The Rise of Inside Sales

In the United States, inside sales have grown 15 times faster compared to outside sales. Inside sales reps are more in demand than ever. Roughly ten get hired into a company for each outside sales representative hired. That’s over 750,000 jobs created every year for inside sales. However, what’s the difference between inside and outside sales? Why the sudden rise in inside sales? Also, is this growth expected to continue?

The Differences Between Inside Sales and Outside Sales

Both inside and outside sales reps are attempting to generate revenue for the company. However, an inside sales rep does so from an office, whereas an outside sales rep works outside the office to close deals with customers the old fashioned way — usually face-to-face.

While it’s nice to do business face-to-face, the rising costs associated with covering a territory mixed with diminishing profit margins across several industries and a lack of visibility into outside sales activities has allowed for a digital sales disruption to occur within the sales profession. There are many top-line advantages to inside sales or digital selling models over traditional outside sales models such as:

• A less cost-prohibitive form of selling
• The preferred form of communication by customers
• Allow better collaboration between departments
• Provide reps with tools they don’t typically have in an outside sales environment
• Increase visibility and business intelligence
• Allow scalability without necessarily increasing headcount

Let’s explore a few of these advantages with a bit more detail.

Inside sales models are less cost-prohibitive

In all respects, sales, in general, is a numbers game. According to PointClear, an outside sales call costs more than $300, while an inside sales call costs around $50. Even without sales engagement technology, an inside sales rep can reach out to more leads, actually, make more contact with decision-makers, and attend several more meetings in one day than the typical coverage model of an outside sales rep. Equating to an increase in productivity across sales teams, better account/lead coverage, and improved revenue efficiency. As a result, we are seeing a shift toward digital selling, a change in B2B buying behaviors that support a digital selling model, and rapidly increasing quotas for inside sales reps.

“Inside sales must be the answer,” Carter thought. “But how should we structure this team? How many field representatives should we have and how many inside sales representatives? How do we onboard an entirely new organization? How do we structure compensation given the new dynamic? How do we convey sales goals to the new organization and track sales metrics?”- New Science: Pioneering the Inside Sales Revolution, Harvard Business Review Case Study by E. Follett Carter

So, less cost and increased efficiency is a no-brainer, but what about an inside sales rep’s results? Out of the 5.7 million professional salespeople in the U.S., approximately 47.2% are inside sales professionals. Outside sales represent 52.8%. The average inside sales rep’s base salary is around $61,000, with an annual quota of $1.2 million. Overall, companies with sales teams dominated by inside sales reps have a 9.8% higher quota attainment than companies dominated by outside sales reps.

Inside sales models are the preferred way of doing business for many customers

According to the Sales Benchmark Index, less than 30% of your customers want to see you — ouch. However, it’s true — nearly 80% of the decision-makers you come in contact with not only don’t want to see you or don’t have time to see you but actually, prefer remotely conducting business. According to other research, nearly 80% of those polled have decided to set up face-to-face meetings or to go to an event if the first contact was an email or phone call.

Today, B2B buyers travel a new path to procurement with several different touchpoints along the way. The more places you can be along their journey, to show the differentiated value of your offering, the more you will have a chance to win that customer. To do this, you must learn how to digitally engage with potential customers because traditional direct sales efforts are not as effective. To this point, sales organizations primarily made up of inside sales reps made 42.5% more dials, left 10.2% more voicemails, and sent 8.8% more emails than organizations with mostly outside sales reps. They also focused more on social media, with 49% more social touches than outside sales reps. This focus on engagement across digital channels allows for sales to better engage buyers in the channels that are currently capturing their attention.

Inside sales allow for better collaboration between departments

According to Gartner Research, “Today’s B2B buying involves more stakeholders than ever before. The median B2B buying group involves six to 10 decision makers‚ each armed with four or five pieces of information they have gathered for themselves.” Now, your inside sales reps have to work as a team to close such deals. Coordinating with sales managers, the marketing department, and a business’ other branches are the only way leads get moved efficiently through the funnel.

Gartner research indicates, “that customers don’t buy in a linear fashion. Rather, they use both digital and in-person channels with nearly equal frequency to complete each of the six B2B buying jobs more or less simultaneously.”

