Finally, consider looking into what is known as retargeting or remarketing. As Amazon puts it, “customers might log in to your site and add products to their shopping cart, but leave without purchasing”. Using the email addresses provided by customers in their accounts, you can remarket by sending emails reminding them about those products, helping prevent cart abandonment.
Remarketing gives the consumer time to reevaluate. Some people are afraid to buy impulsively. Remarketing rewards patient people who like to research their purchases.
Overall, outbound marketing values quantity. You want to reach as many people as possible, but you also want to maintain and monitor key performance indicators—this will help you accurately predict your estimated marketing spend for your startup financial model and keep more qualified leads coming into your sales funnel.
Should your startup business marketecture include more outbound or inbound?
Before you start allotting dollars for your precious marketing budget, please keep four things in mind:
- Ideal customer profile: You need to understand the firmographic, behavioral, and environmental qualities of accounts that you’d expect to be your best customer.
- Product complexity: What are the number of individual parts or features that make up your product or service? It’s important to consider how it actually works, how it’s put together, and how it is marketed and sold.
- Industry and startup stage: Are you still getting seed money or preparing to IPO? Is your industry in the Wild West stage or is it a fully mature industry? Maturity matters.
- Story: Learn the difference between a real story and presenting data. Also, remember that your customers should be the hero of your story—not your brand. It’s not about you.
Now you have a better idea of whether inbound or outbound marketing is a better strategy for your startup—and you have a better idea of the main KPIs and metrics you need to track for your marketing campaign so you can integrate them into your startup financial model.
Each startup is different. You might find that blogs, podcasts, and YouTube channels (inbound) meld nicely with Google ads and trade show booths (outbound). Whatever you do, be sure to differentiate yourself. Make marketing art that will resonate with the right people—and have the discipline to project and monitor your marketing spend and marketing return.
Does your startup need help designing the perfect inbound or outbound marketing strategy? Waveup leverages cutting-edge approaches and deep industry experience to help clients develop winning sales and marketing strategies and build a scalable growth engine. Get in touch with us today.