Inside sales vs outside sales – is one better than the other? Which one should you focus on for your business? Like many other business topics, this one generates plenty of debate. And like many other issues, the answer is not straightforward. The right choice depends on factors particular to your business.
Before getting into the difference between inside and outside sales, you need to know what they are. Once you understand the terms you can decide how to organize your sales teams and if one should take precedence over the other.
What are inside sales?
Inside sales mean selling remotely, from the salesperson’s desk instead of going out into the field. In other words, your sales are generated from within your office, hence the term inside sales. Inside sales use remote communication tools like phone, email, video, etc. to reach prospects and close sales. It’s a major component in B2B (business to business) selling, especially in the technology sector.
However, inside sales are not the same as telemarketing. The latter is scripted and rehearsed, so much that even a bot or computer can do it. Inside sales still require salespeople to use their skills to generate leads and convert prospects.
What are outside sales?
Outside sales are also called field sales and it involves face-to-face meetings. Outside sales need a lot of travel, emotional intelligence, and the ability to work independently. It is the traditional sales model and a large number of organizations still rely on it. While a part of outside sales can be done over phone, Zoom, or other virtual tools, the bulk of it involves in-person meetings.
Before the internet and remote communication tools, outside sales was the only viable method to close sales contracts. Today, the line between inside and outside sales is quite blurred and some organizations tend to use both depending on the situation.
Difference between inside sales and outside sales
What are the major differences between the two and why would you want to focus on one over the other? Whether you want an inside or outside sales team will depend on multiple factors including:
Type of product/service
Inside sales are typically good for one-time purchases, low-value products, or impulse purchases. Think about it for a moment from the customer’s perspective. They are more likely to buy something without seeing it in person or talking to a salesperson when the risks and costs are low.
But if you’re talking about a product or service that changes the way they work or transforms the business, most people want to see a demo or talk to a salesperson face-to-face. A prospect may be willing to buy printer paper over email but few organizations want to commit to a multiyear or multi-billion dollar contract without in-person meetings.
Skills needed
Both types of sales require skilled salespeople but the type of skills they need differs.
For instance, inside sales is more of a desk job where the person usually comes into the office and has a set schedule. They talk to multiple prospects at once and are often closing several sales during the day. It means they should be able to multitask effectively and be comfortable using virtual tools. An inside salesperson should know the product or service inside out and have the ability to communicate these features in writing.
On the other hand, outside sales require a lot of travel since you have to meet the prospect. The salesperson may need to go to the client’s office, conferences, and other far-flung locations. They need to be flexible and be able to work independently and should always be professional as they represent your business in the field. They typically work on a single deal at a time (since they need to be there physically) and each sale often takes longer to close.
Target audience
The target audience also matters for inside vs outside sales. If you’re selling a high-value product that requires sign-off from C-level executives or a committee, then outside sales is the answer. You’re not likely to close the deal without several meetings, demos, product customization, etc.
If you’re selling small products or one-time purchases, it’s more likely that a manager or single person can buy it. Since it doesn’t need much time or research and involves fewer risks, inside sales teams can deliver more value on these scenarios.
Sales value
Outside sales tend to be higher value contracts than inside sales. They close fewer deals but each deal will be more profitable for the business. There’s a reason why field salespeople are often the stars of the sales team or division.
Inside sales are driven by quantity, not quality. The team will close multiple deals in a day but they are often less profitable. However, you can scale inside sales teams much more easily. All you need is a computer and appropriate software for the new salesperson to use. Outside sales teams require bigger budgets as you need to allow for travel and accommodation expenses, a car, meeting rooms, etc.
Sales velocity
Inside and outside sales go through the same stages of a sale. The difference is that inside sales go through them much quicker. A typical outside sale may take weeks to close from start to finish i.e, from the initial meeting to signing the deal. At the same time, the inside sales team will generally close several deals.
With the widespread availability of remote communication tools, outside sales can also conclude a bit faster. But they still cannot compete with the velocity of inside sales.
Closing rates
Outside sales generally have higher closing rates than inside sales teams. The salesperson can focus on a particular deal and cultivate relationships with prospects. They can pay attention to the small details which can make the difference between a successful or failed deal. All this means inside sales have to contact more prospects to generate similar sales numbers. But since they have lower costs and tools to contact multiple people simultaneously, it does tend to even out in the end.
Strategy
Inside sales are suitable if your sales model is set up for automated sales channels and is transactional. If your product requires demos, meetings, and other interactions, it means salespeople need to cultivate long-term relationships with prospects. It lends itself to the outside sales model.
Compensation structure
Another difference between the two is the type of compensation for sales teams. Outside sales generally used a commission-based approach. As they typically sell to higher-value clients, this approach makes sense. It provides an incentive to close deals and cultivate loyal customers. Although outside sales teams may also have a base pay, they tend to earn more from commissions and profit-sharing.
Inside sales generally use a base pay structure with bonuses where appropriate. Inside sales tend to be smaller in value but more in terms of quantity. So bonuses for your salespeople may take the form of incentives for higher sales numbers rather than percentage-based commissions.
Hybrid sales model
There is no question that inside and outside sales are very different beasts. Instead of focusing on one over the other, some organizations are adopting a hybrid approach that combines the benefits of both.
You can have both inside and outside sales teams that focus on different market segments or products within the business. You can equip the outside sales teams with remote tools so they can speed up the sales process.
Or you can have your inside and outside teams working together. The inside team focuses on prospecting, contacting potential clients, and funneling them through the sales channel. The outside team will focus on demonstrations, high-value contracts, and closing deals.
There are several ways you can combine both approaches and design a hybrid model that meets your business needs.
Any sales team needs the right tools
Whether it’s a good CRM application or a robust phone system, your salespeople deserve the best technology to back them up. If you’re not already using VoIP phone service, now is the time to make that choice.
Very few organizations are happy with the limitations of traditional landline phones. You have a mobile, flexible sales team that can respond to customer needs. But they constantly struggle to set up meetings or to return voicemails because of outdated technology.
Instead of having separate tools for the inside and outside sales teams, you can have a comprehensive and integrated solution that caters to all their needs. Hosted VoIP services generally offer everything from visual voicemail, call groups, internet voice calling, mobile devices, to group video chat and conferencing. Your phones can also integrate with your chosen CRM solution to work together seamlessly.
Whether you want your teams to stay separate or incorporate a hybrid approach, there’s no doubt they will need the right tools to do their job. While small and mid-sized companies typically use hosted VoIP phone services, even larger businesses are moving to adopt this technology. So go ahead and equip your sales teams with the best communication tools you can get!
