Should a business focus on inside or outside sales? It’s widely held that these two approaches are incompatible. But, in today’s market, the two positions are blending-and both have become key parts of marketing companies. What do you think about this? Are inside sales just sales as usual? Are you undecided about the best route to market your product? Let’s investigate the inside sales vs. outside sales equation and study how each fits into modern sales teams.
What Is the Difference Between Inside vs Outside Sales?
To begin, you’re not sure what kind of sales team structure to employ while putting up your sales force. There is no one response that is correct. It all depends on the nature of your business, your location, and your customers. Anecdotally, inside sales teams are expanding 15x faster than outside sales teams. In-house teams are becoming more and more popular. Software companies have grown significantly in recent years, and more businesses are now selling their products to customers throughout the world.
Another element assisting inside sales is the fact that inside sales spend, on average, 71 percent of their day selling. Outside sales reps only spend roughly 41 percent due to long travel times, and issues with planning face-to-face meetings. Zoom, Skype, GoToMeeting, and other video conferencing systems can be used to schedule product demos over video conversations. Outside sales teams can focus on lower volume and spend their time on enterprise clients with unique needs and long sales cycles. However, having outside sales representatives in 2019 has certain advantages.
Let’s take a closer look at the differences between inside vs outside sales and the advantages of each.
What is Inside Sales?
It is possible to conduct business with a client over the phone or via email using an approach known as inside sales. An inside sales representative’s primary methods of prospecting are phone calls and emails, but they also utilize other forms of electronic communication. It is possible for them to receive leads created through marketing as well. If your company sells something that can be offered remotely, such as software, then an inside sales staff will have a range of benefits.
What is Outside Sales?
Outside sales is when sales staff visit with customers in person. Outside sales reps don’t spend much time in the office. To see clients face-to-face, they must travel and thus spend the majority of their time away from the company office. Outside sales and field sales are terms that can be used interchangeably, so we will do so in this article.
It’s increasing at a slower rate than inside sales. Nevertheless, there are still reasons to hire an outside sales team. In this essay, we’ll explain what those are. We’ll now examine the advantages of each sort of sales team structure in order to assist you in making an informed decision.
Benefits of Inside Sales
There are certain important benefits to having an internal sales team. Here are a few of the most significant ones.
#1. Shorter lead response time
Emails and phone calls will be answered immediately by an inside sales team. Customers will not expect a face-to-face meeting, but they can communicate via phone, video, or email. Providing customer service and product support would necessitate sending representatives to a client’s location if you used outside sales teams.
#2. Lower sales costs
Your sales professionals can send emails or make calls at a faster rate than they could visit leads in person. Each contact with a new lead costs less than it would with an outside sales staff. Research done by Mike Moorman of ZS Associates indicated that inside sales lowered the cost of sales by 40-90 percent compared to field sales.
#3. Spend more time promoting your products and services
Inside sales personnel spend 35 percent of their week selling, compared to 22 percent for outside sales representatives.
Inside sales staff don’t need to spend time traveling, and that time can be devoted to prospecting, or following up with prospects more often.
#4. It is easier to expand the crew
It’s no secret that growing an outside sales team is tough. It’s quite location-specific if you want someone to swap territory or hire new salespeople. Salespeople may be reluctant to shift territory, and expansion is gradual. Your sales representatives may also require local knowledge if they are to be successful. Inside sales teams are significantly more scalable as they require less location-specific knowledge and rely less on customer connections.
#5. Increased teamwork
You may arrange your inside sales process to facilitate collaboration. If a customer has to be referred to an account rep, for example, a team member can make the introduction call and then pass the call to the account rep. An outside sales process generally relies on one individual overseeing the full sales process, and it’s a more independent function.
Benefits of Outside Sales
Investing in an excellent outside sales representative makes sense for your business if you want to spend time with customers face-to-face. An outside sales approach has a number of advantages, which we’ll examine here.
#1. Develop stronger client relationships
As you may well know, establishing a rapport with customers over the phone may be challenging. Outside sales help your team to create relationships with each customer and personalize the sales process to their particular needs.
#2. Higher close ratio
Prospects are 40 percent more likely to be converted by outside sales, according to Salesloft research. Face-to-face encounters can have a greater impact than email or video calls when selling to large clients. This does not mean that outside sales are superior in every circumstance. Complex sales processes involving multiple decision-makers can be handled more easily.
#3. Commission can be motivating
Outside sales teams are typically compensated on a commission basis. Outside sales is most typically employed when selling to enterprise clients, therefore the larger incentives make sense. This can be motivational for your team and it ensures that the genuine focus of the sales team is on closing agreements with quality prospects.
Inside Sales vs. Outside Sales Salary
According to Glassdoor, the typical starting salary for an inside sales representative in the United States in 2021 was $43,712. For an inside sales account executive (AE), the base wage is just around $80,000.
The Bridge Group reports that as of 2021, the average sales development professional (SDR) gets a median base pay of $50K. According to Xant.ai, SDRs’ average on-target profits increased by 3% from 2018 to $90,434.
Often, sales directors believe outside salespeople bring greater experience to a role, so they seek a bigger base compensation.
According to our 2017 statistics, organizations that had the bulk of outside salespeople had a basic wage that was 36 percent greater than inside sales. Surprisingly, outside sales only saw a 9.2 percent increase in OTE.
OTE should be an indicator of predicted earnings, so inside sales roles actually earn reasonably close to the same amount as outside sales.
Quota Attainment: Inside vs. Outside Sales
Quota attainment is a measure of how many sales have met their quotas for a given period of time. A sales team’s or a single sales professional’s total sales over a specific period of time can also be considered. It is possible for sales managers to evaluate the effectiveness of their teams by computing the percentage of quotas that their sales have met.
