I have often been asked by many startup founders – What is the best way to acquire customers and when is the right time to do so ?
The latter is the simpler question to answer. You need to start collecting feedback on your idea / product from day 1 and start acquiring customers as soon as you have the MVP ready. Many successful companies ink a few deals by selling the concept, even without a MVP in place. It is crucial to go out there and get a feel for what the market needs, before you spend your time and resources on building something there is may/ may not be demand for.
That leaves us with with the more important question on the best way to acquire customers. Well there are couple of strategies companies adopt to get customers through their door.
- Inbound sales, where a prospect was led to your portal through a search / blog post/ publication or any relevant piece of content that they came across.
- Outbound sales, where your sales team identifies cold or warm leads to go after, and works on campaigns that can help you convert the lead into an opportunity.
Many founders I have met do not have a proper inbound or outbound strategy. Few mention that outbound is not the optimal solution for their product. Some others feel that a strong inbound strategy is very hard to build. Many bootstrapped businesses state they don’t have the resources to launch an outbound campaign or the time to optimize for inbound.
Before you decide what strategy is best for your business, let us look at how they stack up on the below parameters:
- Ease of execution
Getting an inbound strategy working for you takes time. First you need to work on your SEO and make sure your site is optimized for easy discovery. Then set up inbound marketing automation – Identify channels, generate content, create landing pages, execute series of marketing campaigns, track behavior, qualify and score leads.
Outbound sales on the other hand is quick to setup and execute. All you need to do is to identify what segments you want to go after, work on your messaging and execute campaigns.
- Scale up quickly
If you have a strong value proposition and great sales reps, outbound sales can get you quick results and the first few customers in your door.
Inbound sales takes time to set up and execute right. But once you get the machinery running, it can bring in many more leads and help you scale faster.
- Non linear growth
Outbound lead generation is a function of the number of sales development reps and account executives you have. You can optimize conversion rates and demo rates, but at the end of the day it still a function of the number of executives. Although certain business development efforts do help in driving non linear growth.
Inbound lead generation prepares the company for non linear growth. Once you’ve a good inbound strategy working for you, sit back and watch the leads coming in to your portal.Longer impact As soon as your stop your outbound efforts, you stop generating new lead flow. Inbound stands the test of time. Once you’ve good content out there you will continue to attract visitors to your website.
- Lead volume and quality
Inbound if executed right, can give you access to a lot more leads than your outbound can. However a lot of these leads may not fit your ideal customer profile. You may have many people visiting your site who have no intent to buy or no influence whatsoever on their buying process.
On the other hand with outbound campaigns you pick and choose whom you want to reach out to (often decision makers/ influencers at large companies with bigger budgets). Qualification is done prior to reaching out, so you can be rest assured that the prospects you are meeting with are not wasting your time.
Inbound leads reach out to you when they are ready. In an outbound strategy, you reach out when you are ready.
This means you can work on your sales pitch and other content for a particular segment and then focus on selling to that segment, thus improving your conversion chances.
To optimize conversions on inbound leads, you need expertise in selling to multiple segments. Often this expertise takes time to build.
When you have limited resources, focusing on segments where you have higher chances of conversion is a better idea than casting a wide net.
- Customer acquisition channels
Outbound today is not just cold calling or emailing or social selling. Often it involves a mix of various strategies and customer acquisition channels. You basically reach out to leads on the channels they spend most of their time on.
Inbound is not very different. A number of channels are used to reach your target audience – Social, website, blog posts, webinars, podcasts etc.
- Other aspects
- Inherent need vs creating awareness – Inbound leads are more informed of your product and quite a few may have an immediate need for it. With outbound you often catch your leads early in the cycle, and need to raise their awareness on the product and identify a need around it.
- Evaluating many vs one – Inbound leads may be evaluating many other companies for their requirement. So you are up against your competitors. Outbound prospects may be unaware of the other players out there.
- Shorter sales cycles – Inbound sales cycles tend to be shorter, as your qualified leads are lower in the funnel. With outbound you end up with longer sales cycles. In most cases this is worth the wait, as you sign up larger customers with bigger budgets.
- RoI – Executing an inbound strategy is lower cost, but takes a while before you start seeing returns. Outbound on the other hand can deliver results quickly. There are many solutions today to optimize on outbound costs.
So what is the best option for your business ?
Inbound vs outbound is not an option. These are two pronged approaches that you need to run in parallel to optimize for growth.
SEO and inbound marketing automation is a good investment for longer term return.
Outbound reach outs (both warm and cold) will help you get off the ground and scale quickly. They also help drive more inbound traffic to your website.
Companies that have both inbound and outbound strategies working for them land more opportunities and convert more deals. Whether you are launching a new product, scaling the business beyond the early adopters, or preparing the company for hyper growth, it is important to think through both your inbound and outbound strategies.