What is Inside Sales and How Can it Help Your Company?

The Internet has changed the landscape of sales quite a bit in the last few decades, and perhaps most dramatically with the rise of inside selling.

The old way of selling involved a lot of face-to-face meetings and travel, and while that is still important particularly for higher-dollar products and services, a lot of companies are able to cut costs by selling their products remotely via inside sales.

And the bottom line effects can be huge. According to PointClear, the average outside sales call costs $308, while an inside sales call costs just $50.

But is it right for your business? Here’s what you need to know about inside sales.

At a glance: How inside sales work

• You make first contact with the customer, perhaps through your website or by reaching out via email.
• You call back to discuss the customer's needs and how you might be able to help.
• You send a follow-up email or make a call to gauge interest.
• You propose a demo or meeting, during which you will attempt to close.

What are inside sales?

Inside sales refer to sales that are made entirely remotely without any in-person meeting.

These sales can be made either via phone, email, or on a website. Inside sales may involve a slightly different process than a typical sales pipeline, but it will generally follow the same format.

Inside sales are attractive because they have less overhead and can result in more efficiency, but companies that use this strategy have a lower conversion rate and may have problems with customer retention.

Inside sales vs. outside sales: What’s the difference?

Outside sales is known as the traditional way of selling, which involves traveling and making face-to-face contact with clients.

Inside sales typically has a lot less overhead, and so companies often opt to downsize in terms of outside sales in order to save money. However, outside sales still has advantages over inside sales, particularly when it comes to higher-ticket products and services that require much more personal contact and trust-building on the part of the seller.

Who could benefit from using inside sales?

Does it make sense to abandon outside sales and go entirely remote? That depends on a number of factors. Here are a few situations where you should consider making the switch.

Your company sells low-value products and services

Inside sales are a lot more effective when you are dealing with consumer goods as opposed to high-dollar information technology (IT) service contracts worth in the hundreds of thousands of dollars, for example.

If you have a product that most people buy online, an inside sales strategy probably makes the most sense.

Your company needs to cut sales overhead

Even if you can’t do away with outside sales entirely, you may consider boosting the amount of inside sales work if you are struggling with overhead costs for sales travel and other expenses.

Your company is looking to increase sales efficiency

Because an inside sales representative doesn’t have to travel, he or she has more time for prospecting and making calls, and therefore can be more efficient with time. However, a lack of face-to-face time can result in a lower conversion and retention rate.

You may want to consider a pilot program first where some of your salespeople transition to inside sales and some continue doing outside sales.

How to establish and maintain an inside sales team

If you’re pretty sure you want to launch an inside sales team, you’ll need to create a pilot program so you can test how it works with your company. Whether you are in B2B sales or direct to consumer, there are four simple steps you can take right away.

1. Have a complete understanding of how your outside sales team is performing

In order to know whether your pilot program is a success, you’ll need to have something to compare it to. You must track the performance of your sales team, from how many customers they prospect to what their conversion rate is.

Examples of tracking your outside sales team

• If you don’t have a Customer Relationship Management (CRM) solution that can track important sales metrics and generate custom reports, get one.
• Choose a period of time to track so that you can have an apples-to-apples comparison. A quarter is generally a good time frame.
• Set a date when you’ll get the outside and inside sales teams together and compare notes.

2. Identify key metrics you'll track

Every business is different, which means your internal sales priorities will be unique to you.

Maybe you want to increase the conversion rate, or maybe you think the rate is fine but you want to boost overall sales revenue. Choose as many metrics as you think might be informative. After all, you can never have too much information.

Examples of metrics to track

• Conversation rate
• Total sales revenue
• Average sale price
• Total prospects contacted
• Average overhead per sale

3. Set realistic goals

A good salesman needs some goals, and those goals need to be attainable.

You should expect that your inside sales team may see a dip in conversion rate, and perhaps a reduction in average sale price, for example. Take all of this into account when setting your goals.

Examples of realistic goals

• Inside sales team achieves 80 percent of outside sales team conversion rate
• Inside sales team sells products at 70 percent of average sale price of outside sales team
• Inside sales team contacts 40 percent more prospects than outside sales team

4. Establish your sales process

Your team will need a sales process that guides them from prospecting all the way to the close.

It may be exactly the same as the outside sales process, or it may require some tweaks due to acquiring prospects differently, through the website rather than via cold-calling, for example.

What revamping your sales process looks like

• Have a sit-down with the outside sales team to determine whether the sales process needs modification for inside sales.
• Go over those changes with your inside sales team and see if they have any ideas.
• Set up weekly check-ins with the inside sales team to determine if the sales process is working for them. If not, continue tweaking it until it does.

Should you use a CRM to help with inside sales?

A CRM software solution is vital to a fledgling inside sales team which must be organized from the outset in order to be effective.

If you don’t have one in place, you need to start trying out different solutions to find one that can effectively track key metrics and create a custom report that you can study after the pilot program.

You should use this report to first see how much you cut overhead, and then compare it to the revenue you brought in to find out if you are actually saving money overall or if a sales dip is totally negating those savings.

Start an inside sales pilot now

Since you’re probably already in the sales business, it should be pretty simple to start a pilot program to determine the effectiveness of inside sales compared to outside sales for your business. Get a software solution in place that can track your two teams and then get to work adapting your current sales process for it.

Perhaps even make it a fun competition between the two teams. Either way, an inside sales pilot could lead to instant savings and therefore more profitability for your company, and it should be explored right away if you suspect it could help your business.