Outside Sales Versus Inside Sales
When planning sales strategies, many companies are faced with decisions regarding whether they should focus on inside or outside sales.
Both options are incredibly valuable to business and therefore weighing up the pros and cons of which to allocate more time, energy and, perhaps more importantly, resources, is not always easy.
Here, you can find information on both types of sales, alongside research that will assist you in utilizing both methodologies to their greatest and most valuable advantage. In addition to this, a comparison has been provided so you can make an informed decision as to which (or what combination) will ultimately benefit your business the most, whether you're in the SaaS sales, or a different industry.
Inside Sales 🧐
Firstly, a definition. What exactly are inside and outside sales? Inside sales is the process of selling remotely. This means that sales representatives stay in an office and generate and follow up their sales prospects via means of virtual contact. These include telephone calls, video conferencing and email. It has the advantage of increasing the distance that the sales reps can cover as they do not actually have to physically travel to their customers or clients.
The customers usually land on a landing page, click on the website CTA, and book a meeting. Rapid increases in technology allow inside sales reps to demonstrate their products through video and web conferencing, so there is a decreased need for them to physically present their wares to customers, or prospective customers.
There are multiple ways that sales reps can virtually connect with their customers. These include:
- Social media
- Hosted CRM services
- Integrated telephone communications
The advantage of an inside sales rep has is that they can reach a huge audience of potential customers. Companies are also not paying for their time on the road, so the number of people the product of service can be pitched to in a single day is far bigger than that of outside sales representatives. Using tools such as sales intelligence software helps with narrowing down the potentially huge number of leads - it takes less time, allowing the generated data to be used further down the line.
Inside sales representatives need strong communication skills – it is vital that they can clearly and concisely articulate the benefits and value of their product or service without necessarily having the means for presenting it. Although that is sometimes an option, when recruiting members of an inside sales team, part of the interview and selection process should be in the form of a remote pitch so you can evaluate how well they express themselves in this manner. Similarly, as they cannot see the facial expressions of their prospect’s, reps will be unable to pick up cues from these and instead will have to identity verbal indicators.
Although there is crossover between inside and outside sales techniques and a strong skillset is required for both, it will ensure success for your business if you can recruit people who are specialists.
In order to maximize the effectiveness of inside sales reps, it is important to get the correct technology so they can use their time in the most efficient way. These will vary from company to company as to what exactly is required, however some of the basic elements are:
Mobile Devices 📲
Offering a company mobile devices will allow your customers to reach your sales reps when they are on the clock in the manner which suits them the most – whether that’s text, WhatsApp message, email or good old-fashioned phone call. Making your sales representatives convenient for your customers and clients is imperative for inside sales to work well.
Screen Sharing and Online Meeting Software 🙋🏻♂️🖥
Whilst the majority of communication can be conducted over the telephone, it’s still beneficial for customers to be able to see aspects of the products which could generally be shared in a presentation on their own computers.
Virtual meeting platforms such as GoToMeeting allows information and graphics like charts and images to be shared. They are now also introducing software which allows users to engage with a variety of different devices, such as tablets and smartphones, therefore increasing accessibility and engagement for users.
Any salesperson looking to excel in their career and working virtually should investigate CRM and its benefits. This piece of software effectively manages leads and accounts via a user-friendly dashboard. It can also assist with tracking and prioritizing jobs and workload, and line up tasks in a time-efficient way so users can manage their clients with ease. It massively increases productivity and has been shown to improve customer relations as well.
There has been a huge increase in the number of inside salespersons in the last few years, and how much sales business is conducted in this way – understandable as improvements in technology allow for a higher quality interaction between salesperson and customer – or potential customer. With all the economic advantages of inside sales, it may seem that this is definitely the answer for your company. However, there is a reason that outside sales have not been entirely usurped by inside sales.
Even K-12 schools have discovered the benefit of using CRM systems. Companies like Digistorm offer such unique school CRM services.
Outside Sales 🧮
Outside salespersons primarily broker face-to-face. When you imagine a traveling sales rep, taking products and services demonstrations from door to door, or business to business, this reflects outside sales. In the US, just over half (52.8%) of salespersons work in outside sales. Inside sales are also growing faster than outside sales; according to SalesLoft, inside sales are increasing fifteen times faster than outside, a growth of 7.5% compared to 5%. However, outside sales reps earn a significantly higher salary. They are, on average, bringing in 12-18% more than inside salespeople.
The face-to-face nature of outside sales means that a range of business tactics can be employed which are basically impossible when the sales rep is remote or virtual.
Image a scenario in which you are cold called to switch energy provider or hear about the latest smartphone. Whether rightly or wrongly, it is easier to dismiss, or even hang up on on the sales representative who is on the other end of a phone. However, in a store, when a salesperson approaches you to offer a taster or to discuss a new product or improvement on existing service, it is significantly more difficult to walk away or express disinterest.
