1) More effective, especially for brighter students
2) More engaging for students
3) More interesting for students
4) Easier to retain
This isn't to say that direct grammar instruction does not have its' advantages. It is definitely more time consuming to use an inductive instructional method. Direct instruction also tends to do a better job of dealing with exceptions to the rule, whereas an inductive method is going to help students focus on the big picture basics.
Remember, nothing says that you have to use one method all the time. Some concepts definitely lend themselves better to an inductive approach than others. I certainly encourage you to try both methods with your students and see for yourself which method is more effective for you.
Developing an Inductive Grammar Lesson involves essentially 5 step:
This could take the form of phrases, sentences, or a paragraph depending on the level of students you are teaching. The important part is to make sure that you provide plenty of examples of the targeted structure in use in various situations. Don't give examples that show exceptions to the rule at first, those will come later.
Step 2: Students create rules based on their observations
Have your students analyze the examples and try to come up with a rule as to how that particular verb or grammatical structure is used. Do not worry if their rules are not exactly "right". They will have a chance later to amend them. This step is all about the thinking process and focus on correct examples.
Step 3: Students test their rules against more examples
Provide students with additional examples of correct language that includes the targeted structure. They will need to see if their rules hold up against these additional examples. This is a good time to include some examples that go a bit deeper and challenge the most general form of the rule. Look at including examples that represent a less common situation that students may come across.
For example, if you are targeting verbs like gustar and have shown students examples in Step 1 that include the subject liking both singular and plural items, perhaps include some examples in Step 3 that show the subject liking to do an action and multiple actions.
Step 4: Students modify and add to rules as necessary
Ask your students to take a second look at the rules they originally wrote in Step 2. They should change or add to their rules based on the additional examples that you have shown them.
Step 5: Students apply their rules when producing language
Give students some targeted, scaffolded activities in which they can now apply the rules they have developed. This works best in writing, at least at first, until the rules have a chance to be internalized a bit more. This is the point at which, as the teacher, I would step in to correct any misunderstandings that students may have as evidenced by their work on the application exercises.
If you would like to see some examples of what Inductive Grammar Lessons look like, I am currently posting them in my store. You are welcome to look at them for ideas, or pick them up to save yourself some time.