Survey Shows Inbound Marketing Sales Leads Are Cheaper Than Outbound

by Mike Kaplan

Date

January 30, 2009 at 6:23 AM

If you read this blog, you are well versed in the differences between outbound and inbound marketing. You are also familiar with our not-so-thinly veiled opinions on which is best.

But rather than trust us or anyone else, we surveyed 167 professionals – including business owners, executive managers, marketers and sales people – who are involved in or familiar with their organization's marketing process. We asked them where they spend their marketing dollars, what marketing channels are important to them and where their leads are coming from.

We compiled the results in a newly released report, “The State of Inbound Marketing,” and will be telling you about some of the more interesting findings on this blog – starting now.

The survey resulted in two key findings about inbound marketing leads.

Finding #1: Companies that spend more money and effort on inbound marketing experience a lower cost per lead

There’s a lot of buzz around inbound marketing these days, but it is important that businesses don’t shift budget to money sucking efforts, particularly in the current environment. Thankfully, inbound marketing is just the opposite: respondents that spend the majority of their budget on inbound efforts reported a decidedly lower cost per lead than their outbound counterparts.

Of our respondents that self-reported cost/lead, those that spend 50% or more of their lead generation budget on inbound marketing averaged $84, whereas businesses spending 50% or more on outbound marketing averaged a $220 cost/lead.

Cost per sales lead

The same held true for businesses of all different sizes (small, medium, large) and types (professional services, technology, etc.). A few of these are represented in the chart above.

Finding #2: Inbound marketing activities contribute a significant portion of sales leads

We asked respondents to state what percentage of their leads are sourced from various marketing programs – ranging traditional from outbound efforts such as direct mail, trade shows and telemarketing to new inbound methods that include blogging, search engine optimization and pay-per-click. For both B-to-B and B-to-C organizations, inbound marketing accounts for more than 1/3 of all sales leads.

B2B Sources of Sales Leads

Outbound and “Other” techniques (such as print advertising and PR) do still account for a considerable piece of the pie (note: we put email marketing in its own category, because it can be used for either inbound or outbound marketing depending on the application).

We expect, however, that more and more leads to come from inbound sources over time as more customers engage with those channels and as companies come to realize finding #1 of this post.

Inbound marketing lowers cost per lead for three reasons:

  1. Inbound marketing focuses on digital methods (Web, e-mail, etc.) that cost little or nothing to produce.  
  2. Inbound methods are more targeted because you empower your prospects to find your business.
  3. Inbound methods are more measurable, allowing businesses to analyze performance and optimize over time.

So, if you are looking for ways to drive more leads at a reduced cost, inbound marketing is the way to go.

Read the State of Inbound Marketing Report

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