The inbound sales (and marketing) model explained

Saturday, November 14, 2015


An inbound sales and marketing operation is quite different from an outbound operation. I’ll first concentrate on giving you the big picture of how the system works, but will also show how to mix inbound and outbound successfully later on this post.

Differences between inbound and a traditional sales funnel

The inbound operation is a funnel, similar to a traditional sales funnel, but it’s actually quite much wider and longer than your usual one.

Inbound makes things different on the Customer Acquisition side of the funnel (see the picture above). Before a customer even becomes a lead, you may nurture them for months. If you acquire customers via inbound channels, the relationship is also likely to progress differently compared to outbound. If you are using outbound tactics, your sales costs are likely to be high. Thus you have to aim for a big initial purchase to cover customer acquisition costs, at least to some extent.

The differences do not stop on customer acquisition. To maximize the value of the relationship, your key account manager is traditionally calling customers on preset intervals trying to call often enough not to miss any opportunities, but not too often so that the customer does not get angry. It’s difficult to get the timing right, and that's why account management tends to be expensive and not very effective.

In inbound you are trying to help a customer take small steps, something they are comfortable with. You are also likely to aim for a smaller initial sale. You have better chances of getting the customer that way, and as you have far lower acquisition costs, you can afford it.

You also have lower costs on the account management side. You know when a customer is getting active with your content indicating a need, so your account manager is not calling on schedule blind, they are calling because the customer has shown interest.

So, in inbound you have to work hard to nurture the customer when in outbound you try to get a big initial purchase to cover sales costs upfront. This changes your sales dynamics quite a lot, thus we have another flipped funnel completing an hourglass shape. It’s good to notice that this does not mean that inbound customers are likely to buy smaller things or less, but that you maximise sales by allowing customers to progress in smaller steps. This leads to more customers and ultimately higher sales per customer. You end up winning in two fronts.

Characteristics of an inbound sales model

Let’s take a quick tour into the inbound sales model presented in the picture above before digging deeper.

On the left side of the hourglass, you’ll find your Customer Acquisition funnel. Further left you’ll find where you are attracting new visitors to your funnel.

In the middle is the crucial step of Conversion where a lead becomes a customer. It’s psychologically a big step for both parties. This is where the customer gives you a chance by trying you out. For online startups, this could be when the customer signs up for a free edition to become a user, so it does not have to be a paying customer.

On the right, you’ll find your Customer Success operation. This is where you onboard a new customer and help them get value out of your product. You essentially grow your customer from a newbie to a loyal advocate. At the end you’ll see an arrow going back to the acquisition funnel. This is your Viral Loop when customers are referring you to new customers.

On the bottom, you’ll find some possible operations. Inbound is usually a content marketing driven operation, so you’ll need an operation that creates content, I call it Content Factory. If customers move from left to right, content moves from right to left: you create an ebook first, split it to blog posts and promote those blog posts to social media.

Depending on your business, you may need Inside Sales and Customer Success Team operations to convert leads to customers, and help customers to get results. If the term Customer Success is unfamiliar to you, it’s a proactive customer support with main focus on helping customers to get value out of your product(s), not just waiting for a customer to call when they have a problem. Inside Sales refers to sales people who do not travel to customers.

If you are selling complicated or big-ticket items, you may have a field sales operation hence Corporate and/or Enterprise Sales.

If you are in a pure no-touch online business, you may not need sales or even support at all.

And finally, if you are into Growth Hacking, that’s an operation that goes all the way. A growth hacking team tries to optimize the whole customer journey developing e.g. onboarding and customer experience.

If you're wondering what the height of the hourglass means, it is the number of customers at each step. On the left, your funnel is likely to be fat from the left where many enter the funnel, but relatively few convert to customers. On the right side, customers progress quickly through initial steps and pile up on the right as loyal customers, unless of course you have lost them earlier. On the right side, the height of the shape also represents the value of a customer.

Your game as an entrepreneur, marketer or salesman is to attract as many visitors as possible to your inbound system, keep them and move as many of them as possible one step at a time towards right, and finally you'll end up piling up a loyal customer base on the right.

Company Blogging Success Formula (Ebook)

Success of a company blog doesn't just happen, no matter how good content you create. It has to be made, and it has to be made by You. Luckily there is a formula for success which consists of 5 success factors. What are they? Download the ebook to find out The Company Blogging Success Formula!

Antti Pietilä

Written by Antti Pietilä

Antti is the founder and CEO at Loyalistic (Simple Content Marketing Software for B2B Companies) who loves to help SaaS-companies to grow at Software Entrepreneurs (@ohjelmisto_ry) and cycle. Say hello to him anytime @anttipietila.