It is exactly the same principle which means outside sales are still dominant in handling the majority of large business deals and pitches. There are different levels of outside sales – it might be pitching or having stalls at industry events, for example working at a trade show or conference, or the prospective customer’s office or restaurant. They will be able to keep a finger on the pulse of the industry by attending conferences and being in the heart of the sector when changes are taking place. The success of outside sales is dependent on the representative’s ability to build and maintain a strong client relationship.
Whilst it is easy to track and monitor the success of inside sales (using software such as CRM and as the inside sales representatives are based within the office, their activity is therefore, by definition, less autonomous and more easily supervised), there is a human interaction available with outside sales which is incomparable to telephone or other virtual communications. There are a few ways this occurs:
A study by the University of Chicago and Harvard found that it is non-verbal signifiers which demonstrate whether an interaction will result in antagonism or cooperation. The research shows that a handshake, the ubiquitous opener of most business meetings, affects outcomes for negotiations. The behavior of the experiment’s subjects demonstrates that higher joint outcomes were reached for interactions which began with a mutual handshake. A handshake is impossible to accomplish for inside sales; René Shimada Siegel, founder of High Tech Connect, propounds touch, saying that it builds trust in business relationships.
Hidden Messages 🤔
In a major book published in 1971, Albert Mehrabian advances an equation that broadly summarizes the importance of nonverbal communication: Total feeling = 7% verbal feeling + 38% vocal feeling + 55% facial feeling. This means that the facial expression dominates every other social indicator of feeling and is most relevant when it comes to decision-making.
Is it an all-too common occurrence that somebody’s tone over email or written communication can seem distant or standoffish when, in reality, they were simply writing the email in a rush or with other distractions around them in the office. This means that relationships and tone can get misinterpreted easily and matching a tone sent in an email is not necessarily the best way to have a successful negotiation.
With a face-to-face interaction, it is more difficult to misread tone as the person is directly there. Similarly, as people, we match facial expressions and interactions demonstrating a positive interaction. This cannot occur if the sales are happening virtually.
There are clear benefits to businesses of both inside and outside sales, therefore a more direct comparison will be instrumental in your decision as to where your energy and economics should be focussed within your company.
Success of Business 💯
Whilst it may seem apparent from research that demonstrates face-to-face requests are 34 times more likely to yield results than those sent by email, and a handshake promotes cooperation and trust within business, there are times when a sales deal falls through despite the best efforts and hard work of the representative. If provided with accurate and effective CRM software, inside sales reps will be able to immediately switch to a new account and refocus their energy on a more lucrative deal, whereas an outside sales rep will have to take time to travel to their next engagement.
Having said that, this is not always the case. Sometimes outside sales reps will be working at a trade show or conference, in which case they may be able to operate within a pool of potential clients or customers.
With this in mind, inside sales reps can be argued to be more efficient when clients are some geographical distance away. However, given the trust-based research highlighted in the previously cited articles, it may be a good idea to have an outside sales representative at the first meeting when trust and the nature of the relationship is established, and then follow this up with inside sales.
Individual and Team Working 👤 👥
An outside sales representative will almost certainly have an office that they return to but will mostly be an independent worker. This type of role will require an individual who is self-motivated and can work autonomously and take their own initiative. If they are asked a question within a negotiation, they will need to answer immediately whilst keeping both the customer – or prospective customer – and their manager – happy and satisfied. This requires a level of confidence and clever working. Inside sales means that there is a constant network of support available to the representatives. They can ask questions, ask customers to hold while they seek solutions and generally have the power of teamwork behind them in case they need it.
There will be crossover, and exceptional sales people with a range and variety of skills may be able to successfully work in both inside and outside sales. It is likely that individual employees will have a natural preference and gravitate towards one over the other though.
When making any business decision, it is imperative to weigh the pros and cons of the action you will ultimately take. The structure of your sales team will contribute greatly to the success of your company and how you operate will impact the revenue generated. Although field sales reps are still dominant, there has been a shift over recent years towards inside sales. With this in mind, and looking at significantly more flexible working arrangements for many businesses, it is worth considering designing your sales team to accommodate a mixture of both inside and outside sales.
It is being evidenced that an ideal split is 50/50 in a business’ sales team. In research conducted which generated the chart pictured above, a relational sales team is said to be best as this allows for outside sales to take place and generate business, with support that is then provided by a business development team.
As business grows, it will become apparent in what circumstances inside and outside sales are most appropriate. However, what is apparent, is that it is important to weigh both options fairly and not to dismiss outside sales in favor of new technology, or vice versa.