“Today’s world of B2B buying, there is no handoff from marketing to sales (or digital to in-person). It’s a parallel process, not a serial one.” — Gartner Research

Digital selling tools, more easily adopted by inside sales, such as Customer Relationship Management (CRM) software and Sales Engagement Technology give reps the ability to streamline or automate workflows, increase critical data capture to share across teams, and develop a better understanding of where each decision-maker within the buyer group sits within their journey. This data can be leveraged in real-time, allowing sales and marketing to work together with other departments to better engage decision-makers throughout the buying process.

The importance of alignment cannot be understated; sales and marketing teams should be well-informed as to the customers we are trying to reach. It’s no longer acceptable to have sales and marketing running different playbooks or only seeing half of the story as it relates to the buyer’s engagement. As B2B sales evolve, alignment must expand to include the ways sales, marketing, and customer success engage and convert buyers, and all of this must be visible across the entire revenue team. A recent study from Sirius Decisions proves that collaboration is the key to closing.

B2B organizations with tightly aligned sales, marketing & customer success operations achieved 24% faster growth and 27% faster profit growth over a three year period. — Sirius Decisions

Provides reps with tools they don’t have in the outside arena

The desire to accelerate sales engagement and improve digital selling is driving the invention of a wide array of technology and tools that are more readily available to support the advancement of inside sales. Beyond CRM, the foundation of all modern revenue teams, there are technologies that support automating workflows, enabling sales professionals, coaching reps, benchmarking performance and increasing engagement across multiple channels such as phone, email, social, video and SMS. With a powerful enough stack, your inside sales reps and teams can more than 4x their productivity and effectiveness when compared to their outside sales counterparts.

With almost two-thirds of a reps day spent on non-selling tasks and over 57% of sales reps not hitting their quota in 2018, this is a critical issue for sales leadership and sales operations to be actively working to solve. On a positive note, just focusing on foundational capabilities like CRM automation, activity logging, and sales engagement can make a massive impact on your inside sales team’s success. Studies have shown that there’s a positive relationship between how many conversations a rep can have in a day and how fast (or if) they reach their quota. Making sales engagement, process automation, and conversational coaching critical to any sales organization, and these abilities are far more accessible, from both a technology and usability standpoint, within inside sales. Still, think outside sales reps have the upper hand?

The Competitive Advantage — Process & Technology

Mentioned above, CRM is a tool that sales leaders typically see as central to performing both inside and outside sales roles and critical to making decisions and reporting on business health. While outside sales roles have always struggled with the adoption of CRM due to mobility and time limitations, inside sales roles rely on CRM to perform their jobs. It gives inside sales a boost to their efforts by helping to save time and — sometimes — to save face. Most outside sales reps see CRM as a burden or an additional task in their day — a file cabinet for outdated information and management-level activity tracking to keep an eye on their progress.

However, the data housed in CRM is incredibly useful to sales managers and higher-level executives as well as sellers, but not if it is not being updated and maintained by all of the people within your team. With endless research proving the value of CRM, why aren’t all salespeople using it? The number one CRM adoption challenge, according to HubSpot’s 2018 State of Inbound report, is manual data entry. Something that becomes even more difficult when traveling and using mobile devices as in a field sales role. Typically CRM demands that sellers spend a lot of time updating and maintaining records — time they’d rather spend selling.

Rather than accepting this reality or shifting away from CRM, sales teams should work to solve this challenge and consider adopting a native sales engagement solution within their CRM to automate workflows and transform their CRM from a data management platform to an engagement platform.

With the current functionalities found in leading CRM platforms such as Salesforce or Microsoft Dynamics, the ability to map the customer journey, develop processes, and accelerate prospects along their journey from lead to revenue is not only doable, but these platforms accel at bringing your entire sales organization to a central platform and allowing your reps to simplify their day to a single window. Here are a few ways to drive CRM usage through the implementation of a sales engagement solution:

• Automate the creation of Leads, Accounts, Opportunities, and Contacts.
• Automate post-call activities such as voicemail, email, activity logging, and notes capture
• Standardize critical engagement data such as call duration, call outcome, call count, email count, and email open-rate to track engagement.
• Eliminate the need to dial manually
• Humanize the customer experience by serving relevant account or opportunity information to the rep during an inbound or outbound engagement.
• Prioritize leads and contacts based on critical business data and intent.
• Prescribe next steps for Sales Development Reps and Account Executives.

