Inside sales and outside sales are often confused as the same thing, but they are actually very different. Inside sales are done by people who don’t work on-site at a business; instead, they make their calls from an office location. On the other hand, outside sales are done by people who go to clients or potential customers in order to sell them products or services. This post will help you better understand each type of selling so that you can decide which one would be best for you!
Inside sales are gaining prominence in the modern business landscape. It represents the application of technology to process on-demand customer interactions. "Inside" refers to internal employees who are often employees of a company vs. external agents, also known as outsourced telemarketers or third-party reps. Inside Sales takes place over the phone or via email, where Outsourced Telemarketers take place over text/SMS messages, web chat, and hotlines.
The ubiquity of mobile phones has led many companies to offer 24 X 7 support alternatives for customers through Inside Sales that were unheard-of in the past when this was mainly reserved for outside sales reps with quotas to meet every day!
The emergence of new technologies and changing consumer habits have been two major factors in the evolution of sales. The role that inside sales reps play has shifted significantly, and their duties often overlap with those of outside reps. While both inside and outside reps represent a significant part of a business's revenue generation potential, they each have their unique selling styles and methods which contribute to overall customer satisfaction.
Inside Sales vs Outside Sales
Let us briefly discuss various ways we draw the line between inside sales and outside sales.
A company can assign a rep either inside or outside based on skillset, goals, etc. Inside reps work on the company's premises, while outside reps generally work from their homes or an office.
It may help for the inside rep to understand how outside sales work so they can serve as a better assistant. While both inside and outside reps represent a significant part of a business's revenue generation potential, they each have their unique selling styles and methods which contribute to overall customer satisfaction.
For example, inside reps might follow up with customers who are interested in products by providing more information about them through email or phone calls -- but if there isn't enough interest after several attempts, they'll probably pass along this lead to an outside sales member who will discuss the product face-to-face with the customer.
Inside sales reps work with customers who are already familiar with your brand and understand your product or service offerings. Let's say you're selling beauty products; an inside rep would sell to existing customers that have already shopped at your store or online, but haven't bought anything recently. This means that they would be moving upmarket by selling more expensive items than what your average customer might purchase without any help, so it follows that this type of rep is good at talking people into buying higher-priced items over time instead of simply closing a single transaction.
As opposed to the inside rep, outside reps are usually responsible for generating new leads via cold calls. If you own a restaurant, an outside rep might call up people who don't have any idea what your business does and try to convince them to come in for lunch or dinner.
What are Inside Sales?
Inside sales (also known as "contact center technology" or "inbound contact center") is the application of consumer interaction technologies to process on-demand customer interactions. Inside Sales takes place over the phone and via email, where Outsourced Telemarketers take place over text/SMS messages and webchat channels like Skype and Google Hangouts (and some more).
The ubiquity of mobile phones has led many companies to offer 24 X 7 support alternatives for customers through Inside Sales that were unheard-of in the past when this was mainly reserved for outside reps with quotas to meet every day!
What do Inside Sales reps do?
Inside sales are gaining prominence in the modern business landscape. It represents the application of technology to process on-demand customer interactions. "Inside" refers to internal employees who are often employees of a company vs. external agents, also known as outsourced telemarketers or third-party reps. Inside Sales takes place over the phone or via email, where Outsourced Telemarketers take place over text/SMS messages, web chat, and hotlines.
The ubiquity of mobile phones has led many companies to offer 24 X 7 support alternatives for customers through Inside Sales that were unheard-of in the past when this was mainly reserved for outside reps with quotas to meet every day!
Inside sales positions are designed to reach out to customers via phone or email to qualify them for an upcoming sale or long-term loyalty. It's important to note the distinction between Outside and Inside Reps: most companies use both inside and outside reps to sell their products/services, but these two specific roles require different skill sets and work styles. The main differences between outside and inside reps include:
1. Inside sales reps take orders from customers over the phone or by email. The process of taking an order is known as a "hand-off" and it happens when a customer calls in to talk to a representative. Once the rep takes down all the information, they send it on to an outside sales team member who fulfills the customer's request by placing an order with a vendor or supplier.
2. Inside sales reps take orders from customers over the phone or by email. The process of taking an order is known as a "hand-off" and it happens when a customer calls in to talk to a representative. Once the rep takes down all the information, they send it on to an outside sales team member who fulfills the customer's request by placing an
3. Inside sales reps can get creative with how they get new customers because they're sitting right under their noses. One classic example is when an inside rep gives out free samples of beauty products at department stores and then follows up with these sampled customers via email or phone later on.
Inside and Outside Sales Activities
The main objective of inside sales is to fulfill customer demand under cost-constrained conditions. Inside sales representatives use their skills, technology, knowledge, and/or experience to handle inbound inquiries by identifying the nature of each inquiry, prioritizing them based on needs, determining when to refer the caller to an outside resource or escalate the call back to the lead generator (the individual responsible for generating leads).
