Inbound vs Outbound Sales: Which One Should You Focus On?

Inbound vs Outbound Sales: Which One Should You Focus On?

Struggling to figure out the right sales approach for your company? Should you build an inbound sales machine, set up an outbound sales team, or take a hybrid approach?

On one hand, inbound sales is famous for being able to attract customers to any business, be cost-effective, and scale really well.

On the other hand, outbound sales proves itself a fierce opponent. Yes, it often requires a human touch and relies on pushing ideas onto (sometimes) unsuspecting prospects, but it’s one of the most powerful ways to build trust, close big deals, and maintain control.

So who wins the inbound vs outbound sales battle?

Well, Robert Frost would be deeply frustrated with my answer, because when these two marketing strategies diverge in the woods, I pick both. It all depends on your goals, sales process, target audience, and the type of business you run.

Suffice it to say: it can get a little complicated.

To see my take on this topic, including who should use each strategy, watch the short video below where I tackle the question, “Outbound vs. inbound sales: Which should you use?”

And keep reading after you finish!

Beneath the video, we’ll unpack the pros and cons of both strategies, show you how to set up your sales team (depending on which method you pick), and track the whole process to make sure you stay in line with your sales goals.

Let’s dive in by first explaining the difference between these two sales strategies.

Inbound vs. Outbound Sales: What’s The Difference?

The main difference between inbound and outbound sales is who initiates the sale. In inbound, the prospect initiates the sales process, while with outbound the sales representative makes the first step. Instead of the prospect coming to the company, the salesperson (or business) comes to the prospect.

In inbound sales, the prospect reads an article, attends a webinar, or downloads an ebook. With outbound, it’s the salesperson cold calling, cold emailing, or even cold texting the prospect, or the company placing ads online.

The difference boils down to the direction of that first point of contact.

Though it might seem like a subtle difference, it actually has a strong impact on the type of customer the business engages with. Inbound prospects are typically more aware and more engaged to start, whereas outbound leads are normally less aware and less engaged—at least in the beginning.

But I want to be clear: neither approach is inherently better. In fact, both techniques can be powerful tools for growing a company. The sales strategy you should use will depend on several variables, including the type of business you run, your average deal size, and how aware customers are of the solutions you offer.

We’ll spend the rest of the article describing those situations to point you to the strategy that will be the best growth channel for your business.

How to Use an Inbound Sales Strategy Effectively

The easiest way to understand what an inbound sale looks like is to think about what an already interested prospect would do to find your products and buy from you.

For example, let’s say you have a SaaS company that creates invoices for freelancers.

Think: How would your dream customer organically find your business? Would they search, “best invoicing software for freelancers”, read the first article on Google, and buy the software recommended in the post?

That’s one example of a path created by an inbound sales strategy.

The key is it almost always starts by creating content catered toward interested prospects, and then placing that content where interested people can find it on their own.

From there, it’s pretty simple: be in all the places your interested prospects are searching, and you’ll build a well-oiled inbound sales machine. Obviously, being in all “those places” is where it gets more nuanced, but at a high level, that is how it works—regardless of where the content ends up.

To help you get a better picture of how inbound strategies might work for you, we’ve outlined an overarching flow for how prospects enter an inbound sales machine and begin to interact with your sales representatives.

Once you have the high-level overview, you can tailor it to your business.

What Does the Inbound Sales Process Look Like?

Every inbound sale is different because every interested prospect has different questions and is at a different level of interest before making a purchasing decision. Some prospects might read one article and be willing to buy a $1,000 product, while others need 10 to 20 pieces of content over several months (or even years) before they even decide to sign up for a free trial.

To effectively build out your inbound sales process, you need to know what that journey looks like for your buyers. That way, you can develop a sales process that supports your customer through the entire sales process.

Generally, inbound sales is broken down into four main stages:

  • Capture
  • Qualify
  • Pitch
  • Close
Inbound Sales Process

1. Identify and Capture Ideal Customers

The first step is defining your ideal customers and considering their problems. For example, suppose you sell a WordPress plugin that makes uploading compressed files on a blog effortless. In that case, it's important to consider what kind of content, tools, and resources you could create to bring your dream customers into your ecosystem.

