Is Inside Sales Better Than Outside Sales? It Depends.

August 28, 2020
inside sales vs outside sales
Image: Shutterstock

Not long ago, Laurie Page had to convince sales leaders that it’s possible to conduct a full sales cycle over the phone.

Page has been a proponent of inside sales since the 1990s, when sales leaders called it telemarketing. She partnered with Trish Bertuzzi to become VP of inside sales strategy at her consulting firm, The Bridge Group, in 2001. Still, outside sales continued to be the dominant way to build relationships and close deals.

What is inside sales? 

An inside sales team goes through the full sales cycle remotely. Inside reps prospect, build relationships with customers and close deals through any combination of email, social media, phone and video calls. Typically, the entire team operates from the company’s office.

Over time, inside sales earned the right to qualify leads, but full-cycle inside sales teams were still a rarity.

It wasn’t until about five years ago that the tides shifted. Thanks to video calling and the abundance of product information available online, buyers are more confident making purchasing decisions digitally than ever before.

Today, inside sales makes up about 45.5 percent of the sales workforce, compared to 52.8 percent for outside sales, according to a report from TeleSmart Communications. And inside sales teams are continuing to grow at a faster rate than outside sales teams.

Still, outside sales has a role to play for most sales organizations. Although many argue over the merits of inside sales versus outside sales, the conversation may be better framed around how inside sales and outside sales can work together.

What is outside sales?

An outside sales team (also known as field sales) is one that meets customers face to face. Field sales reps may use some inside sales tactics to prospect customers and establish connections, but most of the relationship building and sales process is completed in person.   

We spoke with Page, PatientPop VP of Inside Sales Kevin Dorsey, Badger Maps CEO Steve Benson and Orum VP of Field Sales Colin Specter about the dynamics between inside sales and outside sales teams.

 

organization chart inside sales vs outside sales
Image: Shutterstock

Inside and Outside Sales Pros and Cons

What are the advantages to starting with inside sales?

The advantages of an inside sales team boil down to efficiency and coverage area. It’s common sense that reps can set more meetings and talk to more customers over the phone than by traveling from office to office.

Kevin Dorsey
VP of Inside Sales, PatientPop

The combination of high efficiency and volume makes inside sales perfect for a company that relies on smaller deals and higher-velocity sales, Page said. That said, technological advancements like Zoom have made it easier for salespeople to close enterprise deals remotely as well.

Starting with inside sales can also help a company learn about its customers faster than a field sales team, because reps are talking to more buyers, Dorsey said. The trade-off, however, is that field sales teams are able to gather more accurate information about the customer. They’re meeting with buyers in person and can better see what they actually respond to.

“If you have a good feel for the product-market fit, then going inside is better because you can just go faster,” Dorsey said.

 

Where does outside sales shine?

While an outside sales team can’t compete with the volume and efficiency of inside sales, it makes up for it in relationship building.

Steve Benson
CEO, Badger Maps

The ability to meet face to face and to read body language — or comment on a picture of a person’s dog on their desk — builds an inherent trust between the buyer and seller, Benson said. It’s also helpful for connecting with multiple stakeholders at once and gauging their interest, rather than trying to connect via Zoom or in a lengthy thread of emails.

Those relationships can reduce the risk of an enterprise sale falling through, Specter added.

At Orum, the ability to let customers demo its automated dialing tool has often been the deciding factor in enterprise deals. Being there in person allows the rep to troubleshoot and coach teams on the tool so that the buyer can see it in action. Nothing beats having a buyer see 40 or 50 reps using its tool at once, Specter said.

“It became part of our sales motion,” Specter said. “If the contract value was over $100,000, the field sales team went on site.”

 

What do you need to consider when deciding which sales team to build first?

If you’re deciding on which of the two sales functions to build first, it can be tempting to assume inside sales is the only way to go. And there is some credence to that, according to Page.

Laurie Page
Vp of Sales Strategy, The Bridge Group

For starters, she mentioned that buyers are increasingly becoming more comfortable making purchasing decisions remotely and already do most of their research online. Video streaming and presentation software have also helped to make inside sales feel more personal. Inside sales has increasingly become the go-to way to sell for companies, growing 15 times faster than field sales — and COVID-19 appears to be widening that gap.

But assuming society does go back to normal (we’ll touch on this later), there’s still room for field sales. In fact, Benson believes more tech companies would benefit from in-person sales. It comes down to deal size and type.

