Here’s What You Need To Know About The Inside Sales and Outside Sales Roles

The outfield, in cricket and baseball, is the area in the field of play furthest from the batsman or batter relative to their counterparts playing infield. In soccer, the outfield players are positioned outside the goal area. As companies seek to grow their sales numbers it’s not always clear which sales approach to take. “Inside sales vs. outside sales?”. We know this debate doesn’t rise to the level of the MJ vs. Kobe vs. LeBron comparisons you’ve likely argued at one point or another, but sales is a competitive environment and we liked the challenge of shedding some light on the debate based on our observations. So here’s a few things we found…

According to statistics found online, the Bureau of Labor Statistics reports 14,542,290 people are in sales and sales-related occupations. This means about 4.43% of the population is in sales. This overall number also included retail sales positions, so, it was very interesting to look at data subsets as well.

Sales Representatives, Services – 2,046,120 ppl.

Sales Representatives, Wholesale and Manufacturing – 1,663,160 ppl.

Advertising, Marketing, Promotions, Public Relations, and Sales Managers – 717,220 ppl.

Other Sales and Related  – 616,650 ppl.

The proportion of Inside sales professionals is about 48%, and Outside sales professionals account for 52% of the total US labor force.*

There are some who would contend that sales is sales and there are no differences to the process and/or methodology that should be applied to the role. That may be true at the highest level but we want to get a bit more detailed for this comparison. With that in mind, we look at the roles with the following delineation between disciplines. Inside sales means the sale of products or services by personnel who reach customers through phone, email, or the internet. Other ways to define inside sales are “remote sales” or “virtual sales.” Outside sales refers to the sale of products or services by sales personnel who go out into the field to meet with prospective customers. Outside sales professionals tend to work autonomously outside a formal office and formal team environment. They often travel to meet customers face-to-face, as well as to maintain relationships with existing customers at their place of business or interacting at networking events, trade shows and conferences. Travel could take up to between 40-50% of their time daily.**

Inside Sales Reps

Inside sales reps typically leverage tools like phone calls, social media, email campaigns, video conferences, and virtual webinars to connect with potential customers. In most cases they don’t meet with prospects face-to-face. They will often have a target number of tasks they should accomplish each day, such as number of outbound calls, sales meetings booked, sales proposals sent, etc. In this comparison we are not breaking out the role of SDR, although they would also fall into this category. In most cases, inside sales reps should need to have the ability to explain the value of their product to customers over phone or a webinar presentation, and if need be the functionality as well. Many inside sales, but not all, have a transactional approach. Within the companies who sell in this way, you might not be surprised to find a sales floor with divisions that target varying segments based on product or service types. It’s all inside sales.

Transactional Sales

The seller tries to close a deal without attempting to form a relationship

Small number of decision-makers (1-3)

Fast sales cycle (<90 days)

Small deal sizes (under $35,000)

Outside Sales Reps

Outside sales reps spend almost half their time (45.4%) selling in the field. This type of sales position is typically done by people who manage their own schedules and work independently. The objectives and tools of outside sellers are not entirely different to inside sales, however, due to many additional variables that go into the day to day operations and workflow of inside sales  vs outside sales reps, there are more data points to account for when determining sales projections. For example, travel logistics, visit and meeting dynamics, weather, and other statistical attributes all play a large part of an outside sales person’s day to day performance. In many cases, outside sales reps are also responsible for a portion of the direct marketing done by companies who sell this way and tend to rely more on relationship selling. Moreover, because of their proximity to individual territory markets, they serve as front line info gatherers  as it pertains to specific territory buying patterns. This information is useful for sales and marketing decision makers who are likely working from a distance.

Outside sales teams often find their time in transit and location are now being tracked by the same technology they use to record information tied to customer touchpoints conducted outside of the office. In addition, they might sell at industry events, conferences, speaking engagements, as well as channel partner locations. It’s all Outside sales.

Relational Sales 

Suited for companies with a large number of employees (<100)

Build rapport with a large number of decision-makers (4+)

Slow sales cycles (>90 days)

Larger deal sizes (over $35,000)

Inside Sales vs. Outside Sales – General Stats

Online data shows large organizations with revenue > $500M are largely using outside sales reps (71.2%). Small organizations with revenue <$50M have the highest percentage of inside sales reps (47%).*** There is some debate on this breakdown when applied to specific industries however. An example is the Tech Industry, where small start ups or disruptors will have an inside sales model that can focus on Enterprise size engagements, which are relational by nature and use automation for smaller transactional deals.

The sales profession is hard work and not everyone has the demeanor or skill set to do exceptionally well in sales. Surveys show Inside sales reps make 43% more calls, left 10% more voicemails and sent 9% more emails than organizations with primarily outside sales reps. They also focused more on social media, with 49% more social posts than outside sales reps. If you focus on transactional sales this is some good news for you. Overall, companies with sales teams dominated by inside sales reps have a higher quota attainment than companies dominated by outside sales reps.

But, there are other things to consider. What is the client retention average? Do transactional sales make for long term clients? Some things to consider are that companies who have a majority of outside sales reps have a 30% higher close rate than companies who have a majority of inside sales reps. Also, on average, outside sales tend to be 130% bigger on average than those worked by inside sales teams. If we agree that only 61% of reps reach quota attainment each year, as most studies will show, an interesting statistic is that outside sales reps have a 30% higher quota on average vs. inside sales reps. It is fair to say that transactional sales, with low-value deals and fast sales cycles, lend themselves to an inside sales team. Relational sales, with high-value deals and long sales cycles, will benefit from having outside sellers on your team.

Inside Sales vs. Outside Sales – Salary Comparison

Job satisfaction is important to note as the sales profession can tend to be transient in terms of talent. To retain top talent, companies need to pay market value for salespeople. The average base salary for inside sales account executives in the US is $42,833 with average on-target earnings (OTE) of $96,299. That data also shows the majority of outside sales reps had a base salary that was 36% higher than inside sales. It is worth noting here as well that the OTE for outside sales was only 9% higher. OTE should be an indicator of expected earnings, so inside sales positions actually earn relatively close to the same amount as outside sales.****

Ask yourself, is your business transactional or do you want to have long term clients? When choosing which sales organizational structure works best for you, you should always keep in mind the most important role in the evaluation, that of your customer. How do your customers prefer to be contacted? How do they allow you to close a deal? Can you close a $1m deal over the phone? Only your customer can decide that. The buyer of today is becoming more digitally savvy. As they’re purchasing more goods for personal use on Amazon and other websites, they will more and more often expect a similar set of touch points in the B2B sales process as well. It is important that companies examine the risks and benefits from each type of sales team. It can be argued that it is best to support an inside and outside sales collaboration for increased chance to reach sales targets. There really is no right or wrong answer when it comes to inside and outside sales.

This comparison is just highlighting some empirical data to draw a contrast between the two types of sales teams. Companies are trying different models, testing different organizational structures and making sure they find the right fit for their product, buyer, and market. Finally, when examining the inside sales vs. outside sales route, it is also important to note that the structure of your sales team will also go a long way to defining your corporate culture as a whole.

 

* Statistics curated from the bureau of labor statistics BLS.GOV

** We used the definitions outlined at https://www.investopedia.com

***Statistics found on the State of Sales report www.insidesales.com

**** Salary information found on www.salary.com