Inside Sales vs. Outside Sales: 3 Key Differences

inside-sales-vs-outside-sales

For years, inside sales reps took a backseat to their higher-paid, harder-to-manage colleagues in outside sales. That was before the Internet totally disrupted the way buyers and sellers interactand the methods that companies use to generate revenue. But what is inside sales and why has it taken over numerous industries?

The inside sales revolution really started to take off during the U.S. financial crisis in 2008. It began, as most major movements do, with the little guys. When the economy faltered, small- to medium-sized businesses gravitated to the less-expensive and more-predictable inside sales model.

In the past two or three years, large enterprise companies have followed suit, as they have seen smaller organizations scale rapidly at a fraction of the cost of traditional operations. Many companies still maintain a trimmed-down team of outside sales reps. But even their outside reps are spending more time selling remotely using the telephone and Internet.

To better understand this seismic shift, let’s compare inside sales vs. outside sales. There are three key differences.

What is Inside Sales and How is it Different?

1. Customer Acquisition Costs

outside-sales-rep Inside sales teams can bring in new customers for 40 percent to 90 percent less than field reps, according to the Harvard Business Review.

Here are a few of the reasons that outside sales is more expensive:

  • Field reps command higher base salaries.
  • It involves a lot of travel, which adds costs and creates inefficiencies.
  • Outside reps are more likely to take their “rolodexes,” or relationships and important customer data, with them when they leave the company.

Inside sales reps can contact prospects much more quickly and efficiently. They leverage technology like web-conferencing platforms, intelligent dialers, CRM databases, social selling tools and slide analytics software to supercharge the sales process and reduce cost per acquisition. The emergence of low-cost, easy-to-use SaaS tools has given inside teams the competitive edge against their pricey counterparts out in the field.

2. Revenue Predictability

Aaron Ross might be the godfather of inside sales success. He built a team and a process at Salesforce.com that generated $100 million in recurring revenue. He could predict how much revenue a salesperson would produce and how much it would cost the company using his CRM.

And he did it by ignoring the conventional wisdom of outside sales.

Ross points out in his famous book “Predictable Revenue” that if you want to create predictable revenue, you should focus on your leads.

“The better your lead generation is, the less dependent you are on the quality of your salespeople and sales process,” – Aaron Ross.

Inside sales sits at the intersection of sales and marketing, with dedicated prospecting teams generating qualified leads for your closers. One of the biggest mistakes you can make is to hire expensive outside reps and expect them to fill their own pipeline.

Ross says closers don’t like to generate leads and they’re not very good at it. Relying on old-school elephant hunters to source their own deals is an outdated tactic that no longer works for most companies.

3. Required Skills

Sales reps, like most American workers, are now required to do more with less.

Nancy Nardin has compiled a nice list of tasks that take up a salesperson’s time.

Here is a brief list of tasks and skills that she says you need to succeed:

  • Administrative Skills: Creating and updating forecasts, logging call results, and getting internal approvals.
  • Prospecting Skills: Finding the right contacts, deciding what to say, and making contact attempts.
  • Closing Skills: Proving ROI and value, proposal/quote creation, and obtaining signature.

When you think about all of the little tasks that go into making a sale, it’s easy to see why sales pros are so pressed for time. That’s one reason that inside sales is quickly taking over outside sales. Inside reps spend significantly more time in the office, so they are much better equipped to perform administrative and prospecting tasks. Plus, the handy tech tools that make these tasks easier are readily available to inside sales reps, so important tasks don’t get put off and forgotten.

inside-sales-rep-skillsOutside sales reps must know how to build rapport and read their prospects’ facial expressions and body language. Inside reps must have these same skills, but they are at a disadvantage because they don’t get to meet with their prospects face-to-face. This adds another layer of required skills onto the inside sales reps, but you’ll quickly find that those who are most successful have mastered all of these skills.

Inside Sales Reps Know How to Take Advantage of Technology

Because inside sales reps have to be so multi-faceted, they have learned to rely on innovative tools that can lighten the mental load and keep things organized. Sales platform tools like Fileboard have become indispensable to inside sales reps because they provide valuable insights.

Fileboard gives reps full access to how their prospects interact with their sales presentations and collateral, as well as helps reps organize and prioritize their days based on the hottest leads. It’s tools like Fileboard that are revolutionizing the industry and allowing inside sales to flourish.