When creating a sales team and structuring marketing campaigns, managers must consider the benefits of inside sales vs outside sales.
Should they rely on both types to boost sales? Will one type serve a certain type of business better than others? Does one cost more than the other? In order to answer these questions, managers must first understand what inside and outside sales are.
What Are Inside Sales?
Companies that rely more on inside sales communicate with customers remotely. The sales and marketing teams focus their combined energy on creating advertising campaigns that attract customers. These campaigns not only pique customers’ interests but inspire them to take action, such as asking “buying questions” or making the actual purchase.
In the past, companies primarily relied on phones to communicate with potential customers for inside sales. There is now greater focus on web conferencing, emails, chats, and social media. All of these allow salespeople to seek out customers from the office and sometimes even passively through the use of SEO and ads.
What Are Outside Sales?
Outside sales may also be referred to as field or in-field sales. This is because salespeople venture outside of the company to find potential customers. To do this, salespeople may travel long distances via car or on foot to build face-to-face connections.
Note that after they close the deal, these salespeople may then rely on techniques more akin to inside sales to maintain contact because they know further sales may come from these customers. Sometimes inside salespeople handle retention, and other times, the field agent takes care of this on their own. It depends on how each specific company structures its sales teams and resulting responsibilities.
Which One Is Better?
When managers decide on the balance between inside vs outside sales, they often start by looking at how one type compares to the other. Forbes notes that outside sales are still commonly used in larger companies, but inside sales are catching up. Outside sales account for 71.2% of the sales force while inside sales account for just 28.8%. Should you maintain this ratio or try something else? Consider the following:
- Meeting Quotas: Inside sales reps meet their quota 59.1% of the time, while outside sales agents attain their quota 65% of the time. In spite of this, Hubspot found that companies with more inside than outside sales reps enjoyed higher quota attainment by 9.8%. That said, companies dominated by outside sales reps have higher closing rates and secure bigger deals.
- Overall Cost: While outside sales tend to be more effective, they also require a larger initial capital investment. Field agents may require a vehicle and allowances for maintenance and gas. They also receive less supervision, which is a risk in itself. Of course, outside sales management software like SalesRabbit drastically reduces that risk and gives managers a lot more data on rep behavior.
- Paying Workers: Another factor when considering outside vs inside sales is the cost of attracting and retaining workers. Paying market value and higher for labor helps companies to appeal to high-performers. However, note that inside sales reps typically get paid 36% less than outside sales reps.
- Size of Company: Because of the cost factors, smaller companies tend to focus more on inside sales. However, even large corporations report that they plan to work towards a more equal split between inside sales vs outside sales.
- Sales Models: Does your company rely more on relational or transactional sales? Transaction sales models work best for fast sales cycles where sellers do not need to develop a personal relationship with customers. Relational sales models require closer relationships and often feature purchase prices of $35,000 and up. Inside sales work well for the former, while outside sales work better for the latter.
The Power of Field Sales
We believe in combining both inside and outside sales in almost any business to take advantage of the best of both worlds while balancing the risks. Even so, it seems that the main reason companies consider inside sales is to save money. This could damage their ROI in the long run.
How so? Online and phone communications definitely play a role in sales, but field work yields more impressive results. This is precisely why these agents command higher salaries. In fact, Entrepreneur.com estimates that the success rate with face-to-face meetings is 34 times higher than sending an email.
There are several reasons for this. People trust someone they know in person more than they trust the people they only speak to online. Verbal cues and the way someone carries themselves provide additional pointers that build trust and form a more authentic relationship. This helps agents to sell better by selling themselves and the relationship ahead of the product.
Work With SalesRabbit
For companies with outside teams, our app provides agents with the tools they need to sell often, sell well and attain company quotas. Reach out to us with questions or request a free demo to test the power of our app yourself.