Typically these solutions drive more immediate change within an inside sales function as inside sales professionals work mainly within digital channels such as voice, email, social and virtual meeting platforms and all of these channels can be connected through CRM. All critical updates to customer information are readily available, as well as messages, scripts, recordings of demos, and video calls — all from within one platform. Not to mention, should a rep become flustered amid a cold call, the combined solution of CRM and sales engagement can help keep your rep on track, making sure to touch on all of the prescribed critical points within that sales campaign.

For outside sales reps, these solutions can take a bit more work to deploy and optimize. It is also harder to drive adoption within CRM platforms across outside sales due to the reliance on the sales professional to be logged into CRM. Logically, we all know that sitting behind a computer screen does not benefit face-to-face interaction. Therefore a mixture of outside sales professionals to support on-site and in-person interaction mixed with a robust inside sales team to support engagement and generate new opportunities is an ideal mix for most business models and industries.

The Inside Sales Evolution

Inside sales began in the 1950s as what’s known today as telemarketing. Over the years, this position has evolved to include much more than merely placing calls to long call lists and hoping to sell something over the phone. By 2013, an estimated 53% of salespeople in the U.S. were considered inside sales reps even if that designation was not in their title.

One of the ways inside sales has evolved is that it’s become more prevalent amongst companies ranging from technology startups to the Fortune 100. A study by MIT’s Lead Management illustrates that hiring for outside sales positions isn’t as aggressive as it once was — its .05% growth rate is negligible. On the contrary, hiring for inside sales teams is growing at a much more rapid rate: a steady 7–10% annual increase.

The shift is not only happening at the hiring level but also internally. Many reps hired for outside sales roles are spending more time in-house to close deals, return calls, attend web-based meetings, or send emails. Since digital technology has enabled businesses to shift from operating only in traditional business hours to around the clock, inside and outside reps alike are making and closing deals from cell phones, at home and sometimes after hours due to cloud-based solutions and centralized platforms.

Perhaps the most significant evolution within inside sales, however, has to do with technological advances. Even inside sales has been renamed by many industry leaders as digital selling. A new technology-savvy breed of sellers that understand how to leverage emerging tools, channels, and strategies are dominating in the modern sales arena.

Today’s reps can:

• Connect with hundreds of more leads in a much shorter time frame
• Have more informed conversations based on real-time data
• Work in-office or remote to reduce costs & offer unique employment incentives
• Create a personalized 1:1 sales experience for buyers at scale
• Accelerate the sales process from lead to revenue
• Potentially close more deals

With access to real-time data and the right tools to enable their workflows, your reps are much better equipped to handle the day-to-day functions of an inside sales position. The role of inside sales has transformed significantly since its initial foothold in the 1950s. In the coming decade, these changes will become even more pronounced and force organizations across all industry verticals to rethink their sales strategy and where they focus both their talent and their resources.

What Types of Companies Are Investing in Inside Sales?

Several factors may influence a company’s decision to invest in inside sales, outside sales, or a combination of the two. Typical factors that encourage a company to invest in inside sales are:

• The stage of development & company maturity
• The cost of their sales organization related to revenue growth
• The complexity of the product or sales process
• The size of deals and the accounts they are targeting
• An understanding of how best to present their product or solution
• How management perceives the effectiveness of its sales model
• Product margins and competition within the space
• Coverage capabilities related to the Total Addressable Market

Both startups and high-growth companies know that with each year’s success and quota attainment only comes bigger goals and more difficult growth challenges. If a company is in its infancy, it’s typical for that company to utilize as many options as possible to up its presence in the market. To be able to compete with larger competitors, a new company often needs to pull as much efficiency as possible from a smaller salesforce to compete. For larger, more established companies it is less about coverage in new markets and more about account management, the ability to engage current accounts effectively to continue expansion, as well as minimize costs to optimize revenue growth and develop a less expensive and more scalable sales model.

“With 1,000 outside sales representatives at a cost of approximately $400,000 a year each, it was clear the company could not continue to fund the manpower Carter believed the company needed to sustain its aggressive growth trajectory. It would be Carter’s responsibility to create a less expensive sales model for the company.”- New Science: Pioneering the Inside Sales Revolution, Harvard Business Review Case Study by E. Follett Carter

Management often has an idea of what will work best for their given products or solutions and the associated historical information around their sales cycles. Some sales managers use inside sales reps for their creativity, ability to think on their feet and generate new leads, while using outside sales teams to foster and maintain client relations or to close high-value business deals. How well this works for these companies is directly related to sales velocity, revenue efficiency, and how management perceives it’s working. In other words, management in most instances isn’t going to stick with a plan that isn’t generating revenue — if it’s working, keep it.

