I remember the datapoint that made me take notice of (at the time) this new thing called “inbound marketing.” Inbound Marketing generates 54% more lead volume at 61% lower cost than outbound marketing. When presented that data, who could argue that shifting your resources from outbound to inbound was the right thing to do?
While I am a (HUGE) proponent of inbound, there are two key fallacies lies with this data.
- The first and less damaging lie is based on how a lead is defined.(and it's contained in the very context of the claim that got my attention). An inbound lead is anyone who registers or fills out a form on a website, with no attention paid to the quality or propensity to buy associated with a lead. The definition of an outbound lead (though it varies depends on who you talk to) has a much higher threshold.
This type of apples to tables comparison is akin to someone making the claim that they can generate a higher volume of leads at a lower cost than someone else can generate sales qualified leads. It's a meaningless claim.
- The bigger and more damaging lie (that is still commonly perpetrated by technology and service providers) is caused by treating the lead-to-revenue cycle as a linear equation (generate more leads and you’ll generate more sales in equal proportion) rather than as the more complicated equation that it is.
The rationale further infers that if you generate more leads from inbound methodologies, you’ll lower your cost of customer acquisition even as your growth rate increases and you hit scale. Anyone who has successfully executed high-growth inbound marketing at scale has the financial statements that will illustrate just how big a lie this is.
Let me explain, using one of the most common tools that inbound marketing agencies and advisors use to demonstrate the ROI of working with them.