Inside Sales vs Outside Sales: What's The Best Solution For Your Company?
A great debate is taking place right now about Inside Sales vs Outside Sales and which method is better. There’s certainly no definitive answer because it depends on the person you’re talking to, their prior background, previous experience, and how they prefer to sell.
Some business models may not be able to support inside sales, and are therefore forced to rely on an outside sales team. It’s more important to understand the differences between the two than it is to try and make a case for why one is better than the other.
It’s important for sales professionals to know the specifics associated with each in order determine what the best sales job is for them. Most tend to enjoy one significantly more than the other. This, in turn, often defines their level of success. For business owners, the strategy you choose could mean the difference between being profitable and experiencing a loss.
What Is Inside Sales
Investopedia defines inside sales as the sale of products or services by personnel who reach customers by phone or online, rather than by meeting them in person. Inside sales relies on the phone, email and the internet to reach customers. Often defined as “remote sales” or “virtual sales.”
What Is Outside Sales
Outside sales is the sale of products or services by sales personnel who go out into the field to meet with prospective customers, according to Investopedia. Outside sales professionals tend to work autonomously outside of a formal office and formal team environment. They often travel to meet new customers and maintain relationships of their current customers, face-to-face.
The Trend Is Shifting… Quickly
If you were to look solely at the numbers, inside sales would be beat outside sales like Mike Tyson fighting an infant. Beyond just definitions, what is the difference between inside sales and outside sales?
Thanks to the technological era we live in, one of the most noteworthy trends is the incredible rate of growth. Inside sales teams are growing at a rate 15 times faster than outside sales. This translates to 7.5% vs 0.5% annually, or essentially, 800,000 new inside sales jobs spanning from 2010 – 2013.
Additionally…
- Inbound leads cost about 61% less (or $211) compared to outbound [Inbound Seller]
- Outside sales reps spend 45% of their time selling remotely, jumping 88.4% from just three years ago in 2014 [HubSpot]
- Inside sales reps have a 9.8% higher quota attainment than outside salespeople [HubSpot]
Numbers Don’t Tell The Full Story
If you read those and quit, you’d be doing yourself an injustice. Companies utilizing outside sales strategies have a close rate that is 30.2% better than inside sales. And work deals that average to be more than 130% larger.
Tenfold also found that outside sales reps earn approximately 12 – 18% more in salary compared to their counterparts; about $15,000 annually.
You could pick apart the data for weeks, but the fact of the matter is there’s a reason for the considerable difference in growth. Despite that change, there’s still plenty of opportunity available on either side of the fence, and why you should have a firm understanding of the key differences between inside sales and outside sales.
7 Factors Highlighting the Key Differences Between Inside and Outside Sales
#1 | Sales Tools
The tools used by inside and outside sales teams differ quite a bit because of the additional technology needed by reps in the field. Outside sales teams need tools that can help them do things like build and manage territories, map routes, and monitor rep activity.
For inside sales teams, the bulk of the tools use are related to activity automation. Tools like dialers and email tracking software are much more relevant to the inside sales landscape.
Tools for Outside Sales Teams
Sales Territory Mapping: Dividing a sales territory into manageable areas within an identified area of a targeted marketplace is an effective way to assign smaller territories to sales reps and cover a larger area in less time.
Field Sales Software: Assists in effectively managing your team by establishing processes such as designing the best sales routes possible. This helps to establish two key components of success in sales – efficiency and speed. Field sales software enables you to create a dynamic plan, and with a motivated field sales team, more customers will be contacted face to face, giving your overall sales goals a boost.
Sales Rep Tracking: Improve the sales, accountability and productivity of your outside sales team by tracking their activity. Real-time knowledge backed with recorded data creates usable information to make immediate decisions to effectively manage your team
#2 | Variety & Flexibility
As previously mentioned, outside sales reps have dramatically increased their remote selling time in recent years by 45%. While it may seem like they’re just shifting more toward inside tactics, they’re actually demonstrating the unique flexibility they have to get the job done.
