In 2020, most B2B sales reps use phone calls or emails to connect with their prospects.
Is that really the best way to sell your solution, though? Or are you missing out on potential sales you could have closed if you’d met with the prospect in person?
The answers to these questions depend on your solution, target market, and other business specifications.
In this post, we will give you all the information you need about the differences between inside and outside sales. Then, with this knowledge, you can decide which to implement.
What is Inside Sales
The term “inside sales” refers to the act of selling a product or service virtually from a remote location.
Inside sales reps use video meetings, phone calls, emails, and social media to contact prospects and guide them through the sales process.
In the end, these inside reps can sign on new customers without ever meeting them face to face.
Common Misconceptions About Inside Sales
When people think of an inside sales team, they often think of a bunch of confident, fast-talking professionals dressed in suits pacing around a sales floor while enthusiastically speaking promises into their headsets. Gongs ring when sales are made, and fists slam when they are lost.
While that might be true in some industries or company cultures, the best inside sales teams consist of quick-thinking, calm listeners who ask their prospects the right questions.
In fact, the most effective reps ask 11-14 questions during their discovery calls with a prospect. The best reps aren’t shouting promises, but learning about their customers’ needs, intent on finding the best way to help.
And unlike what you see in the movies, those first calls or demos with prospects hardly ever end in closed deals. As many as 80% of sales require 5 follow-up calls after the initial meeting.
The number is so high because the inside sales rep still has to handle objections, talk pricing, and make sure the other decision-makers are on board with the purchase.
What is Outside Sales
“Outside sales” is the process of selling products or services in-person.
Outside sales reps are often referred to as “field reps” because they go out into the field to sell, shaking hands, and running meetings.
These outside sales meetings can take place in the prospect’s office, a favorite restaurant, or the golf course.
Since traveling to a meeting is such a time commitment for the sales rep, the leads they meet with are usually very qualified and already considering a purchase.
In other words, before the meeting takes place, the prospect probably already knows the pain they need to solve. They have also most likely researched the solution and just need a sales rep to help them make their decision.
When outside reps take this consultative approach, they are able to form better relationships with prospects than their inside sales counterparts. There is just something special about meeting in person and being able to look each other in the eyes before signing the deal.
Establishing strong relationships often leads to more pay for the outside rep down the line, in the form of upsells and referrals.
Common Misconceptions About Outside Sales
Hollywood loves to paint outside sales reps as business world rockstars. They roll up in fancy cars or private jets to beautiful cities to run big meetings.
Yes, managers might bestow these luxuries upon their most experienced outside reps that close high-ticket deals. But, for the most part, the outside rep is going to be driving around in an economy company car and flying commercial.
Of course, if you work hard enough and continue moving up, you can certainly attain that glamorous work-life.
Inside Sales Vs. Outside Sales: Key Differences
Aside from the different locations from which they sell, there are other key differences between outside and inside sales teams.
- Sales Cycles: Inside sales tends to have shorter sales cycles than outside sales.
- Sales Process: Inside sales processes are more well-defined and can be used to sell each prospect in the pipeline.
- Scalability: It is easier to scale an inside sales team than an outside sales team. Inside sales reps also tend to speak with more prospects than outside reps.
- Close Rate: Outside sales reps boast higher close rates. Companies with a majority of outside sales reps see 30.2% higher close rates than companies with more inside sales reps.
- Cost: Outside sales reps are more expensive than inside sales reps due to transportation costs.
- Average Deal Size: Outside sales reps work deals that are on average 130% larger than those of their inside counterparts.
Sales Team Structures
Right now, inside sales teams are growing 15x faster than outside teams.
That’s because software companies are popping up everywhere. The digitalization of their products allows them to show their solutions to clients in a virtual environment.
Therefore, it makes sense for them to hire inside reps that can run virtual demos for any business in their niche, regardless of location.
On the other hand, if your company sells tire parts to an automotive maker, you probably would invest in an outside sales team since it helps to show the tire parts in-person.
But, the type of product you sell shouldn’t completely dictate which structure you pick for your sales team.
Even when companies sell solutions that are easy to demo online, they still might like to have some outside reps.
Many B2B companies, especially SaaS brands, use a hybrid structure that includes both outside and inside sales reps.