If the contracts are more transactional and geared toward SMB customers, an inside sales team can get the job done. But for complex six-figure deals, having a field sales team that can meet the customer face to face can help compress the sales cycle, Benson said.

It became part of our sales motion. If the contract value was over $100,000, the field sales team went on site.”

Field sales has a reputation of being expensive and inefficient, when compared to inside sales. Benson pushes back against that. While a field sales team can’t talk to as many customers, it compensates for that with generating higher-value deals. Being in person gives reps the opportunity to call bluffs and build relationships that lead to bigger deals, he said.

Ultimately, the best approach is to figure out how your customers like to buy and build a sales structure to fit that. Dorsey suggested surveying a variety of customers and asking them how they prefer to make their purchasing decisions.

More on Sales StrategyYour Guide to Building a Successful Enterprise Sales Strategy

 

sales-structure-inside-sales-vs-outside-sales
Image: Shutterstock

Structuring Inside and Outside Sales Teams

How should you structure an outside sales team?

Structuring an outside sales organization requires balancing territory and existing relationships. Field sales reps are typically given regions or zones of coverage that can be as broad as “any company east of the Mississippi River,” or as specific as a subset of area codes within a given city.

It all depends on the concentration of customers, projected revenue and prospects, Benson said. There are also tools like eSpatial, or Benson’s company, Badger Maps, that can integrate within a CRM and help a sales leader divide up regions. Where it can get tricky is if a salesperson has a five-year relationship with a customer outside of their region of coverage.

Often, it’s better to allow them to maintain that relationship, even if it’s less efficient for the sales team, Benson said.

At Orum, Specter has field sales reps based in San Francisco, Detroit and Los Angeles, while Specter is based in New York. This allows them to cover their bases in each region.

The key to building a thriving field says team is to allow those reps to operate like franchise owners in their given territories, Specter said. Each is responsible for prospecting and forming relationships with their customers, and they’re able to do that however they see fit.

 

How should you structure an inside sales team?

An inside sales team typically operates out of a company’s office and can include a mix of SDRs, account executives and account managers. It can be helpful to divide the team based on territories or by specific accounts.

At PatientPop, Dorsey’s inside sales team includes 30 account executives and 35 SDRs. Both teams are structured in tiers that expand on rep responsibilities and create a natural career growth plan. For example, account executive 1s are responsible for the full sales cycle, while account executive 2s receive support from the SDR team for bigger accounts.

One of the advantages of having an inside sales team is that you don’t need as many reps to cover a specific region, since there is no travel involved. Instead, all of the prospecting, meetings and negotiations can be done virtually from the office.

 

How does the sales process differ between outside and inside sales?

In most situations, the sales process for both teams will be the same. Whether you have an inside or outside sales team, all prospecting starts with researching companies and the LinkedIn profiles of buyers to qualify opportunities. The customer’s mission, values and a sprinkle of personal information helps to make the outreach more personalized and effective.

Colin Specter
Vp of Field Sales, Orum

For any rep, it can take anywhere from 12 to 14 personalized messages — email or phone — to set up a meeting, Dorsey said. Most outside sales teams are able to do this part remotely, and, in fact, Dorsey suggests it’s best for field reps to only visit a company when they need to close the deal.

That’s how Orum operates. Field sales reps only travel to a company after they’ve qualified the opportunity, spoken with all of the stakeholders and met an internal threshold, Specter said. The visit’s purpose is to then run the pilot and close the deal. This can help cut down on travel costs and prove ROI for a field sales team at an early stage startup, Specter said.

 

Inside and outside sales can work together.

In Dorsey’s opinion, the most effective sales structure actually combines inside and outside sales reps, since the two teams naturally compliment each other. Inside sales reps can cover more range than field sales reps, while the latter can go onsite and drive home larger deals.

Both PatientPop and Orum have mixed teams divided up based on deal sizes, with the small-to-mid-size deals being managed by the inside sales reps and the larger, six-figure deals going to enterprise reps.

The ideal blend would be an 80:20 ratio, with more inside sales reps than field sales reps, Dorsey said. This allows a company to reach more target customers, while still having reps on hand for high-touch deals.

 

sales strategy inside sales vs outside sales
Image: Shutterstock

Skills and Training

What are the most important skills for inside sales reps?

