Traditionally, inside sales only involved those made over the telephone — telesales. But thanks to the Internet, inside sales now encompass those made via Skype, email, or any other cyber-communication methodology – as long as the salesperson is working from behind a desk. Forbes contributor Ken Krogue provides an updated term for it: remote sales.
Outside sales, meanwhile, are the exact opposite. The Department of Labor considers an employee an ‘outside salesperson’ if he or she makes sales outside the office, usually through face-to-face meetups with clients.
According to SalesLoft, inside sales are growing 15 times faster than outside sales, mostly due to convenience. That’s 7.5% annual growth versus outside sales’ 5%. However, outside sales reps earn 12 to 18% more than inside sales reps, with field reps’ salaries topping $65,000 a year compared to inside sales reps’ $50,000.
Here are some of the primary differences between the two:
Since outside sales are essentially conducted during face to face interactions, they have the upper hand when it comes to the variety of business methods employed to entice customers. To quote a Harvard Business Review study: “Field sales are more strategic, meeting with C-level executives and developing strategic business innovation to help them grow their business versus inside which is more quantity and not as in-depth the majority of the time.”
Examples of strategies used by outside sales representatives include presentations, displays, and providing samples. These things work well for them; visual elements are processed 60,000 times faster than text, according to HubSpot.
But inside sales are rapidly catching up. Web conferencing allows inside sales reps to demonstrate their products without the need to meet the client personally. Other strategies involve social media, hosted CRM, screen shares, and integrated telephony tools. There are also low-cost and user-friendly Software-as-a-Service tools that have boosted inside sales and made them more cost-effective.
Quantity vs. Quality
Inside sales vs. outside sales can be likened to quantity vs. quality. Since inside sales representatives do most of their selling from behind a computer screen, they have the ability to pitch their product or service to a huge number of people every single day. They also don’t have to worry about travel impacting the time they have at their disposal, allowing them to maintain the number of people they can reach out to during office hours. This is not to say they only land lower quality customers, but rather that their sales cannot be classified as big-ticket purchases. More often than not, orders are for smaller quantities than sales made via outside sales.
Outside sales focus more on complex quality products and services they can sell for a steeper price. That’s why field reps prefer to meet their clients face to face to explain the intricate functionalities of what they’re selling and make sure the potential buyer understands them. Outside sales reps may reach fewer customers, but they are likely to be very well-targeted ones.
Sales cycles are naturally shorter for inside salespeople because of the lesser likelihood of face-to-face interaction. But since the focus of field representatives is on volume, their cycles tend to be longer and more complicated. Inevitably, outside salespeople are likely to foster stronger and longer-lasting relationships with their clients.
Outside sales can be intense; reps often have a lot of preparatory work to do. For example, selling in retail locations means outside reps have to visit the store, set up product displays, and ensure they have a constant supply of products in stock. However, research shows that field reps are able to convert prospects into clients 40% of the time compared to inside reps who only convert prospects 18% of the time.
Skills and Qualifications
Outside sales are best-suited to people who like working independently and managing their own schedule, as they set their own appointments with prospective clients. They should also be able to adapt to new people and environments easily, as they’re always visiting new prospects and doing a great deal of traveling. Since they meet clients face-to-face, field reps are required to look their best and be at their best, even when they’re not much in the mood.
As for inside sales representatives, they need to have a way with words. Because they don’t usually have the means to demonstrate a product or service live, they should be articulate enough to explain the item in an engaging manner that attracts potential buyers. Collaboration with peers is also common among inside salespeople as they work in an office. Inside sales reps should also be able to perform all associated administrative tasks within the workplace.
Outside sales tend to be the more costly of the two since field reps command higher base salaries. They also travel a lot, which adds to incidental costs and might create work inefficiencies.
On the other hand, inside sales reps leverage cost-efficient technologies like web conferencing platforms, CRM databases, and analytics software to reduce the cost per acquisition.
Inside salespeople also have fixed working hours and schedules, giving them a stable salary that’s easy to anticipate every month. Field reps are often paid on a commission basis, making it harder for the company to predict overheads and revenue.
Though these two sales strategies are opposites, they’re two sides of the same coin. In fact, the traditional divide between the two is slowly disappearing, with many companies adopting a hybrid form of inside and outside sales. For instance, salespeople may call from their company’s office and then travel to client locations to complete a deal. In fact, current research shows that outside sales reps are spending almost half of their work day selling remotely.
But even if the lines between inside and outside sales are blurring, it’s important to understand the distinction so that companies can decide which technique — if not both — would work out best for them.