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What is Outbound Marketing?

Outbound Marketing
Outbound marketing is a term used to refer to traditional forms of advertising, all of which involve taking steps to send a particular message to the target audience. Examples of outbound marketing techniques include:

  • Cold calling
  • Email bursts
  • Print advertisements
  • Tradeshows
  • TV commercials

As the Internet continues to grow in popularity and continues to present more creative methods for advertising, outbound marketing is losing its popularity as a form of advertising. Nonetheless, some companies spend as much as 90 percent of their marketing dollars toward outbound marketing.

Since outbound marketing involves paying to place advertisements in various forms of media, it is more costly than its counterpart known as inbound marketing. Not only does outbound marketing cost more to implement, but there are many difficulties involved with this strategy as well. For example, a recent CRM Daily report found that inbound marketing strategies offer a greater return on investment than outbound marketing strategies. This is due to a combination of high initial cost, difficulty with targeting a specific audience and an increased usage of blocking techniques, such as spam filters and do not call lists, which make it more difficult for these ads to reach consumers. Furthermore, tracking the actual return on investment is difficult when using outbound marketing strategies.

This is not to say that outbound marketing is obsolete. For certain types of products and services, outbound marketing can still be an effective strategy. Furthermore, for some businesses, using a combination of inbound and outbound marketing strategies may be the best option. For smaller businesses, however, the costs that are associated with outbound marketing are generally too great to justify the expense.

What experiences have you had with outbound marketing? Where you able to reach new customers and grow your business with the help of these techniques? What kind of strategies have worked for you in terms of pushing your business to the next level?

 

5 comments

March 8, 2011 at 10:45 pm Greg W.

I think that outbound marketing is really old school and every business should look into inbound marketing options.

April 25, 2011 at 1:04 pm John Tabita

It’s become quite vogue to characterize outbound marketing as “old school.” But as you pointed out, traditional marketing is far from being dead or ineffective.

It sounds good in theory to say the every business should utilize inbound marketing. But how would you advise someone who just opened his own carpet cleaning business? Build a website and hope people find it? Create a Facebook page or Twitter account and look for people to ‘like’ it or follow him? Blog about carpet cleaning? Honestly, how many homeowners would engage a carpet cleaning service on social media? Besides, it’s the cart before the horse.

The best strategy would be a combination of old school: Yellow Pages, direct mail and cold-calling. That’s what will get him customers right away. Once he’s built up a sufficient client base, then he can begin using social media to engage them, offer discounts and incentives, and generate marketing gravity.

I disagree when you say that for smaller businesses the cost for outbound marketing is too great to justify the expense. How much does cold-calling cost compared to paid search? (You’ll spend a lot less on the phone calls.) Certain keywords are becoming quite expensive and ROI is dropping because only large companies with huge marketing budgets can afford them.

Another thing that’s dropping is the cost of Yellow Page advertising (due to independent directories entering the market). In some markets you can buy display advertising for less than $1200 for the entire year.

As you stated, for some businesses, a combination of inbound and outbound marketing may be the best option. I owned my own web business, so you’d think I’d be singing along with the “outbound only” marketing tune. But my experience has shown me that those who preach that message usually have their own agenda – to sell their own inbound marketing services. And what better way to accomplish that than to disparage their “outbound” competition?

April 27, 2011 at 3:30 pm Tomasz Banas

Hi John,
Thank you for your reply. I think it’s OK to say that traditional marketing will serve us for another decade or so. At the same time, technology offers us so many new and great ways to market our businesses. New advertising channels open every couple of weeks.

I know that inbound marketing is not for everybody, as each business is unique, but in most cases it’s a great fit. Unfortunately, in traditional ways of marketing, 97% of all efforts go to waste, as it targets all consumers. Inbound, however allows you to reach out to a very targeted group of potential clients- consumers that have shown their interest in your products or services. For example: you don’t have to convince them to clean their carpet because they already know they need it. They just didn’t decide yet which company can do it better, and cheaper if the price is a decision maker, as it is in most cases.

Also, a mix of both marketing ways can be a good fit for a particular business. The outbound can sometimes be also powerful. Many business owners don’t track or don’t know how to track their ROI in direct mail or any other outbound. Improving a campaign without knowing the “numbers” from previous campaigns is next to impossible. Even if you make many changes, you still don’t know how those changes have or will impact the ROI.

Time is everything.
“Do not call” lists and telemarketing filters are successful because people don’t like to be bothered. Cold calling? When I pick up the phone and hear “Can I talk to a person responsible for your electric bill?” or something similar I get upset. Time is everything; so instead of wasting consumers’ time and upsetting them, spend your budget and resources on everything you can to be ‘there’ when Mr. or Mrs. Client look for carpet cleaning or other product/services you offer.

Would I recommend cold calling to carpet cleaning business? NO
Would cold calling generate more leads? Probably YES
Would cold calling generate more leads that convert? NO

To sum it up, outbound marketing is not perfect, nor is the inbound marketing- but it’s more effective, more targeted, and allows business owners to attain leads even 60% cheaper.

April 27, 2011 at 5:00 pm John Tabita

Tomasz,

I don’t disagree with most of what you said, except about cold-calling. They may convert less percentage-wise. But overall, it may very well produce a greater volume of sales.

If 100 people engage with Mr. Carpet Cleaner using SMM, and over a month’s time, and 75 percent of them convert, it’s still less customers than if he cold-called 1200 people in that same time period and “only” 20 percent of them convert. Do you see my point? With the average CTR at 2 percent, is Mr. Carpet Cleaner going to net over 200 new customers after a month-long AdWords campaign? I highly doubt it.

I run a department of B2B lead generators. In a good economy, our reps sell 20 to 25 percent of the appointments we book. Even though we’ve seen a slight dip in that since the economy tanked, it still represents an annual six-figure sales revenue. You’d be hard-pressed to convince me that any type of inbound marketing would produce the same results. And even if it did, we’d simply add it to our marketing mix, not replace it.

And BTW, “do not call” lists don’t apply to B2B calling, so we’re not restricted in that regard. And even when I called B2C in another job, there were enough consumers not on the DNC list to keep 10 of us busy all day long.

You may very well get upset when cold-called. But for every 3 people who get upset or simply say ‘no,’ one says ‘yes,’ because he has a need.

Is most cold-calling untargeted? Yes. But smart companies build a profile of their best customers and then specifically call (or mail) prospects who fit that profile, because they’re more likely to buy from them. Smart marketers have been using targeted outbound marketing for years.

As far as cost-per-lead being 60 percent cheaper? You’d have to show me some hard data on that. We get about a 700 percent return on our investment from our best lead generator.

Just because many business owners don’t track or don’t know how to track their ROI for outbound marketing doesn’t mean it’s impossible. (And shame on those who don’t.) I would argue that the ones who won’t or don’t track their outbound will also fail to track their inbound.

April 30, 2011 at 11:18 pm Tomasz Banas

John,
Sorry for my slow replies :)

I’m not so sure about “…for every 3 people who get upset or simply say ‘no,’ one says ‘yes,’…”. You have much more telemarketing experience so I assume you know better. We try to get leads for our clients but in the same time try not to make consumers life more difficult.

Do you like to be called and offered services? Services you have no interest in. As you know cold calling from both sides, how do you treat marketing calls that you get? to your office, home, cell phone, sometimes with ‘unknown’ called id name.

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