When an inside sales rep reaches a prospect on the phone, they have about 10 seconds to pique their interest and keep them engaged. They need to be masters at building product awareness, familiarity and curiosity over the phone.

It can be tricky, especially without the opportunity to rely on non-verbal communication. In person, a big smile and positive energy can overcome a lot and put the customer at ease. Likewise, a rep can read the room and catch every eye roll, shoulder shrug and lean in, and react.

Even lowering your voice brings someone in and it implies importance to what you’re about to talk about.”

To overcome that, an inside sales rep needs to be a great listener and a master of tone, Dorsey said. If a customer’s tone is off, a rep needs to hear that and address it. If the person doesn’t sound excited, the rep needs to ask about it.

At PatientPop, Dorsey’s sales reps have gone so far as to name tones — there’s the “lost in the city” tone, the “Scooby Doo,” the “might make sense” and the “thank God.” The team learns how to listen for those tones and how to use them.

They also learn how to use negative downtones to shift the flow of conversation. Too often, reps default to positivity, even when a customer is sharing their pain points, Dorsey said. What they need to do instead is respond intoning downward on words like, “Huh,” “Oh” and “Ah.”

“That’s what creates that doubt and curiosity,” Dorsey said. “Even lowering your voice brings someone in and it implies importance to what you’re about to talk about. These are the types of tones we go through — phone or in person. If you master it in person, it’s even more powerful.”

More on Sales StrategyHow Successful Startups Avoid Selling to People Who Aren’t Buying

 

What skills does an outside sales rep need to thrive?

Where an inside sales team needs to master tone and listening, a field sales team needs to be skilled at reading body language and presentation.

A field sales rep needs to react in real time to the needs of multiple stakeholders. For companies with inside sales teams, Benson suggests having reps develop their presentation and relationship-building skills on those teams first and then promoting them to an outside sales system. Frequent role playing in the office can go a long way toward helping a rep develop confidence.

The best way to describe outside sales is that you’re doing everything you do in inside sales, except you also have to have the presence of presentation.”

The ability to read the room can also help a rep close higher-value deals. During one field sales meeting, Benson recalled watching a CFO explain how his team didn’t need to re-up the tech Benson had sold them. At the same time, Benson noticed an engineer rolling their eyes, a hint that signaled the CFO was bluffing.

When it came time to negotiate a new contract, Benson used that knowledge to push for a full-value deal. And it worked.

“The best way to describe outside sales is that you’re doing everything you do in inside sales, except you also have to have the presence of presentation,” Benson said. “Face-to-face negotiations are different than doing it over the phone, and you also need those relationship-building skills.”

 

inside sales inside sales vs outside sales
Image: Shutterstock

The Future of Inside and Outside Sales

If you’re building a sales team today, there’s no avoiding the microscopic virus in the room. The spread of COVID-19 halted most field sales activity and forced teams to adapt to remote selling. What this means for the future of outside selling in tech is up for debate.

Page believes the circumstances are simply hastening a future that predominantly relies on inside sales. Technology has already helped blur the line between in-person and remote, and buyers are increasingly more comfortable making purchases online.

But inside sales isn’t immune to change, either.

Both dating and sales are enhanced by the internet and technology, but the internet and technology will never replace in-person dates and in-person field sales.”

Since inside sales traditionally refers to a team that works in an office together, adapting to remote selling has been a challenge for inside sales teams, Page said. The office helps to unify the sales process and can help leaders provide coaching and development. The future dynamic of an inside sales team might be one that has employees start in an office, and then earn the freedom to sell remotely.

In Benson’s opinion, there will always be a need for field sales, even in tech. There’s just no replacing the value of face-to-face interactions.

“Both dating and sales are enhanced by the internet and technology,” Benson said. “But the internet and technology will never replace in-person dates and in-person field sales.”

Ultimately, what it will come down to is what future customers want. Specter’s field sales reps have transitioned to inside salespeople. While the sales team hasn’t missed a beat, it also hasn’t been able to close the enterprise-level deals that its field sales team generated before the pandemic. However, that may change as companies become more comfortable in a remote-first world, he said.

And if it does, he’ll be ready to change with the times.

“It’s just going to really depend on our customers, and if they get back to work in the office,” Specter said. “And we’ll meet them there if they want us to.”

More on Sales StrategyBest Open-Ended Questions to Ask on Sales Calls

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