Successful startups pride themselves with the fact that everyone wears a lot of different hats. You’ll have sales leaders helping close deals. You’ll have outside salespeople prospecting or inside sales people helping close deals.
However, when trying to scale, companies often need to specialize roles. This is to make sure that they gain operational efficiency. Inside sales and outside sales roles have very different responsibilities. Let’s take a look at the two: inside sales vs outside sales, and see how they square up.
Let’s start with inside sales, as the rising stars in most sales organizations.
Inside sales roles are extremely popular in B2B sales. There are a few reasons for this. First, most inside sales jobs are typically advertised as entry-level jobs and thus don’t have a high compensation attached to them. Inside sales is a great opportunity for recent grads to learn a specific business, gain experience and provide value to a company at a very low cost. It’s also a good opportunity for sales managers to scale their team at a lower cost.
Inside salespeople are responsible for finding new opportunities. In the B2B world that typically means using different communication methods to try and set up new opportunities. This is called prospecting:
- Social media
- Instant messaging
- Direct mail
Recent data shows that emails and calls are the most common ways that sales reps use to reach out to prospects. Make no mistake, this is a hard job: it takes an average of 18 calls to connect with just one prospect.
The inside sales team reaches out to both cold and warm prospects. In B2B sales motions, they will often have a free download or other offers for interested prospects. When someone engages, they typically bring in an outside salesperson to run the call or meeting and deliver the value prop for the company. This is called a hand-off process, and there are volumes that have been written about how to conduct a proper lead hand-off.
Inside Sales Compensation
Inside sales reps often have a base salary plus some type of bonus or commission based on the number of meetings they set. In the world of enterprise B2B sales, sales teams organization structure separates inside and outside sales.
In most enterprise companies in the USA, the average salary for inside sales is $40-50K per year. Here’s the kicker: if that inside salesperson is finding 10 new opportunities each month, they have paid for themselves. Especially in B2B sales, where average deal size is in the tens of thousands of dollars, a good inside sales rep is very valuable.
The most important aspect of inside sales is they allow outside sales reps to focus 100% on closing. Having an inside sales team increases the retention for your outside sales team. Good outside salespeople typically enjoy closing deals. They love it when they have an inside salesperson regularly bring them qualified new opportunities.
Sales team organization structure doesn’t always allow for a separation between inside sales and outside sales. In our experience, the best companies have somewhat blurry lines between inside sales and outside sales.
Outside sales aren’t 100% responsible for prospecting, but they are involved in the process and guide inside sales on where to focus. The best inside salespeople have many of the same attributes as outside salespeople and if needed, can even run a meeting on their own.
Outside sales teams typically close sales, that’s their core responsiblity. They will take part in actions such as:
- Field events
- Speaking events
- Industry trade shows
You can generally find them traveling around their territory to meet prospects. Typically they will have responsibility of a specific region, industry, or target market.
Outside sales are also sometimes called “field sales.” They will take a prospect all the way through the buyer journey, from initial call all the way through closing the contract. They will own the closing strategy and make sure the customer is happy up until product use or implementation.
It’s common that outside sales representatives are veterans who have been doing sales for a while. This is especially true in a B2B sales organization. The more complex the sale is, typically the more experienced the outside sales team will be. They need to master selling techniques such as:
- Building rapport
- Sales pitching, or elevator pitch
Outside Sales Compensation
There is quite a range of compensation for outside sales jobs. In the US, there are outside sales jobs that have zero base pay, and require no industry experience. But there are also enterprise sales jobs with a $175,000/year salary that require 10+ years of experience in that specific industry.
The responsibilities of an outside salesperson vary quite a bit as well. Some are only responsible for closing deals. Other outside salespeople are responsible for finding deals, as well as closing them.
As a B2B sales organization gets larger, it needs to start differentiating roles (inside sales vs. outside sales). There is not a lot of hard data on how much this type of sales organization structure improves revenue. It does however, create some unique problems for sales managers and sales enablement pros. This is because the two teams have different performance metrics and different training.
Do You Need an Inside Sales vs. Outside Sales Team?
Inside sales vs outside sales is an important decision that sales leaders need to make when building their sales teams. Sales organization structure has long been as simple as hiring a handful of veterans and relying on their book of sales to make revenue. Once their contacts are all dried up and they don’t make quota, you move onto the next one. But this model no longer works, and as with every drastic change, you can blame it on the Internet.
As a company grows in revenue, the structure of the sales organization has to change to accommodate all types of customer preferences. Modern buyers will often rely on digital communication channels. They will do their own research as to what solution they need and what company they prefer.
Here’s just a few eye-opening stats:
- 75% of B2B customers say buying from a website is more convenient than buying from a sales representative (Forrester)
- 87% of customers now begin product searches online (Salesforce)
- The average number of customer stakeholders for a B2B deal is 6.8 (Brent Adamson, the Challenger Sale)
Due to these drastic changes in the way people buy, sales leaders found themselves running different sales models. In a transactional sales model (or high velocity sales), salespeople are just pounding the phones trying to make as many calls as possible. In relational sales (the model fit for B2B organizations), you need a more targeted approach.
Gabe Larsen, VP of InsideSales.com, shows that companies usually choose one model or the other based on a few factors. This includes how pricey your product is and/or how long the sales cycle is.
Inside Sales vs. Outside Sales: Short Recap
Let’s recap the main differences between inside sales and outside sales:
|Outside Sales||Inside Sales|
|Sells primarily face-to-face||Typically sells remotely or is only responsible for prospecting|
|Attends trade shows, conferences, speaking events and industry events||Reaches out via phone calls, text, email, video, social media, attends virtual meetings|
|Performs live demos of products/services||Performs virtual/remote demos or only books meetings|
|Experience needed, 36% higher base salary||Entry level, low base salary|
Data shows that inside sales teams are growing at a pace 300 percent stronger than traditional or outside sales. That doesn’t necessarily mean it will work for you, your product, your market or organization.
At OutboundView, we’ve seen all different types of sales org setups that have worked. If you would like to talk sales structure, or the best way to organize your sales team, don’t hesitate to contact us.