Why is Inside Sales Growing Rapidly?
When determining the optimal sales force structure to deploy, the overriding question is how to balance efficiency and effectiveness. Inside Sales is more efficient than outside sales, but is typically less effective. The key is finding applications where Inside Sales Reps can be nearly as effective as Outside Sales Reps at a significantly lower cost.
- Reach – the ability to reach more prospects or customers virtually than face to face
- Efficiency – Inside Sales Reps are typically paid somewhere between 40-60% less than direct sales resources. Expenses are also a source of savings as Inside Sales resources spend much less on travel and entertainment
- Buyer Feedback – buyers have less time to spend on procuring products and services. They want the ability to ask questions and obtain clarification without spending a lot of time or encountering “hard close” tactics
- Transactional Transformation – sales is becoming increasingly transactional in nature. Information is readily available and buyers are more educated. Organizations are trying to fight this transformation by focusing on “solution sales” and adding value by providing an exceptional buying experience. These may help but some interactions are still mainly transactional
- Technology – the use of technology has increased the efficiency and effectiveness of Inside Sales Reps. Organizations are better equipped to track leading indicators and Inside Sales Reps can utilize webinars to make customer meetings more intimate
Figure 1.0 below illustrates how Inside Sales can increase sales force efficiency.
We see clients deploy the following Inside Sales models:
- Support – organizations will sometimes use Inside Sales to remove the administrative burden from the outside sales force. This type of Inside Sales role is what sales support should be performing for the sales team. Inside Sales will help prepare presentations, do research, set appointments, etc. In this case, Inside Sales has been misnamed and is not an extension of the sales team, but instead an extension of single sales professional. Although this configuration may help an Outside Sales Rep be more effective, it is not a revenue generating channel.
- Lead Generation Focused– find leads and qualify them for the outside team (becoming outdated as marketing automation tools have become much more efficient)
- Segment Account Management – Inside Sales is focused on a segment of customers that are deemed to be less complex and contain lower potential. They may be organized by geography, product, industry vertical, or have an assigned book of business. Inside Sales can provide increased virtual touches and allow direct reps to focus on high potential prospects and customers.
- Internal Growth – Inside Sales partners with Account Managers to identify opportunities to upsell and cross-sell to the current customer base.
- Transactional – focus on selling to less complex prospects/customers that do not require as much need development or a great deal of education around how to buy the product. Although the sale may be transactional in comparison to some more complex interactions, it is not necessarily small ticket. With these less complex interactions Inside Sales can virtually participate in more sales calls in which success is not as tied to the Sales Reps ability to develop a need and educate the customer on why their solution superiors. This strategy is banking on the old cliché that sales is a “numbers game”.
You may incorporate portions of the five models listed above when designing an Inside Sales force as it is not a “one size fits all” exercise. Think about how your customers want to buy and where you are on the organizational life cycle. Is efficiency or effectiveness more important when designing your Inside Sales team? No matter how the role is constructed, Inside Sales is a growing force and will continue to be an important part of many organization’s Go to Market Strategy?