After creating content, you need to define how you will capture these ideal customers as marketing-qualified leads. This could be through a form on your website, or a call-to-action to download a piece of gated content.

2. Qualify New Leads

In most inbound sales processes, qualification happens in two stages: before contact and after contact.

First, as a new inbound lead enters the pipeline, you can run them through automated qualification. For example, you might ask a simple qualification question on your form, such as: “What’s the size of your business?” This can tell you right away whether this new lead is likely to become a successful customer or not. You can also automate qualification using B2B data providers to run quick research on new inbound leads and score them based on preset criteria.

After your first stage of automated qualification, it’s time to hop on a discovery call with your new inbound prospect. You’ll ask your qualifying questions and determine whether this lead is a good fit for your business, and whether your product is a good solution for their needs.

3. Present a Consultative Pitch

Once you connect with the potential customer, you can encourage them to explore your solution to their problem. If we go back to the image-compressing WordPress plugin example, this is when you can let them know that you have a tool to help them.

At this stage, you’ll want to use consultative selling, listening to a prospect’s pain points and guiding them to a solution that will really help them. You may also invite them or other relevant stakeholders to a meeting or product demo.

4. Negotiate and Close the Deal

The final stage involves navigating how this prospect normally buys new products, selling all the relevant stakeholders on your solution, and getting that contract signed.

Ideally, inbound sales representatives will walk a prospect through these four steps, from the initial search for answers to buying a product. This can happen all in one session, or it can be spread across multiple days or months of consumption. It all depends on the type of product you’re selling, and how your customers typically make purchasing decisions.

When to Use Inbound Sales

One of the questions that naturally comes up when you begin to think about inbound sales is, “Who should use this strategy?” It’s important to consider because it doesn’t work for every business–or even every stage of growth!

Here’s when it makes the most sense to implement in your business:

1. If You're a Startup Without a Lot of Capital to Invest in a Sales Team

One of the biggest advantages of inbound sales is the ability to reach thousands of people with just one piece of content. Inbound marketing can provide quick, cost-effective wins for your business, especially when you’re just starting out. Whereas if you hire a traditional sales team, it takes a lot of time and capital to hire, train, and supply them with leads.

When to Use Inbound Sales

2. If You Have a Product That a Lot of People Search for Online

This one is a double-edged sword because you don’t want the search volume to be too competitive or you might never stand out. But, an inbound sales approach is hard to make work if you have a totally new solution that no one is searching for.

Even if you find slightly similar terms, educating and informing your audience will require more time. In that case, outbound might be a better choice. But if many people are searching for your solution, that's the green light for you to begin creating content that brings them to your (digital) doorstep.

3. If Purchasing Decisions Happen Fast

Inbound sales techniques work best when people can make a buying decision on a product quickly. But if your product normally takes months to sell and is very high ticket, you'll need to have very advanced content marketing and inbound sales skills (and cash) to sustain long sales cycles.

Inbound sales can still get leads interested in your solution, but at higher tickets and with longer purchasing cycles, outbound is typically going to be the one that closes the deal. That being said, there are many exceptions to this rule. Plenty of companies selling high-ticket items rely on inbound interest to turn over to their outbound sales team.

4. When You Have a Unique Advantage

Some businesses have great teams of writers, video editors, subject matter experts, or high-profile people with an existing audience that makes their content stand out. If that’s the case, inbound marketing is often worth the effort.

When we released our CRM, we knew we couldn’t just be doing outbound sales to sell CRM software. One of the challenges a CRM has is that there are really only certain times when a prospective customer is even considering buying a new CRM.

A company needs to be very unhappy with their current solution to buy a new CRM, because switching all the customer data from one CRM to another, developing new processes, and training the staff is quite a lot of work. Thus, we needed a way to get in front of people who were currently, or in the new future, interested in getting a new CRM.

We knew we couldn’t compete with paid ads because there are publicly traded and venture-funded companies willing to bid high and lose a lot of money on ads just so they hit certain growth numbers. But we did have a level of sales expertise that no other CRM had, and that was our unique advantage with thought leadership and tons of sales experience. We leveraged that to share advice and attract leads before they were ready to buy a CRM.