Successful inside sales agents are trained to be professional advisors who can resolve customer issues quickly while maintaining long-term relationships. They strive not only for excellent performance but also take pride in developing expertise within their departments. This means they become highly knowledgeable about the company's products and services, they gain a deep understanding of customer needs, and they become skilled at uncovering new opportunities for cross-selling the company's offerings.
Outside sales reps' main objective is to generate revenue either through up-selling existing customers or by finding new prospects. Reporters often use their relationships with current clients to establish credibility when pursuing new business from prospective buyers. In addition to generating revenue, outside sales representatives are accountable for achieving quarterly, monthly, weekly, daily sales quotas. Outside sales reps have complete control over their income - which is why this job appeals to people who like having a lot of freedom and working on a per commission basis.
What do Outside Sales Reps Do?
1. Sell new products. This includes creating a new presentation, identifying appropriate opportunities, visiting clients and prospects on-site, presenting the company's value proposition, negotiating price and terms.
2. Sell add-on items to current customers. Outside reps have flexibility in how they meet their quotas so this is a great way for them to get creative with how they sell their company's offerings - whether it involves hosting a customer appreciation event at a local restaurant or giving out free samples of a new product line at a department store!
3. Provide support services such as technical assistance, installation/training/maintenance, etc.
4. Serve as business development representatives by developing new relationships that can result in future revenue through new accounts or expanded existing accounts.
5. Develop competitive advantage by identifying new customer requirements in terms of products, services, and specifications.
6. Identify opportunities to increase overall sales within an existing territory.
Inside and Outside Sales statistics
The difference in how inside and outside reps make their quotas can be clarified by looking at some real numbers:
1. Inside Sales Reps need to reach only 8% of targets to close 75% of the quota
2. Outside sales reps need to hit 50% of targets to close 15% of the quota
3. The average conversion rate for outside reps is 20%, while the average conversion rate for inside reps is 60%.
4. On average, when a lead becomes an opportunity it costs $6 when an inside rep generates it, but costs $56 when an outside rep does.
5. 81% of companies expect the number of salespeople to remain the same or increase in 2015
6. According to Universum's 2014 Employer Branding Ranking survey, sales is now higher on the list of industries that students want to pursue their first job than it has ever been before.
7. 82% of reps who join a company with an average quota turnover rate below 15% will meet their quotas, while only 31% of reps joining a company with a quota turnover rate above 30% will meet their quotas.
8. Salespeople who call on large accounts (those with over $100 million in annual revenue) close an average of 10% more of their quota than those who work on mid-sized and small accounts.
Should you outsource your inside sales team?
Outsourcing is a popular option for many businesses, especially those just starting up.
Outsourcing your inside sales team can provide some benefits:
1. It takes the burden off of you to develop and train your employees
2. You can benefit from high-quality knowledge and expertise within a new industry or area of business without having to invest the time and money it would take to educate an inside employee personally on those areas (for example, insurance companies outsource their claims departments because they already have enough employees on staff with experience in the industry. It's not as though they would require an additional education program on how to handle insurance claims before hiring someone!)
3. Talent is readily available
4. You can find a variety of price points that fit into any budget
But outsourcing does come with some weaknesses:
1. The cost-benefit analysis must be done before entering into an agreement, so you know what you are getting yourself into and don't have any surprises later on in the process.
2. The main thing that differentiates a company from its competitors is its people. If you outsource, you may end up missing out on the intangible things that make your business special and/or give it an edge in the marketplace.
3. It can be difficult, time-consuming, and stressful to manage a remote outside sales team
4. You have no control over what kind of talent a staffing firm will send you, so quality may vary
5. Unless you have a very well-planned training protocol in place, there's little hope for developing good habits within your outsourced employees - but then again if they already have good habits from their previous roles that's an advantage!
Inside and Outside Sales Salary
At the end of the day, compensation and sales incentives can be completely dependent on your industry and business model, so it's difficult to generalize about what you should pay. However, there are some figures that might help you get a ballpark estimate:
1. Inside sales reps earn an average of $51K while outside sales reps earn $72K
2. Just 4% of inside reps make six figures
3. On average, 1 in 7 customers is closed by an inside rep
Inside Sales vs. Outside Sales Quota Attainment
While quotas for inside and outside reps tend to be similar, there is a significant difference between inside and outside rep quota attainment.
1. The average quota attainment rate for inside reps is around 77%
2. The average quota attainment rate for outside reps is only slightly higher at 78%
Inside and Outside sales model
The ideal inside sales model will have at least some reps on the phone, but more may be necessary depending on your specific business needs. Outside reps are best for working leads you receive from marketing or referrals, while inside reps are best for managing existing customers and/or closing deals that originate in-house.
Wrapping Up
As we can see there is a difference between Inside Sales and Outside Sales activities, the basic rule of thumb to determine if you should hire an inside or outside rep is to identify how many and what type of prospects (based on size) you need to close; if it requires mostly cold calling and the majority of your prospects fall within a certain revenue bracket then outside sales would be the best option. But if moving existing customers to upsell or cross-sell is your main objective then inside sales would be the best option.