In this hybrid structure, the inside sales reps usually manage the smaller leads while the outside reps meet with larger, more profitable leads.
If you adopt this hybrid method, you have the wide-ranging touch to sell to any company in the world, while maintaining the ability to make face-to-face connections with your most important leads.
A Note on Specialization
If you do use a hybrid method, try to assign your sales team members to different groups with specific daily goals and actions.
That way, these reps can focus on mastering their position in the sales structure—something Aaron Ross, author of Predictable Revenue exhorts.
“I’m also a big believer in the need to specialize, specialize, specialize! You have to have everyone focus…”Aaron Ross, Predictable Revenue
For instance, let’s say you have a group of sales development reps (SDRs) who only focus on booking meetings. Or you could even take it a step further and divide your SDR team in half.
Half of them book meetings for your inside sales reps, while the others prospect enterprise clients and set meetings for your outside reps.
Meanwhile, your Account Executives (closers) can be either inside or outside sales reps, mastering the craft of telephone or in-person communication.
Also, if you have a smaller sales team, it is a good idea to let your reps make the decisions on whether to hold the meeting in-person or remotely. They know the relationship best.
Sales Cycle Length
Thanks to a structured and repeatable process, the inside sales cycle length tends to be shorter. Reps know the exact steps they need to take to qualify, sell, and close every single prospect.
However, there is more to the sales process than mere replicability.
Another potential reason why the sales cycle is shorter lies in the fact that most companies use inside sales reps to sell their more transactional products—products that aren’t overly complicated to explain or implement.
Meanwhile, outside reps usually sell more complicated products with higher price points to larger companies.
Since the price points are higher, the implementation processes will be more laborious, so the sales cycles tend to drag on.
It’s easier to buy a new bike pump than a new bike.
The sales cycle length has more to do with the solution’s price and complexity than it does with the physical distance between the sales rep and the buyer.
For example, if you are selling a $500/month martech solution to a 25-person startup, the sales cycle is bound to be shorter than if you were selling a $10,000/month cybersecurity software to a Fortune 500 company.
The higher the price, the more trust needs to be built, which means a longer sales cycle.
The Sales Process
The sales processes look a little different for each type of sales rep. Let’s go over the key actions in both inside and outside sales processes.
Inside Sales Process
The daily actions of an inside sales rep are contingent upon their position in the company. Usually, different reps take on different parts of the sales process.
A Business Development Representative might generate new opportunities or respond to inbound demo requests, while the Account Executive guides the prospects through the rest of the sales process until the close (or upsell).
Here are some common actions taken by inside sales reps.
- Research accounts.
- Cold call best-fit accounts.
- Send emails to cold prospects.
- Re-engage leads that went cold.
- Lead discovery calls to learn more about a prospect’s business needs.
- Host web-demos or virtual presentations for interested prospects.
- Respond to inbound sales questions.
- Update CRMs.
- Strategize on how to close an account.
- Attend meetings to go over sales metrics.
As you can see, the inside sales process requires a great deal of digital competence.
Outside Sales Process
The sales process for an outside sales rep is not that different. Research, prospecting, discovery, presenting and closing still constitute essential elements in the process.
The main difference has to do with the extent of the sales rep’s participation.
Unlike inside sales reps, outside reps will usually take control of the entire sales process.
They will probably even manage the client after the sale is made since the relationship is so strong.
Outside reps also spend less time prospecting for new opportunities than inside sales reps. That’s because they can’t afford to have too many meetings. Their schedule is tightened by time and distance.
Here are some common actions taken by outside sales reps:
- Respond to inbound inquiries
- Host discovery calls to heavily qualify new prospects.
- Travel to different locations.
- Strategize on how to close current deals.
- Read up on industry trends to have better client conversations.
- Host in-person presentations or product demonstrations.
- Meet different members of the company’s team in-person.
So, outside reps put most of their effort into the later stages of the sales process (the in-person meetings). Since they have fewer chances to persuade their clients, they also tend to allocate more time to planning and strategizing for each meeting.
Inside sales reps close deals over the phone or email. That message saying “just signed the contract” could come at the end of a sales call or after your seventh follow-up email.
Earning that close usually takes a lot of communication with the prospect.