5. When Targeting an Audience That Doesn’t Respond Well to Outbound Sales

Some buyers simply prefer to do research and buy online on their own. For example, if you’re selling to solo developers, they’re much more likely to view a cold call as annoying than other groups of buyers would. In that case, inbound sales may be the better strategy for attracting your target audience to your brand.

Beware of the risk of trying to emulate Hubspot. They've used content marketing to drive incredible growth and literally coined the term "inbound marketing." While companies of any size can create a winning content marketing strategy, very few can actually execute the Hubspot playbook.

Here's how Jacob McMillen expressed it candidly in an October 2019 post on his LinkedIn profile:

Too many companies simply try to copy a strategy that has generated success for other companies. What you need is a strategy that's right for you!

Case in point: Yours truly here at Close! For the longest part of our history, Close's content marketing was a two-person team. Compare that to how many people are in some way, shape or form touching content at Hubspot:

Hubspot content team

If we had tried to emulate Hubspot's content machine, we'd have failed miserably because we're fundamentally different companies.

Hubspot raised hundreds of millions from investors, and billions from the public markets, and heavily prioritizes growth.

At Close, we believe the best way to fund our growth is through revenue—which forces us to stay obsessively focused on our customers. Taking money from investors or going public would mean we'd have to split our focus between customers, investors, and shareholders.

Neither approach is better per se—it just depends on who you are and what kind of company you want to build.

There are other cases when inbound marketing may make sense. But those are the most common times when you should look at it first.

So what about outbound?

How to Use an Outbound Sales Strategy Effectively

Outbound sales sometimes gets a bad rap because it’s associated with the sleaziest two words of all time: “cold calling.”

But the reality is, cold calling is just one of the many methods of outbound marketing. And if you do it right, outbound sales doesn’t have to be “icky” or “sleazy.”

In fact, outbound marketing is now less invasive than ever before, thanks to the massive amounts of data we have access to. The key is to remember that outbound campaigns versus inbound campaigns isn’t about invasive versus non-invasive selling.

It’s a game of who initiates the contact first. In outbound, initiating content has to be done carefully. But when done well, it’s powerful.

What Does the Outbound Sales Process Look Like?

Unlike inbound sales, which starts with the prospect, outbound sales begins with an action of a salesperson or company. Once contact is made, the sales process moves the customer through the sales process from unaware to customer.

Here’s an overview of the typical flow for an outbound sale:

Outbound Sales Process

1. Prospecting

Like inbound sales, outbound begins by building lists of potentially interested prospects. But unlike inbound efforts, this is less about who we want to attract and more about who we really want to reach.

Sometimes sales reps buy lists of people who are similar or lumped together because of some demographic information. Facebook, Google, LinkedIn, and other ad networks have also made it possible to build lists of people based on their interests and location.

But for a more targeted way of building lists, you should be using your ideal customer profile to identify key criteria for success, and then using research to discover the right match. B2B data providers like Clearbit or ZoomInfo help you do preliminary research and find valid contact information and email addresses of specific individuals you want to engage in a sales conversation.

2. Outreach

After you’ve built your outbound sales list, it’s time to start targeting them with phone calls, emails, and advertisements, or have a field sales team that visits prospective customers at their own business. The goal of these efforts is to get prospects to respond to your messages or take your calls so you can start the real sales process.

3. Qualifying

Once you win a prospective customer’s attention, the very first milestone is to figure out: is this someone who would actually benefit from what I’m selling? You really need to selflessly assess whether it’s in the prospects’ best interest to buy, before you can then selfishly move them toward that buying decision.

Qualifying sales prospects is one of the skills I look for the most when hiring sales reps. Almost everybody is focused on their pitching skills, handling objections, drumming up business, and closing the deal… but qualifying a prospect is really the foundation of a great sales process. If you get really good at qualifying prospects, you’ll waste less time on prospects that won’t convert.

4. Pitching

Once you’ve qualified them, it’s time to make your sales pitch. It’s all about creating a vivid mental image in the prospect’s mind of how they’ll benefit from your solution. You want them to want what you have to offer.

