I was recently talking to a small business owner about how to drive more prospects to her site. "Are you doing any Inbound Marketing?" I asked.

(Sound of crickets accompanied by deer-in-headlights look.)

"What exactly is that?" she finally responded.

Those of us in the marketing world know by now the difference between Inbound and Outbound Marketing, but there are still many business leaders who do not.

Hubspot defines Inbound Marketing as a "set of marketing strategies and techniques focusing on pulling relevant prospects and customers toward a business and its products." Think blogs, white papers, case studies, SEO and social media. These are tools used to "pull" customers to your business.

Outbound Marketing - or Traditional Marketing - focuses on sending company messages and advertising at consumers. Think trade shows, direct mail and telemarketing. These techniques are designed to "push" the business at your customers.

In the battle for marketing budget dollars, Inbound Marketing is clearly "pulling" away. Businesses that know the difference are flocking in droves to the Inbound Marketing side.

There are three main reasons why according to Hubspot's 2012 State of Inbound Marketing report.

1. Inbound Marketing is more cost effective.

According to the report, which surveyed 972 professional marketers, the average cost of an Inbound Marketing lead was $135 - almost a third of the cost of an Outbound Marketing lead which was $346.

2. Inbound Marketing generates better leads

Leads from Inbound Marketing - blogs, whitepapers, SEO - are five times more likely to close than leads garnered through traditional marketing tools. Only about 2% of Outbound Marketing collected leads actually close.

3. Inbound Marketing lands customers

62% of the survey respondents reported they acquired a new customer through LinkedIn. 57% credited their blog. 52% said Facebook and 44% said Twitter.

In the last six months, more than a third of the respondents rated Inbound Marketing as "more important" while a third ranked Outbound Marketing as "less important." That is blatantly reflected in their spending as 89% of respondents say they increased their Inbound Marketing budget last year.

What are you doing with your marketing strategy? Are you "pushing" or "pulling?