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January 14, 2020

Inbound vs. Outbound Marketing: Which Benefits E-Merchants More?

Although outbound marketing has been the dominant way to promote e-commerce businesses, inbound marketing has made great strides in recent years. So is inbound or outbound marketing better for e-commerce in 2020 and beyond?

Introduction

The e-commerce industry shows no signs of slowing down, with global e-commerce sales rising to $3.4 trillion in 2019. In the U.S., e-commerce accounts for roughly 11 percent of all retail sales, up from 6 percent in 2013. To capture a piece of the pie, e-commerce businesses need to stand out in a crowded marketplace with savvy marketing strategies. But is inbound or outbound marketing the smarter choice for e-commerce companies? This article will discuss everything you need to know: the definitions and use cases of outbound and inbound marketing for e-commerce, as well as a careful comparison of the pros and cons of both methods.

Outbound Marketing for E-Commerce

Outbound marketing is what most people think of when you mention the word “marketing”: TV commercials, billboards, newspaper and magazine advertisements, etc. For e-commerce businesses, the vast majority of outbound marketing takes place online, so that customers can visit your website and start shopping. Outbound marketing for e-commerce typically involves digital advertisements such as banner ads, search ads, video ads, and social media ads.

Inbound Marketing for E-Commerce

Inbound marketing is the use of marketing strategies to organically attract customers’ interest by creating relevant and appealing content. For e-commerce businesses, inbound marketing techniques include:

  • Blog posts and infographics
  • Search engine optimization (SEO)
  • E-books and white papers
  • YouTube channels and podcasts
  • Social media posts

The inbound marketing funnel is a model that tracks how your inbound marketing content will convert prospects into enthusiastic customers:

  • "Top of the funnel" (TOFU) content is intended for customers' first interactions with your business. As such, it tends to be more general, typically intended to solve a problem or provide a solution.
  • "Middle of the funnel" (MOFU) content is intended to help customers find the best solution for their needs. This content typically speaks more directly about the advantages of your products and services, often contrasting them with your competitors.
  • "Bottom of the funnel" (BOFU) content is intended to convert prospective customers who are at the last stage of the buying process. Common forms of BOFU content include case studies, free trials, webinars, and contact forms.

Another common inbound marketing model can be expressed in four steps: attract, convert, close, and delight. Businesses should create content for each stage of this process:

  • Attract customers by capturing your audience’s interest.
  • Convert prospects into leads by getting their contact information (e.g. an email address or phone number).
  • Close the deal by convincing them to make a purchase or subscribe to a service.
  • Delight customers by making them feel valued so that they'll keep returning to your business.

Inbound vs. Outbound Marketing for E-Commerce: 4 Factors to Consider

Both outbound and inbound marketing have value for e-commerce businesses, and the best e-commerce marketing strategies will likely include a mix of both. Besides, the right answer here will likely depend on the type of business that you are, and the type of products and services that you offer.

Speaking in a vacuum, however, there’s much to be said about the benefits of inbound marketing for e-commerce. Below, we’ll discuss 4 factors to consider when deciding between inbound and outbound marketing for e-commerce.

1. Outbound marketing is often unwanted

One of the biggest issues with outbound marketing is that it’s not targeted enough to reach the correct audience, or that it can alienate your potential customers. This makes intuitive sense: outbound marketing is inherently a disruption or interruption in the daily lives of the people you want to reach.

Consider the following statistics:

The problem is especially bad for online advertising. The problem of “ad blindness” occurs when users tune out the ads they see while browsing—or even worse, use an ad blocker to prevent them from appearing entirely. 40 percent of laptop users, and 22 percent of mobile users, use adblockers to hide “irrelevant” or “annoying” advertisements.

Given the ad blindness epidemic, it’s no surprise that the click-through rate (CTR) for online advertising is dismal: 1.91 percent for search ads and 0.35 percent for digital ads.

All this spells trouble for e-commerce businesses thinking of using outbound marketing. The psychology behind this is simple: rather than being subjected to an explicit pitch, most people prefer to arrive at a product decision on their own (or at least believe that they have).

That’s where the utility of inbound marketing comes in: customers find your services and offerings organically by doing their research, and then decide that it’s the right choice for them.

2. User reviews and word of mouth are most important

When deciding on which brands and businesses to patronize, customers value the opinions of people they trust most of all.

According to a Nielsen study, 92 percent of consumers trust recommendations from friends and family above all other forms of advertising. But it’s not just their social circles that can help make the pitch: 88 percent of consumers say that they trust online reviews just as much as they would a personal recommendation.

For e-commerce businesses, inbound marketing is an adjacent concern to user reviews and word of mouth. After reading comparisons and reviews, most consumers’ next step is to research the companies that interest them. That’s where inbound marketing swoops in—producing relevant content for the right consumer segments that will convert them into loyal paying customers.

3. Inbound marketing has a higher ROI

HubSpot’s “State of Inbound 2018” report contains the best proof of inbound marketing’s effectiveness: testimonials from inbound marketers themselves.

According to the HubSpot report, 71 percent of companies agree with the statement “We primarily conduct inbound marketing,” including 76 percent in North America. What’s more, 75 percent of inbound marketers agree that inbound marketing is effective, while just 62 percent of outbound marketers would say the same about outbound marketing.

What’s behind the preference for inbound marketing? It’s likely the higher returns that businesses see from it. 53 percent of marketers say that inbound marketing gives them a higher return on investment, while 16 percent believe that outbound marketing has a higher ROI.

The difference between outbound and inbound marketing can be summed up as a “push-pull” dynamic. Outbound marketing pushes your products and services on consumers, often at a time or place that’s inconvenient or annoying for them. Meanwhile, inbound marketing pulls people in by producing interesting and informative content that they want to consume.

It’s little wonder that inbound marketing results in better lead generation and increased traffic—and ultimately, higher revenues.

4. Inbound marketing matches the right customers with the right companies

With trust in outbound marketing at an all-time low, businesses often struggle to establish themselves as a voice of authority. This is particularly true for e-commerce businesses: customers have little to no physical interaction with your company and must trust that you will provide them with quality products and services.

Inbound marketing holds the advantage for e-commerce businesses because you can more easily establish yourself as an authority in the field. For example, an e-commerce website that sells health and wellness products could produce inbound marketing materials like blog posts and videos, answering common questions such as “What are the best diet and exercise regimes?”

Not only does inbound marketing help customers find the right businesses, but it also works in reverse: businesses can more easily target different audience segments, producing content for different groups of people. Our example health and wellness e-commerce site might create a series of yoga videos for its “suburban moms” customer segment, or a set of blog posts about vegan recipes for highly health-conscious customers.

Conclusion

Inbound and outbound marketing are both valuable marketing techniques for e-commerce businesses and are often used to complement each other. However, many companies find that inbound marketing is better suited for changes in customers’ expectations, as well as the increasingly competitive e-commerce landscape.

About Eniture Technology

Eniture Technology specializes in helping e-Commerce merchants grow by providing useful information, digital marketing services, off-the-shelf apps that solve common problems, and custom programming services. Please contact us if you need help growing your online business or implementing the concepts presented in this blog post.

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