Future trend: Inbound Marketing taking over traditional Outbound Marketing

Marketing is moving faster than ever before. The changes in buyer behaviour have dictated a number of adjustments to marketing strategy over the past year. There are a number of more specific trends that you should be considering as you start to look at 2013. Inbound marketing is one such trend that has garnered a lot of press, buzz and attention from marketing professionals across the globe. With more and more buyers using internet and social media for learning about the products and services that best meets their needs, it has become utmost important for businesses and marketers to adopt various inbound techniques for pulling relevant customers/prospects towards their business. Inbound Marketing channels use various tools such as e blogging, content publishing, search engine optimization and social media to help buyers make better purchase decisions. It also helps businesses in interacting and building better relationships with these potential customers. On the other hand, the traditional outbound marketing channels use tools such direct mail, telemarketing and trade shows, which are losing its effectiveness as more and more customers are using internet to know about their products and services.

A study was done by hubspot.com on various aspects of inbound marketing activities and Outbound marketing activities. Some interesting results were observed with respect the effort spend and the leads generated from both activities which would shape the future of marketing activities. Cost per lead generated in inbound activities was observed to be far less than cost per lead generation in outbound activities. In Inbound marketing channels, social media, Blogs and Search engine optimization were observed to be the most cost effective in terms of cost per lead generated. On the other hand outbound marketing channels

such as telemarketing, trade shows and direct mail were observed to be the most expensive of the lot for lead generation.

Marketing Budget: There is a shift in the distribution of marketing budget towards inbound marketing channels from outbound marketing channels. It was observed that in comparison to previous year most of the business have either maintained similar marketing budget for inbound marketing or have increased the budget. The major reason for this was attributed to past success using inbound marketing channels, and if at all there were few businesses that have decreased the budget for inbound, the major reason cited was economic condition or change on management. Therefore it is clear that most of the businesses have also understood the growing importance of inbound marketing channels over outbound marketing channels. Also, over the years it was observed that marketers and business are allocating more of their inbound marketing budget on social media and Blogs and less on Search engine Optimization. This trend can be attributed to the growing number of buyer on social media such as face book and Twitter and making their buying decision based on opinions formed on these media channels. On the other hand in case of outbound marketing budget distribution, the most affected is telemarketing in comparison to trade shows and direct mail.

In comparison to larger businesses (500 or more employees) it was also observed that small businesses (with less than 5 employees) are willing to spend a larger share of their lead generation budget on lower cost lead generation inbound techniques. This was primarily due to budget constraint of smaller businesses and low cost involved in marketing through social media and blogs as compared to trade shows. Social media such as Linkden, facebook, twitter and company blogs not only provided the businesses an opportunity for brand building and brand promotion but it also generated leads that resulted into real customer acquisition. The leads from inbound referrals were five times more likely to be converted into customers as compared to outbound referrals. This trend along with cost effectiveness of inbound techniques such as social media and blogs prompted the smaller businesses or start up to divert maximum amount of their lead generation budget towards inbound techniques. Moreover the inbound channels were observed to be equally effective for both B2B and B2C. The leads were equally generated and converted into potential customers despite the type of business. Industry wise on analyzing it was observed that technology, communications & media, retail & wholesale, education, and professional services & consulting, found blogging was highly effective; while retail industry recommended social media as a better medium. Businesses have started valuing the importance of inbound channels which are not just limited to social media or blogs. There are a host of other channels which are found to be extremely critical by businesses and marketers.

Thus, the advantages of inbound marketing channels over outbound marketing channels are clearly visible and businesses are increasingly finding it cost effective and advantageous. The same trend can also be

observed in Indian Business scenario where the buyers are increasingly using internet for making buying decisions. According to the latest statistics published by the Internet and Mobile Association of India (IAMAI), the number of Internet users in India stood at 112 million in September 2012, with 88 million of them coming from the urban cities and 24 million from the countrys numerous villages and small towns. This online user growth is primarily fuelled with improved network structure and growing need of online content consumption. 75% of the total user base is between the age group of 15-34 years. A remarkable point to be noted is around 40% of total user was contributed by female population in July2012. This is good news for major FMCG and retail firms who want to tap the Indian market with their women targeted products. With 75% of online audience between the age group of 15-34 years, India is one of the youngest online demographic globally and given the age distribution in India, this trend will continue to be in future too. As per The Nielsen Company and Absolute Data, of this over 60 million people are hooked to social media. Internet usage in the country is driven primarily by young people, with over 75% of the Internet users being school- or college-going kids and young men. A survey was conducted by them among 2000 people, and it was observed that just 8% spend between an hour and three hours on personal email, while 20% spend the same time on social media sites. Thus traditional marketing channels like direct mail may not be very affective in towards changing environment. There is increasing trend of customer logging online for product and service information. Internet provides them with a platform for easy access to their brands and also guides their product decisions and purchases. In such a scenario it becomes increasingly important for businesses to focus more on inbound channels for lead generation and customer conversation and less on traditional channels. In my opinion, inbound marketing channels like Social media, Blogs, etc is today not an option but a necessity for every industry. For bigger companies it is easier to use this platform, however, policies and getting approval can be issue for them. On the other hand start-ups have flexible policies that help them to adopt social media easily. For example for entrepreneurial start-ups, social media offers a competitive advantage because of its low cost and low barrier to entry. With social media and a little creativity, start-ups can easily reach out to their customers and build a successful brand. Also with mobile penetration increasing not only in urban India but also rural India, there is huge opportunity for marketers to tap mobile internet to reach out to the rural India, where otherwise its difficult to reach. Also with 3G and 4G services coming in, mobile internet will be much more effective in near future. Social media marketing and Blogs are no longer a new concept in India, and it has redefined the way businesses are implementing marketing campaigns. With the online medium providing mass reach and low cost benefits, social media marketing is a powerful tool not just for big companies but also for small entrepreneurial start-ups. Thus, businesses must creatively use inbound marketing channels over outbound channels and come up with innovative and cost effective campaigns to reach out to customers and build a successful brand. References: 1. http://articles.economictimes.indiatimes.com/2011-05-07/news/29520547_1_social-media-socialnetworks-personal-email 2. http://www.indexmundi.com/facts/india/internet-users 3. http://fleishmanhillard.com/2012/01/31/2012-digital-influence-index-shows-internet-as-leadinginfluence-in-consumer-purchasing-choices/ 4. http://blog.hubspot.com/Portals/249/docs/ebooks/the_2012_state_of_inbound_marketing.pdf

5. http://thenextweb.com/in/2011/11/08/internet-users-exceed-100-million-in-india-mobile-netusage-still-in-infancy/ 6. http://www.assocham.org/arb/general/Comscore_%20ASSOCHAM-report-state-of-ecommerce-inindia.pdf