Which is better in B2B Lead Generation? A $1,000 inbound lead or a $1,000 outbound lead?

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I asked this question on Focus.com a few weeks ago and got answers that surprised me. Knowing the B2B lead generation market like I do, here is what I expected to see:

“The inbound lead is better because outbound is dead.”

“Inbound rules. Stop interruption marketing.”

I expected these types of responses because all you read these days are article after article and blog after blog saying that “70% of the buyer’s journey is done before a sales rep needs to get involved”.

Instead, what I got back can be summarized in a response by Casey Devlin who is Director, Account Management for Corporate Executive Board:

“This is a great question.

Our organization has done some extensive research over the last two years trying to understand how high performing sales reps qualify [opportunities] and nurture those [opportunities] through their pipelines to higher success. One fascinating trend we uncovered recently is that average performing reps tend to gravitate more toward inbound, marketing generated leads—because they view them as easier to close (due to the customer being more than halfway through their purchase process, already scoped out their needs, etc.). ‘This is great; this customer just told me what they want. I don’t have to scope their needs or build consensus on the purchase. I just have to get this order processed and I’ll be even closer to goal!’

“So while average performing reps are running full speed ahead toward inbound leads, HIGH performing reps on the other hand actually told us that they progressively disqualify (and even [de-prioritize]) inbound leads. Instead, high performers opt to hunt down “emerging” demand in the market place by getting out in front of a customer’s buying process and helping to shape that customer’s perception of their needs through targeted bursts of controlled insights. The idea being that when a customer decides they are ready to purchase a solution to their challenge, they are more likely to have a clearer, more realistic sense of their needs and how you can help (thanks to your targeted insights), and they are more likely to associate you as the incumbent in their vendor selection process.

“That’s not to say that inbound leads are less valuable than outbound leads. But what it suggests is that an inbound lead / customer has already established their needs, the solutions they want to buy, and how much they want to pay. It’s harder for a rep to reframe how that customer is thinking about a solution at that point in their purchase process, so reps opt to just fulfill ‘orders’ from those prospects and might end up leaving a lot of money on the table. Not much different from how a typical consumer goes about buying a new car—how would you feel if you spent three hours online building the exact replica of the car you wanted to buy (make, model, engine, add-ons, color, ETC.), then went to a car dealership and the sales [rep] tried to convince you that you actually need to buy a completely different car?”

The table below is live data from a real client (large software company owned by an even larger software company) though the names have been changed to protect the guilty:

Lead Cost Analysis Chart


In essence, what this table says is that for this software company (relatively expensive solution—a considered sale, if you will), the least expensive source for leads was PointClear’s outbound prospecting and nurturing as compared to inbound sources. This is not an anomaly. The more visibility companies have into real results the better proactive outbound into targeted accounts looks. Simply driving large numbers of respondents and dumping them on sales does not work.

I recommend that you create a dashboard for your company that includes all sources of leads and ALL costs. This would include everything from the cost of the media (in the case of inbound sources) and the cost to qualify the lead (assuming that your company is not making the mistake of sending raw, unfiltered, unqualified leads directly to the sales force).

What you learn will probably surprise you. As I say in my book, The Truth About Leads, when talking about cost-per-lead: “How much should a lead cost? Probably more than you think, but probably a lot less than you are actually paying.”

Republished with author's permission from original post.

Dan McDade
Dan McDade founded PointClear in 1997 with the mission to be the first and best company providing prospect development services to business-to-business companies with complex sales processes. He has been instrumental in developing the innovative strategies that drive revenue for PointClear clients nationwide.

3 COMMENTS

  1. Dan, Good job drilling down beyond the simple assumptions we hear and spelling out the real costs and values of outbound sales ready leads. Sometimes the business world just has to question the popular sound bites and look at the real numbers. After all, isn’t sales numbers?…

  2. Everyone should make decisions based on data, and not emotion. I am very glad more people are starting to look at the data behind inbound marketing!

    However, I don’t think the data you have here is “outbound” vs “inbound”. I think you have a list of different types of outbound marketing and all you can really say is that for this company cold calling works better than their other outbound marketing.

    How did people find the webcasts you list? Was it from Google PPC Ads? That’s outbound. Or a paid email drop to a 3rd party list? More outbound. The category “downloads from content syndicator” is outbound as well. You’re paying someone else to generate leads for you and those leads generally suck because (1) they are expensive and (2) they are people filling out a form on someone else’s website and have never even visited your website.

    To really look at inbound, you need to look at the people that found the company through inbound marketing. Which of the leads found the company’s blog through organic search? Which of the leads found the company through social media (organic, not ads)? Show me a chart of those leads, then let’s talk!

    I think all you have shown here is that a really good sales rep can outperform relatively crappy outbound marketing. Well, I would 100% agree with that! This company should actually embrace inbound marketing for real and try to be successful at it.

  3. Thanks for an interesting read.

    I’ve got to side with Mike on this one. People often confuse “inbound marketing” with “content marketing”.

    While the other programs on the comparison (webinars, whitepapers or other downloads, etc.) may be forms of content marketing, how did you attract the audience to said content?

    Was the bulk of it through paid 3rd party outbound advertising? Or did people find it organically via true inbound sources? I’d wager there was some of both but the majority was the former.

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