5. Objection Handling

No matter how well-qualified a prospect is for your offer, they’ll most likely still have concerns you need to address before they’re willing to make a buying decision. How do you handle their objections? By showing them the value of your solution.

6. Closing the Deal

Once you effectively address all objections, some prospects are ready to buy. But you still want to guide them through that step. You need to actually ask for the close. I can’t believe how many times I’ve witnessed a sales conversation that went really well but ended with a vague promise to chat again soon.

Where’s the close?! In sales, you gotta ask for the close early, ask often, and embrace the no. One of the best ways to close deals is what I call the virtual close—asking what it will take to turn them into a customer.

Think of it like a doctor advising a patient on a course of treatment. If the doctor is certain a medicine will help the patient get better, they’ll clearly communicate why it’s important for the patient to adhere to the treatment plan.

When to Use Outbound Sales

Now you understand what outbound sales is and how the process works. So, when does it make the most sense to implement outbound sales tactics in your business? Here are six signs outbound sales is a good fit.

1. You Have an Expensive Product + Enterprise Clients

Outbound sales strategies are ideal for enterprise customers who are unlikely to reach out to you. Having a pricey product is also a sign you need to prioritize outbound sales techniques because the potential pool of prospects you even can sell to is relatively small.

2. If You Have a Totally New Solution to a Problem

Inbound sales relies on online searches. If prospects don’t know your solution exists, they won’t be looking for it. In this situation, it’s unlikely people are even aware there are solutions out there. In this case, it’s nice to have salespeople and advertisements to make consumers aware of your offer–and the value you deliver.

3. If Your Products Have a Long Sales Cycle

A long sales cycle means you’ll need to follow up—and do it often. The good news is marketing and sales automation tools make this process easy and painless. A predictive dialer, for example, will allow reps to speed through their call list so they spend more time actually speaking with prospects on the phone. Sales email sequences (aka drip campaigns optimized for salespeople) help you stay on top of follow-up emails.

Sales Sequence for Outbound Sales

4. If You Can Afford to Pay Healthy Commissions to Sales Reps

If you can afford to pay higher commissions, it means you’ll be able to attract top talent. If you’re selling a product with razor-thin margins, you won’t be able to pay much for ads or to salespeople to do the marketing for you. You need a high-ticket item so you can get the economics of outbound sales to work. While with inbound, having a large number of small deals generate the bulk of your revenue is fine, with outbound, you really need to go after a few big wins.

5. If You’re Targeting an Audience That Doesn’t Mind Cold-Calling

Some audiences don’t mind getting sales calls. In those cases, it may make more sense to rely on outbound sales teams to walk the customer through buying so they’re not left to figure it out online on their own. That being said, almost nobody likes being cold-called. Everybody is busy, everybody has enough going on in their own life, and we don’t want to be interrupted by someone who’s trying to sell us stuff.

6. You Have a Very Clear Target Audience

Outbound sales is like hunting. That means you can laser-focus on key people. For example, if you want to reach data scientists at Spotify, outbound is the way to go. With inside sales techniques, you stand no chance of hitting a target that small. Outbound easily can.

What about the tradeoffs between the two methods of selling? Are there downsides if you pick one over the other? Let’s look.

Pros & Cons of Inbound Sales

There are a lot of pros to using an inside sales strategy. We’ll break them down in the following section, as well as include some common cons you may run into if you go with this method:

Pros

  • It can be applied to almost any business: Whether your sales team works exclusively with B2B or B2C or some combination of both, inbound sales—from Facebook to email campaigns to a sales-oriented website—can be used as part of your strategy.
  • It’s highly scalable: You can create one blog post that can reach an unlimited amount of people. That’s the power of the internet. Remember, no salesperson can call every single interested party in the world. So as long as the post is engaging (and hopefully primes the reader to buy), then you’ve created an asset that can be used for years to come. On the flip side, there are also millions of blog posts out there that never get a single eyeball. So if you create content, make sure you also have a strategy in place for getting it in front of the right people, whether that’s search engine optimization, partner promotion, paid ads, community engagement, or other methods.
  • You can go lean: Because this sales strategy is so scalable, using an inside sales strategy means you can have a leaner team and still generate substantial leads.
  • It creates less sales friction: The average B2B buyer reads 13 pieces of content before making a purchase. With an inbound sales process, your prospect can do as much or as little research as they want in advance and then purchase at whatever time is most convenient for them.
  • It positions you as a leader: Creating inbound content can position you and your organization as a thought leader in your industry. By creating quality content, staying ahead of the trends, and offering a unique perspective to the conversation, you’ll differentiate yourself from your competitors.

