April 27, 2021
Selling more while spending less compared to field sales sounds great, but it is much easier said than done.
In recent years, inside sales has emerged as a highly profitable channel for distributors. “When appropriately utilized, inside sales reduces cost of sales by 40–90 percent relative to field sales, while revenues may be maintained or even grown,” according to the Harvard Business Review.
Selling more while spending less sounds great, but it is much easier said than done.
Over the past few years, the number of inside sales reps has increased by a few percentage points while the number of outside sales reps has decreased by a similar margin. At the same time, outside reps have seen a significant increase in remote selling time. Together, this suggests that some companies may be transitioning outside reps to inside roles instead of hiring new reps.
While this may seem convenient, distributors should avoid this trap. According to HubSpot, the average inside sales rep has a base salary of $42,833 with average on-target earnings of $96,299. The average outside sales rep, in contrast, has a 36 percent higher base salary, with a 9 percent higher earnings target. In short, paying outside reps to do inside jobs is unnecessarily expensive and likely ineffective.
Likewise, distributors should not convert customer service reps into inside sales reps. To perform the inside sales role well, employees must excel at proactive digital communication, workflow management, and strategic account growth. Instead of converting telesales workers or outside sales reps, distributors should start by hiring a small inside sales team of three to five sales reps.
AI helps inside reps win within sales calls, between sales calls, and across different sales channels. Here is how it works.
AI sales tools use data from previous customer interactions to predict what items customers are most likely to buy and when. This means that within each call, AI-equipped inside sales reps can sell more with data-driven upsells, cross-sells, and add-on recommendations.
AI also helps inside sales reps in between calls by optimizing employee workflow. Instead of calling accounts on fixed intervals, the AI-empowered rep will call each account when they are primed to buy, due for reordering, or at churn risk. This ensures that reps only spend time chasing sales opportunities that they can actually win. Plus, this type of automated workflow management frees reps up to spend less time planning and more time selling.
Finally, AI enhances rep performance by coordinating information across channels. AI-based customer data platforms use data from multiple sales channels to make the kind of product recommendations and workflow decisions discussed above. Plus, they also coordinate activity across channels. This means that your inside sales reps can hand accounts off to outside reps when the time is right, and personalize customer experiences based on activity from other channels.
Hiring good employees and using the right tools is a must. But, to truly maximize performance, reps should also be put through several rounds of training.
Reps must be familiar with their product catalogs, customer base, and sales tools. However, reps also need to understand value propositions and pricing, market segments, and how to approach different buyer personas.
Debbie Paul, a senior partner at Distribution Strategy Group, describes moving new reps through multiple training phases, including video chat for a few structured sessions that combine content learning and sales role play followed by in-person follow-up sessions to learn about AI sales tools, effective selling techniques, and workflow management skills.
With the right instruction, reps can learn how to score their own activity and coach themselves into better performance. This mix of formal training and on-the-job learning helps reps will drive immediate returns and long-term growth.
When your small sales team is profitably up and running, expand the channel to drive further growth with experimentation and process-oriented behavior.
A benefit to starting small is being able to try new things and occasionally fail, learning and innovating over time. Each company will have different needs; some will find that it's best to have inside sales grow small accounts and then pass them off to outside sales. Others will find that it's better to forge partnerships between inside and outside sales.
Once you figure out what works, focus on growing your team. Building and investing in efficient, AI-supported sales teams is the future of distribution.