Companies regularly make hard decisions about how to best allocate their limited resources. Those that depend on a strong, scalable sales engine often ask seasoned veterans, “Which is better: inbound or outbound sales?”
The answer isn’t quite black-or-white so to help business leaders make the right decision, here is a framework for evaluating both options.
Questions to Ask Yourself
- What types of customers do you want to serve: small businesses or enterprise accounts?
- How much cash do you have available? Can you afford to wait months before a deal closes? Or do you need to close sales and generate revenue immediately?
- How much control do you want over the sales process? Or would you prefer the product to sell itself?
- Do you want to hire more marketers & customer service representatives or salespeople & account managers?
The Argument for Inbound Sales
Inbound works when sales teams collaborate with marketing to generate leads through content (blog posts, whitepapers, etc.), social media and paid advertising. For many businesses, inbound sales is a scalable, low-cost and low-touch approach which aims to align revenue with the amount of web traffic a business receives.
Though every different lead generation channel offers ample opportunity to capture thousands of potential customers, inbound sales often runs into issues where lead quality and type vary greatly. Most inbound leads tend to be small- or medium-sized businesses (SMBs) from a diverse range of industries. This makes it difficult for companies to customize and effectively tailor the sales pitch to each unique buyer persona. Catering to a broad client base also impacts product development priorities; engineers become biased and build tools that work only for SMBs, which alienates potential enterprise customers.
The Case for Outbound Sales
While many profitable businesses attribute their growth entirely to inbound sales, other companies can ignore outbound sales at their own peril.
With outbound sales, you have the opportunity to capture bigger clients with larger budgets. But this requires bulking up your sales team and becoming heavily process-driven. For businesses, outbound sales is a predictable way of growing your bottom line. The downside is it is labor-intensive and, thus, more expensive. To justify the cost of an outbound sales team, their efforts must be focused on closing enterprise accounts. Of course, winning over corporate clients is no walk in the park.
Mark Cranney, a partner at venture capital firm Andreessen Horowitz, wrote in a blog post, “selling an enterprise-wide deal is a lot like getting a bill passed in Congress.” Cranney added, “Decision-making in large organizations is a long, tortuous process due to legacy technology deployments, internal politics, entrenched homegrown solutions, sunk cost of integrations, account control by incumbent vendors, and the sheer size and scale involved. In many ways, the purpose of enterprise sales is about helping customers get through their own internal buying processes.” Overcoming buyer reservations and bureaucracy requires patience and time. And although enterprise deals can take weeks or months to close, the average deal size will be well worth the wait.
By investing more in outbound sales, companies regain control over lead quality.You get to decide which customers to target, allowing you to concentrate your efforts -- branding, product and sales collateral -- on a specific type of buyer. Overtime, this helps to increase your close rate and your understanding of client needs.
Why an Integrated Approach Helps Businesses Win
The decision to choose between inbound and outbound sales becomes a lot easier when startups realize they can have it all. When we, at document automation startup PandaDoc, shifted our sales approach to marry inbound and outbound strategies, we improved both the quantity and the quality of leads in our sales pipeline. Within six months, our sales performance grew by 320%.
How are you using inbound and outbound sales to bring in better leads and close more deals?