Outside sales takes the cake when it comes to the variety available to them to hook customers. Inside salespeople aren’t nearly as strategic. Outside techniques can include presentations, displays and samples. More or less, they use anything and everything that’s visual.
Outside sales reps also have the added responsibilities of managing their own schedule and keeping up with their own appointments. One appointment that runs long or gets canceled can throw your entire day out of whack. Additionally, your appearance in the field matters because clothing has power on those around you.
However, technology is part of the reason for the shift as inside sales teams now have the ability to do live product demos thanks to web conferencing tools, and other online strategies.
#3 | Quantity vs Quality
What is the difference between inside sales and outside sales? Many have very simply broken it down to: quantity vs. quality. Outside and field sales teams are significantly limited in the number of prospects they can touch on a daily basis, giving inside sales a huge advantage.
Inside sales doesn’t fight the challenges of logistics and travel. They can hammer calls for hours on end. Being that the price point is typically lower, inside sales teams don’t have to focus on the same level of quality as outside sales teams do. This leads to a much higher number of demos completed and “one-call closes.”
Outside selling tends to be for more expensive and complex products/services because the functionality comes with a lot more detail and intricacy. This is why they tend to meet customers face-to-face. They may have fewer meetings, but their focus on the right meetings is why they close at a rate 30% higher than inside sales.
#4 | Prospecting Challenges
Inside sales reps are generally far more prolific when it comes to prospecting. Because they’re in an office all day, their prospecting obligations are mastered much quicker. Keep in mind that because the price point is lower, more customers are able to afford it with fewer restrictions.
(Note: One of the greatest contributing factors to finding the right audience is having the right tools. This is true for both inside and outside sales teams. Prospecting will always be a time consuming task, but automation platforms like Overloop will drastically increase your productivity and help you start more conversations.)
#5 | Sales Cycles
Sales cycles are especially important for sales reps to understand. The reps who know the difference typically prefer one over the other, and are the ones who usually have a sales career vs a sales job. The reason this is so important is because certain individuals thrive in “quick-win” situations while others enjoy the relational sale.
The majority of inside sales organizations have a relatively short cycle due to fewer in-person meetings and a lower cost. The reduced cost is viewed as less risky. The lengthier sales cycle commonly associated with outside sales is often a result of the product’s high level of detail. The increased length requires a stronger and longer-lasting relationship.
It’s vital to understand that the B2B sales cycle in field sales is considerably more complex than it is for inside sales. These buyers typically never pull the trigger alone. On average, there’s 5.4 stakeholders who need to sign off on the purchase. Keep in mind that the unfortunate reality is when more people are involved in a decision, the less likely they will make a purchase.
#6 | Sales Skills
Inside sales and outside sales may have a lot of similarities, and while they’re both still “sales,” there are some key differences that define a successful rep for each category, like inside reps understanding the importance of terminology.
#7 | Compensation
It’s fairly common knowledge that outside sales is associated with a higher price tag. One reason for that is the higher base that field reps draw. The travel and lengthier sales cycles also play an important role in the higher cost.
Inside sales coming in at a lower price point isn’t just a result of lower base and no travel. The key difference is in the tools they use. They leverage an average of 11 cost-efficient technologies to streamline their processes and workflows.
Tools like Overloop have such an incredible feature set that make inside sales reps so much more efficient that companies continue to purchase more tools for their team. The cost is justified due to the increase in productivity and results.
Benefits of Inside Sales
- Lower costs
- More communication and collaboration
- Shorter sales cycle
- Higher quota attainment
Benefits of Outside Sales
- Higher close rate than inside sales
- Outside reps earn 12 – 18% more in salary
- Deal sizes are considerably larger
- Flexibility and freedom to manage your schedule and territory
Inside Sales or Outside Sales: Which is better for your business?
Determining whether inside sales or outside sales would be better for your company is a difficult decision. There are too many factors to consider for us to give you a concrete definitive answer, but the table below should help guide you in the right direction.
(Note: Click here to see how SPOTIO can take your field sales game to the next level.)
Jennette Evanco is Digital Marketing Manager at Spotio.
