Inside v Outside Sales: Which is Better for Your Business?
One of the greatest decisions that can come with running a business is deciding whether to focus on inside or outside sales primarily. Since the onset of the COVID-19 pandemic, many sales teams have opted for remote sales calls. As normalcy begins to return, companies have again started looking at their sales options.
Sometimes the options seem to be at total odds, with one focused on clients with higher acquisition costs and high annual account value (ACV), and the other is more focused on a high sales velocity. Truthfully, it can benefit your company to utilize both to succeed fully. Below, we will look at the strengths and weaknesses of each sales type and how to determine the best balance between the two for your business. Let's dive in!
What's the Difference Between Inside and Outside Sales?
There is no single answer when determining which sales strategy to use. It all depends on your business, location, and customer preferences and needs. Anecdotally, inside sales teams are growing substantially faster than outside sales teams (about 15x faster, to be exact). Organizations are banking on in-house sales teams. This can be attributed to components like the growth of software companies and that companies can now quickly sell to customers worldwide.
Another factor promoting inside sales is that inside sales spend about 71% of their day selling. Outside sales representatives typically spend about 41% due to longer travel times and challenges associated with organizing in-person meetings. With the ever-growing number of digital products and services, and tools like Zoom, Google Meets, and other similar video conferencing platforms, scheduling sales pitches and product presentations is much more viable than ever. An outside sales team can focus on lower volume and spend more time on specific enterprise clients with particular needs and longer sales cycles. However, there are still benefits to having both inside and outside sales representatives in 2022.
What are Inside Sales?
Inside sales are the processes of selling to a consumer remotely. Inside sales representatives use phone calls, emails, and other digital channels to reach new prospective clients. Depending on the company structure, they may also receive inbound leads obtained by marketing teams. If your business sells something that can be sold remotely, such as software, then an inside sales team will offer a wide range of benefits.
What are Outside Sales?
Outside sales are when sales representatives meet with prospective clients in person. Outside sales reps don't spend a lot of time in the company's physical office location. They must travel to meet with clients in their location or a mutually agreed upon location, thus spending most away from the company site. The term "outside sales" is often used interchangeably with "field sales," so it is essential to recognize that when moving forward in your research.
Outside sales are growing much slower than inside sales (the pandemic did not help). However, there are still reasons to utilize an outside sales team.
Benefits of Inside Sales
There are some significant benefits to having an inside sales team. Let's look at a few of the more significant ones below.
#1. Quicker Response Time to Prospects
An inside sales team can quickly respond to new leads via phone or email. The customer already has expectations of remote communication, so they will most likely appreciate phone, video, email, or even chats over an in-person visit any day. With an outside sales team, your representatives would need to make the trip to the customer's location and be available to answer any questions or provide product information or assistance.
#2. Reduced Cost of Sales
Your sales team members can send emails or make calls much faster than they could visit prospective customers in person. Each contact with a new prospect costs less with an in-person sales team than with an outside sales team.
#3. Agents Can Spend More Time Selling
Inside sales agents spend 35% of their workweek selling, compared to 22% for outside sales reps. Inside sales reps don't spend time traveling, so they can spend more of their time generating leads, prospecting, and following up with clients.
#4. The Team Is Easier to Scale
Hiring an outside sales team is tricky these days. Each agent tends to be location-specific, and it can be challenging to reach new territories. Sales reps may be reluctant to switch territories too. Additionally, expansion is slow. Your sales team may need location expertise to succeed fully. Inside sales reps are far scalable and require little location-specific training or knowledge, so they rely much less on customer relations.
Local dialing has proved successful for inside sales teams and customer relationships. Local dialing presence is a feature that automatically matches your outgoing phone number to the area code you dialed. This is important because people are nearly 4x more likely to answer a call from a local number. That means 4x more opportunities to make a sale.
Many people will send your call straight to voicemail if a number is out of their locality. That's where the next trend can be beneficial! With VoIP providers, you can secure phone numbers that reflect a local presence for cold calling purposes.
#5. Increased Collaboration Among Teams
You can compose your inside sales strategies to promote collaboration among teams. For instance, one team member can conduct introductory calls to determine the customers' needs, and after the call, they can pass them along to a representative. An outside sales process typically relies on one person managing the entire process and is much more independent than collaborative.
Benefits of Outside Sales
If spending more time in person with clients makes more sense for your business, then investing in an effective outside sales team may be the right move. Let's look at a few main benefits of an outside sales model.
#1. Develop Stronger Relationships with Clients
Building meaningful relationships with clients over the phone can be tricky for many. Outside sales enable your team to build relationships with each client and personalize the sales process to their specific needs while putting a face to the company name and building trust.
#2. Higher Close Ratio
Salesloft conducted research and found that outside sales representatives convert prospects 40% more than inside sales reps. This doesn't mean outside sales teams are better in every situation, but if you're selling to larger clients, in-person meetings can be far more influential than an email or a video call. It's also easier to manage complex sales processes that involve many decision-makers when meetings happen face-to-face.
#3. Commission Can Be Incredibly Motivating
Most outside sales team agents operate on a commission-based payment system. Outside sales are often used when selling to larger enterprise clients, so commissions are often higher than inside sales calls. This can be very motivating for your team members and ensures that the sales team's primary focus is on closing deals with qualified customers.
Your company will need to find its own unique balance between inside and outside sales. It may cost less to build an inside sales team (and it can be scaled more easily), but if your business often sells to enterprise clients with longer sales cycles, then outside sales may be a better fit for your business.
Our team of representatives is here to help! Let us show you how VoIP can help you in all areas of your business. From its collaborative functionalities to mobile applications, VoIP can be critical to your business's success.