By Landon Petersen, Tom Hill, and Donncha Carroll

Remember when we all believed that face-to-face sales meetings were absolutely essential to building the trust that closes deals? Back in February 2020? Then COVID-19 arrived on our shores, changing how buyers and sellers could safely interact and giving us an unprecedented opportunity to test our historical assumptions. The field sales force as we knew it was suddenly grounded. Everyone — start-up or established, profitable or struggling — was suddenly dependent on inside sales for survival.

Even before the pandemic, however, inside sales models were growing in importance and the line between outside and inside sales was blurring. The proliferation of online information jump-started this trend. Buyers could gain access to a world wide web’s worth of data, market options, buyer experiences and company profiles, before ever speaking to a sales person. They made contact with your sales force geared away from being wooed, and ready to have tougher ROI-based discussions.

Improvements in video-conferencing also fueled inside sales initiatives. Companies began to recognize the efficiencies gained by transporting their sales teams via technology rather than airplanes. Field sales teams dramatically increased the percentage of their time spent selling remotely — from 24.1% in 2014 to 45.4% in 2017[1].

The pandemic accelerated the focus on inside sales overnight. While Xant[2] reported that inside sales grew from 43.5 percent of total sales efforts in 2017 to 45.5 percent by 2019, in 2020 almost 90 percent of sales have moved to a videoconferencing/phone/web sales model. And while some skepticism remains, according to McKinsey[3], more than 50 percent of sales teams believe these new processes are equally or more effective than the sales models used prior to COVID-19.

In a revealing June 2020 survey of CSOs by Gartner[4],  a remarkable 23 percent of CSOs reported plans to permanently shift field sales to virtual sales roles, while another 36 percent were considering it.

It’s clearly a new world. How should you be thinking about inside and outside sales in your company?

A Historical View of Inside Sales Vs. Outside Sales

In decades past, there was a clear demarcation between inside and outside (field) sales and sales teams. Inside sales involved transactions over phone, email and the web. Inside salespeople reached out to contact prospects or responded to incoming requests from the office. They didn’t travel. Outside sales were the task of different personnel who physically went out to meet face-to-face with prospects and customers.

The roles and competencies of these two sales teams were quite different. Field sales typically involved transactions with more senior buyers, more key influencers, a greater need for stakeholder management, and a more complicated sales process. Field sales teams worked on higher-value deals, with longer sales cycles and less support.

Inside sales teams handled less complex sales of lower value, involving lower-level buyers and shorter sales cycles. They dealt with a high volume of transactions in a supportive environment.

Field sales were considered the gold standard of sales models, but even before the pandemic they were feeling the pressure of a changing world. Some treasured — but potentially inefficient and problematic — field sales tactics were falling out of favor, including long lunches and deals made on the golf course. With some of their primary tools disappearing and customers depending less and less on them as a first-line source of information, field sales teams came under the scrutiny of budget-conscious leadership.

The 2020 pandemic increased that scrutiny as it spotlighted the benefits of inside sales initiatives:

  • Inside sales involves a lower compensation cost of sales (CCOS)than outside sales. CCOS is the total compensation — not including benefits or contest winnings — paid to the sales team, divided by the revenue produced by their efforts.
  • Inside sales models eliminate high travel costs.
  • When travel time decreases, significantly more time becomes available to deliver value to prospects/customers. In terms of capacity and coverage, reps can own more accounts if they can touch 20 in a day instead of 5.
  • It’s easier to leverage technology in inside sales models, because inside sales teams are more engaged with enterprise systems for information management.

Thanks to advances in communications technology, inside sales reps today can give presentations, conduct demos and perform most of the functions traditionally handled by reps in the field.

With fewer unique tools and higher associated costs, what does the future of field sales look like? Leading research company Gartner conducted a survey in mid-April, as the business world adjusted to the pandemic. When CSOs were asked to compare current returns on investment of various sales models with their anticipated strategic importance in five years, these leaders predicted relative gains in key account programs and inside sales in the future but a decline in field sales.

Flexing for the Future

It’s time to take a close look at your sales organization to determine if it is keeping pace with what your prospects need and want.

The first step is to refresh your customer decision-making map to understand how prospects’ behavior might differ now from the behavior your sales organization was designed to support. You are likely to find that buying behaviors are more digital and self-service, and that your customers today are closer to making a buying decision when your sales rep is engaged for the first time.

Understanding buying behavior will help you understand the efficiencies and advantages of each sales role within the new customer journey. What can your Key Account Managers do best? Your Field Sales team? Your Inside Sales team? And how do the competencies of each role contribute to positive results with different segments of customers?

Field sales as a role may not disappear. As we’ve noted, the competency within your field sales team is geared toward complex buying behaviors and processes, and a need for these skills is likely to remain. Does your field sales team have advantages that could justify maintaining the role shape, size and deployment? Does your field team have valuable competencies that could be deployed in a different role structure? How will compensation reflect the nature of these competencies and roles? The answers to these questions will help you shape your new sales organization.

Part of analyzing field sales’ role structure will be determining if a traveling sales force is necessary for your business. Can your team achieve the same results without the cost of travel and facetime? Can inside sales generate a comparable amount of revenue to field sales?

Once you have preliminary answers to these questions, it’s time to run a pilot program. In the modern business environment with its fast rate of change, agile competition and vulnerable profit margins, guesswork isn’t a good enough foundation for restructuring one of your most important operational areas. Use clear hypotheses to build a new model, then measure the results against current or historical controls, evaluate the wins and losses and change what isn’t working. Chances are, operating a salesforce during a pandemic has already provided you with insights into what works and what doesn’t. It’s a good opportunity to now formalize findings and continue to test and refine hypotheses.

Asking the correct questions about which sales models will best improve ROI and increase conversion is important. If you’re not sure where to start, Axiom Consulting Partners can help. Let’s chat today about your organization’s internal sales structure.

 

[1] https://blog.hubspot.com/sales/inside-vs-outside-sales

[2] https://blog.hubspot.com/sales/inside-vs-outside-sales

[3]https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-b2b-digital-inflection-point-how-sales-have-changed-during-covid-19

[4] https://blogs.gartner.com/dave-egloff/2020/04/21/enduring-impact-of-covid-19-on-field-sales/

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