Inbound vs. Outbound Sales: What’s the Difference and When Do You Use Them?

Which strategy is the right one for your business — inbound vs. outbound sales? It’s usually a combination of both. If your brand is already well-known and in demand, you probably already have a steady stream of inbound sales. If you’re a new business with less familiar offerings, you’ll need to create a more aggressive outbound sales strategy. In both cases, however, you need to maximize leads — and that means finding the right balance of inbound and outbound sales efforts.

We’ll show you the benefits of both approaches, along with six key questions to ask yourself when deciding which sales approach to take.

What you’ll learn:

• What is inbound sales?
• What is outbound sales?
• Inbound sales vs. outbound sales: sales funnel differences
• Can inbound and outbound sales be combined?
• 4 questions to consider when choosing inbound vs. outbound sales

What is inbound sales?

Inbound sales happen when prospective customers approach you to learn about your products or services. These customers are already familiar with your brand; they come directly to you through an internet search, advertising, or word of mouth. In order to convert these prospects, you need to develop an engagement strategy to keep them moving down the pipeline.

3 examples of inbound sales

There are many ways leads can find you, but here are the some of the most common:

1. Referrals

This is when an existing customer recommends you to someone they know and encourages them to try your product.

Example: A customer has a fantastic experience with a doggy daycare service, Puptastic Care in San Diego. The customer recommends Puptastic Care to a friend. The friend visits Puptastic Care’s Instagram page and sends a message asking how much it costs for five weekdays of pet care. An inbound sales rep answers the question. If the prospect doesn’t immediately sign up for the service, the rep sends a coupon code with a discount of 10%, which entices the customer to sign up for a week of Puptastic Care’s doggy daycare.

2. Search engine advertising

In this type of inbound sale, a prospect searches for a keyword in an online search platform and finds an ad in the search results for a product they might be interested in.

Example: Another potential customer does an internet search for “doggy daycare” and the name of their city. An ad for Puptastic Care pops up, and the customer clicks on it, leading to Puptastic Care’s website.

3. Content marketing

This is similar to the search engine process above, except instead of a user clicking on an ad, they click on a piece of content, like a blog post.

Example: A prospect searches for “depression in dogs” and a post on Puptastic Care’s blog pops up. The blog post explains how exercise can relieve pet boredom and depression. They click through the Puptastic Care blog and discover that it has lots of helpful information about how to make dogs happy. Inspired, the pet owner signs their dog up for one of Puptastic Care’s renowned exercise classes.

What is outbound sales?

Outbound sales happen when a rep reaches out to prospective customers directly. These prospects are not expecting outreach and may or may not be aware of the brand. To help ensure the prospect engages, outbound sales reps do a lot of research to find pain points or needs they can address. They then craft a pitch and email or cold call the prospect.

3 examples of outbound sales

Like with inbound sales, there are several examples of outbound sales. Here are some of the most common ones:

1. Cold-calling

Many reps start the sales process by finding prospective customers who have needs that can be addressed by their product, then calling them to discuss the value of the product they offer. This is known as a cold call.

Example: A sales rep from Puptastic Care calls a nationally known retailer to share information about its dog harnesses made from upcycled leather jackets. The rep pitches a small run of Puptastic Care-branded dog harnesses in Southern California and secures a meeting to talk more about a potential deal.

2. Trade show marketing

A lot of sales still happens in person, especially at trade shows and conventions where reps can find the exact customers they’re looking for. Here, they start conversations with attendees to see if they’re interested in their products.

Example: Two sales reps from Puptastic Care attend one of the largest pet trade shows in Las Vegas. They want to franchise their doggy daycare business and expand their line of upcycled pet gear. They meet and collect contact information from dozens of prospects, who they they follow up with by phone.

3. Social selling

Many prospective customers look for solutions to their problems on social media platforms. This makes it a great place for sellers to find prospects; they can find leads to reach out to by searching by keywords or groups that align with their company’s mission and values.

Example: One of Puptastic Care’s sales reps searches for “pet retailer” on LinkedIn and uncovers a midsize nationwide pet retailer they haven’t talked to. The rep crafts a pitch for Puptastic Care’s upcycled pet gear and sends it to the head of operations. The prospect is hooked and asks to set up a meeting to talk more.

Inbound sales vs. outbound sales: Differences in the sales funnel

The key difference between inbound and outbound sales is who initiates the sale, the buyer or the seller. With inbound sales, customers approach businesses to purchase products or services. By contrast, for outbound sales, a salesperson contacts potential customers who may be unfamiliar with their products or services.

