One of the things every business must accomplish before venturing out is establishing very clear systems and processes for the sales team. And one of the questions management is often faced with is what sales model or method to adopt: inside sales or outside sales?
It’s a question worth mulling over. Outside sales has the advantage of having been around for decades. It’s been proven effective by many sales personnel. But then technology today has given inside sales a boost, and it also has its own set of advantages.
One thing's for sure: What method you decide on will influence your hiring process, sales training, sales cycles, and your customer acquisition costs.
Inside Sales vs Outside Sales
Inside sales is professional sales done remotely or virtually, usually inside an office. There’s no in-person interaction between sales rep and customer; instead technology is optimized. Common tools used include mobile phone / smartphone, Voice Over Internet Protocol (VOIP), email, CRM, power dialer, and the like.
It’s a common sales method for B2B industries, particularly SaaS. Ken Krogue has likewise noted that inside sales:
- Is NOT telemarketing. Telemarketing is a scripted, single-call-close, almost always targeting a small-ticket, business to consumer (B2C) model.
- Is not scripted. It requires multiple calls or "touches" to create a sales close, involves medium or large ticket goods and services, and targets business-to-business (B2B) or high-end business-to-consumer (B2C) transactions.
- Uses power dialing technology that moves the more sophisticated "predictive 2.0" technology into the data using predictive analytics, big data, and machine learning to improve on the older technology by removing the stigma of abandoned calls of the overused technology.
Outside sales, on the other hand, takes sales reps outside, on the field. It involves a lot of appointment settings, in-person meetings, and traveling.
It’s safe to say that in today’s market and tech environments, outside sales is not strictly outside sales. It can still involve a lot of inside sales strategies, too, like phone calls, video calls, emails, and the like. But when necessary, sales reps venture out to meet with clients face to face.
Which Method is Best for You and Your Team?
So how do you decide if your team should adopt inside sales or outside sales? Consider these factors:
1. Your Product
As a general rule, products that are simpler, less expensive, require very little investment (in terms of money, time, and resources), and are mass-marketed do well with inside sales. That’s because the sale process for these kinds of products is fast and a lot more straightforward, and would need the speed and efficiency of inside sales.
Products that are more expensive, more complex, customizable, and require bigger investment (in terms of money, time, and resources), would greatly benefit from the in-person interactions of outside sales. Besides, any buyer paying a substantial amount on a product or service would most likely request for a demo or presentation.
2. Your Sales Cycle
Although both inside sales and outside sales follow the same cycle (research, prospecting, discovery, pitch, negotiation, closing, retention), inside sales has a faster process.
The more complex your product, the longer and more complex your sales cycle will most likely be. How complex or simple your sales cycle will be would also depend on purchasing decisions to be made for the product. Will one person decide and/or be impacted by the decision? Or will more than one person, even a whole department, be using the product?
If you foresee a more complex, time- and labor-intensive sales cycle, your reps will have to perform outside sales functions.
Does your cycle also need a lot of digital transactions and automated features? Do you go for high volume, reaching as many prospects as possible? Then inside sales is for you.
3. Your Organization
Has your organization heavily invested in technology and do you operate almost exclusively digitally? Then it would make sense to prioritize inside sales.
You can also look at the size of your team: a slim team requires more productive work hours from its members. And because inside sales eliminates the hours consumed by traveling and commuting, your team will have more time selling with this method.
Budget is also a factor. Considering travel, representation, and other related costs, outside sales will incur a higher customer acquisition cost (CAC). Can you afford these additional expenses? This is perhaps the reason many start-ups begin with inside sales and then scale up when the team gets bigger and the customer size is growing. They are, at that point, more comfortable increasing their CAC.
4. Your Customer
If you’re catering to the mass and/or mid-market, then you’re focused on a high sales velocity and volume. Inside sales offers you the speed you need.
If you’re marketing to a more high-end clientele and prioritizing relationship marketing, you will need to have trained outside sales reps catering to this more discerning market and cultivating great customer relationships.
These are general guidelines for you to consider. In the end, the sales method you choose may even be a hybrid of inside sales and outside sales. And that doesn’t sound too far-fetched. In fact, a lot of organizations adopt both sales methods. Besides, purchasing behavior today has also drastically changed. Sometimes, even high-ticket items are purchased online or remotely, without any face-to-face selling involved.
You can use inside sales to shorten your sales cycles and move products faster. You can then use outside sales strategies for premium accounts and current clients, and for increasing your customer retention rate. In-person sales calls for your current clients help solidify your relationships with them.
Sales today is so dynamic. Who’s to say that there is only one way to perform all your sales tasks and accomplish your sales goals?
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