However, with changes and shifts in buyer behavior across both B2B and B2C verticals, it is essential to regularly assess the changes within your customers and how the market is making purchasing decisions at large. If customers are mainly engaging with your company across digital channels, it is critical to improving the customer experience across those channels to better support changing trends and not get caught behind the curve. For more established sales organizations, this shift may feel daunting and hard to approach. It may require a new way of thinking and entirely new people, processes, and technology to adapt. The most critical thing for organizations of all sizes is to identify what is not working and make a shift.

If it’s broken, fix it.

Inside Sales Trends — How Are Sales Managers Fixing What’s Broken?

Standing up a new inside sales function within your organization or optimizing the capabilities and outcomes of an established inside sales team is not easy and requires a continual commitment. It’s not that inside sales methods are broken — it’s that sometimes they’re incorrectly applied, not applied at all, there’s no communication between departments, or the team’s approach is all wrong. Some trends showing up in the field of inside sales beyond the core competencies of CRM and sales engagement are:

• Gamification
• A shift toward account-based selling
• Sales Enablement
• Sales & Marketing Alignment
• Sentiment Analysis and Coaching
• Video Messaging

There’s not a single inside sales rep that came out of the womb knowing how to engage a prospect and close a deal effectively. Enablement and training are critical steps in creating a great sales representative. Today’s new tech means that coaches can make the training process more effective — and fun. Gamification of both daily sales activities and sales training can positively motivate your reps to enjoy learning while competing against other reps to book more meetings or close deals if leadership center training around the thrill of the hunt — and the excitement of closing. Your reps are much more likely to care about your goals because now they’re their goals, too.

Combining gamification with sales engagement allows you and your team to automatically track key performance metrics and KPIs that can benchmark rep performance and support a culture of accountability. Increasing the volume of interactions is foundational. The next step is to combine both coaching and enablement solutions so your reps can learn what conversations and content help support deal progression and closed/won opportunities.

Call recordings play a critical role in this aspect of coaching. With the ability to legally capture and maintain customer conversations, sales leadership has a database of real-life interactions that they can analyze and use for coaching. Marketing can even learn what buzzwords and phrases drive the most interest or engagement across calls to better shape their content strategy. Running call recordings through sentiment analysis and AI tools can help speed up the manual process of analyzing calls and give real-time feedback to reps looking to improve their effectiveness over the phone and learn better ways to handle objections.

As you can see, the alignment between sales and marketing in modern sales is critical. Rather than a linear process where marketing only hands-off leads to sales and then disappears, a collaborative strategy and connected feedback loop can drive better insights and decision making across both teams.

This collaborative strategy is the approach fueling the growing shift toward Account-Based Sales (ABS) and Account-Based Marketing (ABM). When marketing and sales are aligned on target accounts and working together to develop awareness and engagement at a company, the individual strengths of each team become much more effective when combined in a well thought out engagement strategy. A unified platform that can give all revenue teams visibility into the stage and status of target accounts with their associated opportunities, contacts, and leads can help support more intelligent engagement and a better experience for the entire buying group.

Once aligned on the engagement strategy, many new engagement tools and channels like video emails and SMS capabilities have been opened up for easy application by digital sellers. Beyond that, Sales Enablement Solutions have been developed to not only monitor buyer engagement with shared content but also suggest marketing content for sales reps to share with accounts based on their stage or status within the customer journey. Putting underutilized marketing resources at the fingertips of sales professionals to expand the resources available for engagement.

All of these innovations have a spot in the modern tech stack of inside sales professionals. Aligned toward the correct strategy and adapted over time as the inside sales team matures, each of these tools can become a game-changer in the evolution and success of your inside sales team. So with all of this focus being put on inside sales, where does that leave us for the future growth of this role?

What’s the Future of Inside Sales?

Will inside sales continue to evolve? Given the nature of the business, it would seem so, and that the future is inextricably linked to the shift in purchasing behavior, the rise of digital channels and innovations in sales technology. When you truly understand the role an inside sales team can play within your organization, you can begin to identify the facts around what makes a successful strategy.

