Inside sales is the dominant sales model for reps in B2B, tech, SaaS, and a variety of B2C industries selling high-ticket items. Put simply, inside sales is sales that is handled remotely. It routinely involves high-touch transactions over phone and email. Contrary to telemarketers, inside sales professionals are highly skilled and knowledgable. Thanks to advances in communications technology, inside sales reps can give presentations, conduct demos and perform most of the functions traditionally handled by reps in the field.
Over the past decade there has been a massive migration to the inside sales model. How massive? In an HBR article, sales coach and author Steve W. Martin cites a survey in which twice as many participants reported moving to an inside model. This article explores the history and evolution of inside sales, reveals the reasons that inside sales has become the dominant B2B sales model and offer some predictions for how sales will continue to evolve.
The History of Inside Sales
Inside Sales Vs. Telemarketing
Of course, selling over the telephone from remote locations is nothing new. As far back as the 1950s, companies have used telemarketing, those over-the-phone selling techniques that have, for decades, interrupted family dinners. But telemarketing is vastly different from inside sales. Telemarketing is almost always scripted, it focuses on selling relatively low-ticket items (such as extended warranties and insurance policies) and almost never involves multiple touches. In other words, each call is do-or-die. A deal is quickly closed or lost, and then the agent moves on to the next lead.
Inside sales, on the other hand, focuses on high ticket items and is most prevalent in the B2B landscape. While inside sales reps might use campaign-specific talking points, they don’t rely on full-on sales scripts. In fact, inside sales reps are often highly trained, adept salespeople possessing acumen and ingenuity comparable to outside sales reps—a far cry from the average telemarketer. Inside sales reps also tend to earn a much higher salary than telemarketers, often based heavily on their sales commissions.
The Evolution of Inside Sales
There are two primary ways that inside sales has evolved. First, it has grown more prevalent. An MIT Lead Management Study reports that inside sales hiring is outpacing traditional (or outside) sales hiring 15:1. In fact, many designated field reps are still spending time in the office closing deals, returning phone calls and sending emails. And for that matter, since the corporate landscape is moving away from traditional hours, many inside sales reps are closing deals from their mobile devices or homes after hours. Another way that inside sales has evolved has to do with advances in technology that enable inside sales reps to connect with more leads and have smarter conversations based on real-time contextual prospect data.
Which Companies Are Most Likely to Invest in Inside Sales?
In Steve W. Martin’s recent HBR article, he outlined three factors that influence whether businesses invest in inside or outside sales:
A Sales Organization’s Development Stage – Martin posits that early stage businesses would be more likely to scale up their sales presence in order to compete against larger competitors. This often necessitates a large remote sales team.
Sales Cycle Complexity – Depending on the complexity of the solution a business is selling and the size of deals, it can influence whether inside sales techniques or field sales techniques will play a dominant role. Complex enterprise solutions that require large up-front capital investments, buy-in from multiple executives and any amount of customization often demand the involvement of field sales reps. Businesses that sell turn-key cloud-based solutions can often handle sales exclusively through remote channels. It’s important to note, however, that even large enterprise deals that are signed in person often begin with prospecting efforts from inside sales.
Managers’ Perception of Sales Model Effectiveness – Martin brought up the valid point that the sales models that companies adopt are often influenced by decision makers’ perception of which sales models are most effective. Martin’s surveyed sales leaders and found that businesses tend to rely on inside sales teams for creative opportunities and outside sales reps for maintaining partnerships, strengthening relationships and closing high ticket deals.
Inside Sales Vs. Outside Sales
- Is more cost-effective
- Is prefered by customers
- Enables better collaboration
- Offers reps tools that increase productivity
Let’s examine each of these of these advantages in greater detail.
A More Cost-Effective Sales Model
According to data from PointClear, the average outside sales call costs more than six times more than the average inside sales call. Even without using dialing technology, inside sales reps can dial more leads, connect with more decision makers and take far more meetings in a single day than outside sales reps. As a result, inside sales reps are carrying increasingly larger quotas. The average inside sales rep’s quota is $923K, while many inside sales reps routinely produce seven figures in revenue yearly.
Customers Prefer the Inside Sales Model
According to Sales Benchmark Index, 70% of your customers don’t even want an in-person meeting. Key decision makers are quite receptive to doing business remotely. In fact, according to DiscoverOrg, 78% of decision makers polled have taken an appointment or attended an event that came from an email or cold call.
Supporting Superior Sales Collaboration
B2B deals can be complex (the average B2B deal includes an average of 5.4 decision makers). Closing those deals often requires inside sales reps to work in teams, coordinate with managers, marketers and other branches of a business to move leads through the sales cycle. CRM and sales acceleration technology enable inside sales reps to automatically log pertinent details about accounts. That data can then be leveraged in real-time, supporting superior collaboration.
Enhance Productivity with Sales Acceleration Tools
Every year, new sales acceleration tools go to market. By forming a powerful sales technology stack, inside sales teams can gain the ability to send more emails, dial more leads and have more conversations. A recent study from The Bridge Group found a distinct correlation between the number of conversations that reps have a day and quota attainment. Tools that can help reps dial and connect with more leads can therefore give inside sales reps a powerful advantage over outside sales reps and inside sales reps who aren’t adequately leveraging sales acceleration technology.
The Future of Inside Sales
So how will sales continue to evolve? It seems clear that the future of sales will be invariably linked to buying and selling technology. As an example, Google reports that mobile searches have overtaken searches from browsers in the U.S. and several other countries. Thanks to click-to-call technology, companies should expect a growing number of inbound sales calls. This will require companies to invest more on inbound sales teams.
Selling technology will also become increasingly important. We predict that the most successful companies will be those that can not only capture the most data about prospects, but also crunch that data and deliver it to inside sales reps in the right context. As sales acceleration technology continues to grow more powerful, reps will be able to get better at knowing who to sell to, what to sell them and when to sell it. So if you haven’t already begun outfitting your reps with a powerful sales technology stack, it’s well past time to begin.
Want help choosing the perfect tools to help your inside sales team drive more revenue? Download our free Sales Acceleration Buyer’s Guide for expert tips on building a sales technology stack that supports your sales team’s goals.