These are some of the most prevalent forms of sales quotas:
- Volume-Based: A sales representative’s or team’s volume can be quantified in this way.
- Profit-based: This measures the income produced by the company from product sales or services delivered.
- Cost-based: The amount of money that can be saved or spent less on each agreement that is made is what counts here.
- Activity-based: Measures a sales representative’s or team’s performance in terms of the activities or sales goals they achieve in a specific period of time.
So, who has the better sales quota attainment? A 2021 study by The Bridge Group shows that only 66 percent of sales professionals fulfill their annual quota attainment. According to Spotio, tend to outperform inside sales agents, sporting a 10 percent greater average quota than inside sales agents.
Inside vs. Outside Sales Models
So, to better understand the differences between an inside and an outside sales team, we’ve provided the following breakdown.
Inside Sales Model
- Sales rep engages with prospects, leads, and clients utilizing digital platforms.
- Focuses on acquiring new customers.
- A shorter sales cycle
- It’s less expensive, and it’s more flexible.
Outside Sales Model
- Sales rep visits to see client face-to-face.
- Focuses on lead nurturing and conversion.
- Greater length of the sales cycle
- Costs a lot more and is less scalable.
Finally, you’ll always be at the mercy of your consumer when it comes to deciding on a sales organizational structure. What is the preferred method of contacting your clients? Exactly how do they help you seal the deal? A $1 million deal can you close over the phone? That’s up to your customer.
I don’t believe there’s a specific vertical, industry, or product where a outside sales model is vital. Outside sales are a common practice in a variety of sectors. However, this does not imply that it is the best model for sales in the current market.
Today’s buyer is more tech-savvy than ever before. This strategy will naturally be expected to function in the B2B environment as well, as they’re increasingly acquiring things for personal use on Amazon and other websites
Your digital sales approach must be strong enough to match their demands, and this involves including inside sellers in your organization.
There really is no manual when it comes to inside and outside sales. Various models and organizational structures are being tested by companies in an effort to identify the best match for their products, customers, and markets. Decide what is best for you.
Using Inside Sales or Outside Sales for My Company?
Choosing which of these sales methods to implement for your firm is a crucial decision. A little more than half of all sales in the United States are now inside salespeople. They’re rising at a 15% quicker rate than their peers in outside sales.
To be sure, if your product is totally online and transnational, then inside sales are your best option. Use the inside sales approach and set your team’s goals based on the overall sales targets of your business. To promote accountability, every inside sales representative should have a measurable goal that is visible to their coworkers. Make sure that your main goals are founded on verifiable big data as well.
If you opt to focus entirely on outside sales, then you absolutely have to invest in a decent scheduling system your entire staff uses. Make a list of all of your coworkers’ regions, attend all of their meetings, and make a strategy to avoid any overlap or misunderstanding. If you’re selling directly to the film business, it makes more sense to hire a representative in Los Angeles, California, rather than flying someone in from Omaha, Nebraska.
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A mixed strategy is an option as well. A common aspect in most organizations that prioritize increasing sales is the use of social media. Since it covers more territory than a single technique, this strategy can be incredibly effective, but it relies on employing staff that is flexible and tech-savvy. If they want to succeed as an inside salesman, they must also have the initiative and interpersonal skills necessary to succeed as an outside salesperson.
Regardless of whether you’re inside or outside, you should always be able to adapt.
Whatever sales method you choose to utilize, inside or outside, you will encounter problems you will need to conquer. In order to be as effective as possible, you should always keep an eye out for ways to improve your methods and procedures. This can be accomplished by conducting a study and putting into action the suggestions of colleagues and competitors who have gone before you.
Comparing Internal vs External Models of Sales
The following is an example of a common inside sales model:
- Develop a pool of highly qualified prospects.
- Set up a dialogue with potential customers via the internet.
- Try to finish a deal within 90 days.
- Remote selling makes it easier to save money and grow your business.
In contrast, the sales model for the field is as follows:
- Make an effort to meet face-to-face with potential customers.
- Show your products and services to potential buyers in person.
- Close transactions within the 90-day window
- Costs are higher, and scaling takes longer and more work than with inside sales teams.
Internal vs External Sales Strategies
Sales teams have had to rethink their approaches in light of recent transformations in business models, such as the movement from on-premise corporate software to SaaS cloud services. Consider the following options:
Product-Led Sales Strategy
Some goods, such as general-purpose SaaS, can rely on product marketing alone to generate growth in sales through a self-serve customer acquisition approach, reducing the requirement for sales personnel.
A wonderful idea, but you need to recognize when your product needs a salesperson to show the product, an onboarding specialist to get a new client up and running, or a customer retention specialist to improve the lifetime value of current customers (LTV).
Outbound Sales Strategy
If you have exhausted your product-led development opportunities or serve a market that requires a more active outbound sales process, you’ll want to investigate creating an internal and/or outside sales force.
One significant aspect when designing a sales team is evaluating your ACV or client lifetime value (LTV) versus your customer acquisition cost (CAC). If the ratio is less than 1, your sales model is unsustainable and likely to collapse.
Inside vs Outside Sales FAQs
Which is best field sales or inside sales?
Inside sales representatives make 45 percent more calls, send 8.8 percent more emails, and make 49 percent more social contacts than outside sales representatives. So they are significantly more likely to have defined and measurable daily workloads, with metrics to hit for calls made, meetings booked, and proposals sent.
How is inside sales different from sales?
Inside sales representatives work in an office setting, whereas outside sales representatives visit client firms in person.
Is Inside sales a good career
Inside sale is an excellent profession for college graduates with strong networking and communication abilities. Companies seek sales representatives who comprehend the product and can market it to buyers depending on their needs. In this industry, the entry-level position is sales development representative.