Here’s a comparison of the two sales strategies in practice:

Inbound sales

With inbound sales, customers are coming to you, either virtually or in real life. In some instances, such as online commerce, there’s often no salesperson involved. However, when customers come to you looking to talk to someone, your salespeople need to actively listen to them to close the sale.

If you’ve been in the sales space, you’re familiar with the sales funnel — the step-by-step journey to a close. With inbound sales, the funnel looks like this:

• Awareness and discovery: Prospects acknowledge a problem, start searching for a solution to that problem, become aware of your solution, and start asking questions about how your product or service can solve it.

• Interest: Prospects show interest and dive deeper into product or service research.

• Consideration: Prospects dig into the features, implementation details, and cost of what you’re offering to see if it meets their unique needs.

• Intent: The prospective buyer shows signs of wanting to purchase, like signing up for a free webinar or trial.

• Evaluation: They evaluate your solution via hands-on use or demos and compare it to others in the market.

• Purchase: A transaction takes place, marking the transition from prospect to customer.

While your inbound customers may already be familiar with your brand, they may not know about new product offerings or services. This is why training your sales team on your brand’s innovations and updates pays off. In other words, when your team can speak with knowledge and confidence — while expertly fielding objections from customers — you’re in a better position to close sales.

Companies that frequently use inbound sales include:

• Early-stage startups that spend their capital primarily on marketing and advertising (instead of more costly in-house sales reps)
• Companies with products that many people search for online. This covers a wide range of consumer products, like cleaning products, dog food, and children’s toys.
• Businesses that offer impulse purchases in places buyers frequent, like candy bars at the checkout line
• Services with an existing audience. As an illustration, that could include pool maintenance, elder care, and accounting

Outbound sales

Outbound sales requires a different kind of investment. Your sales team will likely need to spend time researching prospects, writing scripts for sales pitches, and traveling to trade shows or industry events, all to hook potential customers and educate them about the benefits of your offerings.

The stages of the sales funnel for outbound sales are identical to those for inbound sales. However, it works a little bit differently with awareness and discovery:

First, it may take a significant amount of time to find prospects that fit your product or service. Reps also have to tailor their sales pitches specifically for each one to ensure they address unique pain points and needs. In part because of this, outbound sales usually involves longer sales cycles.

Outbound sales is common for brands that have:

• New and innovative products and services that are newly on the market and require some explanation
• Niche products that target customers may not know they need

The disadvantage to inbound sales is that it takes a lot of initial effort to get the word out about your business. However, you’re able to make sure the prospective customers you’re targeting are likelier to buy because you’re doing the research to find them.

Can inbound and outbound sales be combined?

Yes, you can combine inbound and outbound sales. For example, many companies have content marketing efforts, like a company blog, that’s consistently updated with useful information relating to your products or services. That’s an inbound sales tactic that pulls in leads who engage with the post. This can be supplemented with rep efforts at outbound sales; they add leads to the pipeline by researching good-fit prospects on social media and contacting them to see if they’re interested in learning more about the company’s products.

4 questions to consider when choosing inbound vs. outbound sales

When trying to decide whether inbound, outbound, or some combination of both sales strategies are right for your business, here are some questions to ask yourself:

1. How hard is it to explain your products or services? To put it differently, if you have a straightforward, easy-to-understand offering, you can probably use inbound sales. A well-thought-out marketing campaign can convey your product’s value. But if it’s more complex, outbound sales may be a better choice. Outbound sales allows your team to thoroughly explain and show the benefits of your products or services to prospective customers via meetings, calls, and email interactions.

2. What are your margins? If your average sale value is low, you may not want to spend resources on outbound sales. If your products or services have a longer average lifetime value for customers, it might be worth the investment.

3. How large is your target audience? Outbound sales often works well with a smaller pool of potential buyers. With fewer prospects, your team can tailor and personalize pitches to potential customers. If you have a huge potential audience, try inbound sales. This is where a big marketing budget can have a big payoff.

4. Do you offer impulse buys or big-ticket items? For fun, impulsive purchases, social media marketing can make buyers say, “Take my money!” and lead to lots of inbound sales — no cold calling required. Outbound sales are usually associated with higher-cost B2B sales.

Inbound vs. outbound sales: two approaches to closing the deal

With inbound sales, potential buyers will seek out your business organically. Once they find you, it’s up to your sales team to turn them from prospects to customers. Outbound sales may require more initial legwork from your sales team, but with some patience and skill, their efforts will pay off. While the approaches may differ, both inbound and outbound sales play an important role in driving revenue for your business.