The inside sales role of the future will most likely require more and more specialization. Expecting an inside salesperson to excel at research, prospecting, outreach, discovery, evaluation, presentations, negotiations, and then closing will become a falsehood as processes and strategies mature. The entire lead to revenue process and buyer’s journey will be mapped into CRM and identified by several critical stages. Sales and marketing roles will become even more integrated throughout each step to support the buyer’s journey and will support revenue growth beyond just producing a mix of inbound and outbound sales leads. Sales researchers will use AI to map out account plans, conduct research, and other pre-sale activities by leveraging big data effectively.

Specialized account executives and sales engineers will grow in their roles and will undertake the actual conversations, discovery, account mapping, presentations, and closing the deal. Customer managers (who may not be part of the sales team today) will implement what’s been sold and provide customer service while also working in unison with the other departments within your revenue teams such as sales and marketing to help drive new opportunities from within key accounts.

The inside sales role will quickly evolve from having narrow objectives such as prospecting or qualification to being a critical part of a specialized revenue team, who will share data, trends, and insights via a central CRM platform and the use of sales engagement tools to stay connected to prospects and customers. We will see a greater focus on Account-Based Management from the sales leadership with increased alignment in Account-Based Marketing (ABM) and Account-Based Sales (ABS) initiatives. The sales functions and reward models will look much more like a unified team of sales, marketing, and customer success pointing in the same direction, using the same unified platform and engagement tools, while following a shared playbook.

“Sales teams have evolved from autonomous agents with their own prospecting and closely guarded contact lists to co-equal members of a team sharing lead data, using automation to stay in touch, and using CRM to manage activities and reporting.” -John McTigue, sales and marketing stack advisor, The MarTech Whisperer

The Takeaway

Currently, the inside sales market is growing 300 percent faster than traditional sales. While the size of this growth might catch your attention, the trend shouldn’t be a surprise. Inside sales, defined by the sale of products and services by reps working remote from the customer, relies on engagement through phone and digital channels, rather than meeting face-to-face. While relationships still play a critical role in the ability to win new business and retain customers, rapport building and communication will move into a digital-first strategy where sales professionals leverage digital content, social engagement and unique strategies to build trust without ever meeting their prospects face-to-face.

Customers are more comfortable accessing buying information digitally, over the phone, or through video conferencing applications. Even complex B2B products, and huge companies that have traditionally favored “facetime,” are adopting a fully digital approach.

B2B buying behaviors have shifted with a majority of the buyer’s journey falling into a self-discovery process across company websites and third-party reviews, making a consultative sales approach more beneficial and valuable to sales organizations. By giving in to the customer demand for more digital sales channels, businesses are benefiting from considerable cost savings.

A shift in the necessary skills required to sell and the ability to coach and develop the next generation of sales professionals while leveraging technology to give immediate feedback and prescribe the next steps are on the rise. Advances in technology have reshaped the face of sales. Improvements in supporting tech can provide high-quality prospect data, enabling smarter conversations that help inside sales reps to close more deals with less training and ramp time.

Sales engagement solutions are now able to transform your CRM from a data platform to an engagement platform, giving your reps the ability to choreograph touchpoints across all sales engagement channels in an efficient and personalized manner. Native solutions allow your CRM to not only capture critical data but also give reps the ability to engage with opportunities at scale and eliminate the manual tasks that hinder their progress. These solutions allow inside sales teams to work from a single, and shared, platform and link together their activities to other members of the revenue team such as marketing and customer success for a team selling approach and increased visibility across the entire organization.

An investment in developing your digital sales strategy should first start with aligned and shared objectives across your revenue team. From there, a well-defined process and customer journey will enable teams to collaborate at all customer interaction points in a more meaningful way. Shifting away from more expensive outside sales teams to a more scalable and revenue efficient team of digitally-native inside sales professionals will change both the demographics of your organization and also increase your ability to improve revenue growth. While a balanced team of specialized sellers that includes some element of territory or outside sales reps is the ideal model for most organizations.

The right tech stack that integrates solutions for data, process, engagement, gamification, sentiment analysis, and enablement into a single platform across all revenue teams along with a technology strategy focused on:

• capturing and maintaining meaningful data
• coaching and developing talent
• increasing visibility
• automating manual processes
• enabling personalized sales engagement
• improving collaboration between departments
• coaching and developing talent

This holistic approach will elevate inside sales so that it continues to grow in critical importance within sales organizations and your overall sales strategy.