If you want another added bonus, you’ll become a trusted voice among your buyers, and your sales team will look more credible.

Cons

  • It takes a lot of initial effort: It's easy to think you can write a blog post and see it start driving massive amounts of traffic. Unfortunately, there’s a learning curve to content marketing. You’ll need to invest a lot of effort before you’ll start to see results. Don’t assume content marketing will start driving revenue in a few days.
  • There’s a massive time commitment: Inbound sales works as well as you do. So if you haven’t spent the time building a solid foundation, then your strategy will erode. There’s a “startup cost” to creating any content, especially high-quality, converting copy, regardless of the platform. Any campaign will require an investment in your team’s time... without the satisfaction of immediate flashy results.
  • It doesn’t always work for high-ticket items: Because an inbound sales process gives the research power to the consumer, converting for high-ticket items can be more challenging. If an objection isn’t addressed in the content that buyers are perusing, then you may have lost the sale before you even had a chance to know you had it.
  • It requires your team to have a diverse skill set: Your team must have an array of skills to make content marketing work. That includes writing, editing, marketing, data tracking, and more.
  • Data is king (but can be confusing): All good salespeople know how important data is to closing sales, predicting future success, and even forecasting sales. However, with an inbound sales strategy, tracking data and ROI can be difficult, especially with leads coming from so many channels.

Having a solid CRM is key, and so is knowing how to implement web analytics to capture data across all channels. Otherwise, you’ll never know how effective your campaign was or how to replicate it.

Pros & Cons of Outbound Sales

Considering outbound sales? Before you build your sales team, here are a few factors to keep in mind.

Pros & Cons of Outbound Sales

Pros

  • It (still) works: No matter how much the world has changed, the fundamentals of sales remain the same. A study by Marc Wayshak found, in a world dominated by social media and email marketing, the phone is still a tried-and-true sales tactic — 41% of respondents said the phone is the most effective sales tool at their disposal.
  • It’s predictable and scalable: The beauty of nailing your outside sales strategy is you get a predictable, scalable growth mechanism for your business. As you continue to develop a sales process and hire new reps, you’ll have the formula for success. You’ll know the actions to take now that will affect your revenue three, six, and nine months from now.
  • You can get immediate results: An outside sales process means you’ll get instant feedback from your prospects and be able to generate leads much quicker than inbound. As I mentioned, inside sales takes time to become successful, so if you’re looking to move fast, outbound is for you.
  • You have a bullseye: Outbound sales allows for more targeted lead generation. You can execute with precision and accuracy, and be much more effective in your targeted outreach. For example, if you want to reach the VP of Marketing at Microsoft, outbound is the way to go. Good luck trying to get his attention with inside sales techniques!
  • Human contact is irreplaceable: The most impactful and influential sales outreach strategy is one-on-one contact. No amount of digital marketing can replace the engagement between a sales rep and a prospect. Everything else pales in comparison when it comes to the impact you can have on an individual buyer when you can speak to them directly.

Cons

  • Cold calling has a bad rap: When people think of outbound sales, the first image to come to mind is a telemarketer calling during dinner, evoking eye rolls and sighs all around. Keep this hurdle in mind the next time you pick up your phone, and make sure to rethink and/or refine your sales script or sales pitch to overcome this stereotype.
  • You’re always going to be interrupting people: Outbound sales and interruption go hand-in-hand. And because American adults are bombarded with sales pitches and advertisements constantly — around 4,000 to 10,000 each day according to Forbes— it’s imperative that your sales team understands adults are fine-tuned to tune out a sales pitch. Your team will have to hustle, holler, or hands-down buy their way in to avoid being ignored.
  • It requires the right sales toolset and mindset—plus a lot of discipline: Outbound sales takes time, which requires your sales team to stay motivated. It also requires the right sales stack to stay on top of follow-ups, leads, and tasks.
  • You need a motivated sales team: To be successful in outbound sales, you have to keep going, and going, and going. If you stop, well, so do your outbound sales. And you’re encountering no's from prospects every day. Rejection is an outbound sales rep's daily experience. One of the big advantages of inbound sales is that it keeps generating leads even if you stop doing it. But as soon as you stop doing outbound, it stops generating new business. It’s like a faucet you turn on or off. That’s why sales motivation is so important for outbound teams.

Setting Up Your Inbound and Outbound Sales Teams

Now, you’re ready to set up your inbound and/or outbound sales teams! But if you get stuck, we recommend these guides for more specific training for your sales team, how to structure your inbound sales team, ways to innovate within the traditional inbound sales approach, and more.

Best Outbound & Inbound Sales CRM Solutions

Sales reps spend nearly 15 workdays a year just entering phone numbers. That doesn’t include all the time they spend manually entering notes, keeping track of follow-ups, or even writing cold emails. If you want to improve your sales, improving sales professional productivity is the first step.

Let’s look at the top CRM solutions and who they work best for.

1. Close CRM

Close CRM Outbound Sales CRM

Best For: Outbound

Close is the only CRM to offer lead management, email sequences, predictive dialers (no more dialing phone numbers!), and call coaching features, all in one package. It’s the highest rated among customers and is great for SMBs. Close is the only CRM with built-in sales automation, and will track every touchpoint with your leads.

Best Feature: Built-in one-click calling and call automation with both a Power Dialer and a Predictive Dialer. It will get your sales team on the phone more throughout the day, resulting in 60% more calls than your competitors.

Cost: $300-$1,550/year

2. HubSpot Marketing Hub

hubspot-marketing-hub

Best For: Inbound

With HubSpot Marketing Hub, your marketing team can grow traffic, convert leads, and track your entire funnel in one place. It’s an all-in-one inbound marketing software for your entire team. Learn more about how Hubspot compares to Close.

Best Feature: Build and modify your website with IT. Users can build landing pages, blogs, and emails through a simple drag-and-drop feature.

Cost: $9,600/year

3. Pipedrive

pipedrive-crm

Best For: Outbound

Grounded in the philosophy of activity-based selling, Pipedrive is a sales management tool designed to solopreneurs and low-volume sales teams manage their sales pipeline.

Best Feature: Pipedrive's visual sales pipeline. This feature will prompt you to take action, remain organized and stay in control of your pipeline.

Cost: $1,400-$4,000/year

4. Salesforce

salesforce-crm

Best For: Outbound

Salesforce is good for large companies with hundreds of sales reps that are just waiting to finally get the right CRM in front of them. If you’re not, then Salesforce is probably not the right choice for you. But you’ve probably been thinking about it (pretty much everyone evaluating CRM solutions out there does!), so we wanted to share our Salesforce vs Close comparison.

Best Feature: Integrates with everything, highly customizable, and if you have a capable, full-time dedicated Salesforce certified ops person.

Cost: $900-$3,600/year

Before You Decide Between Inbound and Outbound Sales

We’ve shared a framework for determining which sales method is right for you. But there’s an important disclaimer:

These are not laws set in stone. In fact, sometimes the right choice is to simply break the rules. Thousands of sales teams around the world use Close as their tool of choice and many of them go against the grain. They’re doing high-touch sales in a vertical where nobody else is doing it. Or they’re doing outbound sales in an industry where inbound is the standard. Or the other way around.

The general “rules” you find here probably apply 70% of the time—but 30% of the time, going the other way would be the right choice. There’s no set of fixed questions, survey, or scientific process that will accurately determine whether inbound or outbound sales is right for your company at this specific moment in time.

Want more advice on building your sales process? Get a free copy of our entire sales library, which includes our book in inbound and outbound sales, templates, checklists, scripts, and much more!

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