Prospects will usually have a lot of questions and objections before you are finally able to close the sale.
As an inside sales rep, you need to be prepared to deal with common objections and reassure the prospect that buying this is the right choice. You also need to be well-versed on your competitive differentiators.
This back-and-forth close differs slightly from the closing process in outside sales, where reps can sometimes close new business in just one long meeting.
Outside reps know that if they fail to close the deal while face-to-face, their chances drop dramatically.
“We have to discuss this with our partners,” isn’t something they want to hear.
That is why outside reps try to arrange meetings where all of the decision-makers will be present to pose their questions and objections.
On average, outside sales reps are more expensive than inside reps, who have 40%-90% lower customer acquisition costs.
That means they can close a qualified lead with fewer resources than an outside rep. They really just need a computer, wifi, and some software platforms.
Meanwhile, an outside sales rep needs all of that plus funds for transportation, fancy dinners, and hotel rooms.
Of course, there could be some hidden costs that come with an inside sales team, such as time spent managing the individuals in the office.
Since outside reps tend to be more experienced, they don’t require as much hand-holding and training as the inside reps.
For the most part, however, an inside sales team is cheaper.
Scalability (Team and Sales)
The process of inside sales naturally lends itself to scalability. These inside teams can sell to any customer in the world that fits their ideal customer profile.
For example, an accounting firm located in NYC that targets small business owners can sell to any small business across the country.
If they want to ramp up sales, they can just hire more sales reps. The reps then operate from the company’s HQ, a satellite office, or their home.
Scaling an outside sales team is a lot more difficult. If you want to expand your territory into a certain area, you need to find a local outside rep, or else transportation costs will be too high.
For instance, you wouldn’t want to hire an outside rep from Los Angeles if you plan to target the Northwestern cities.
However, if the rep from LA was perfect for the job, you could hire them as a remote inside sales rep who would call into the Northwest region. It’s much easier to grow an inside sales team.
Scaling Your Sales
Inside sales teams are capable of creating substantially more opportunities and closing a lot more deals than outside sales teams.
That’s because inside reps can accomplish amazing feats like sending 100 personalized emails in a day or holding 25 web-demos in a week.
Meanwhile, the outside rep usually only attends a couple of meetings a day. Since so much of that time is lost in travel, they won’t be able to prospect so many new opportunities.
If you are looking to sign on 100 new clients, inside sales is probably the way to go. If you are looking to sign on a few large clients, consider hiring some new outside reps.
Skills and Qualifications
Both inside and outside sales reps are clear communicators, masterful listeners, and soldiers of persistence.
Most inside salespeople could succeed at in-person meetings and most outside reps would do wonderfully on a phone call.
That said, there are a couple of skills that are specific to each type of sales.
For one, inside sales reps need to be skilled in virtual communication. They need to understand how to write good emails, connect with a prospect through social networking, and run a quality web-demo.
The last one can be especially difficult since the prospect is more likely to lose interest in a virtual meeting than when face to face.
Therefore, inside sales reps need to cultivate a sixth sense to tell when a prospect is growing impatient or bored, while outside reps can usually pick up on the body language in the room.
If you are a sales professional trying to decide which type of sales career to pursue, you probably want to learn a bit about the lifestyle differences between the two types of sales.
Inside sales reps usually spend most of their workday in an office (or at home) talking with prospects. They are more stationary than an outside rep and spend more time selling.
Outside sales reps, on the other hand, have less time for direct selling, since they spend a lot of their days traveling from meeting to meeting.
For the adventurer, this could seem like a dream. You travel to different cities, meet interesting people, and try out different hotel beds (exciting!).
Since this lifestyle is better before you have family responsibilities, some reps think it best to take an outside sales job as a young professional.
But, that approach can have its drawbacks, according to sales expert Ken Sundheim.
For one, you will lack the experience of immersing yourself in a company culture, where a lot of learning happens. Plus, chances of promotion are usually lower in that field because you don’t form close relationships with your peers and superiors.
Additionally, Sundheim states that outside reps are usually the first to be cut in a layoff simply because managers would rather lay off someone over the phone than face to face.
The Benefits of Going Into Outside Sales
If you think these drawbacks are insignificant, and you pride yourself on being a lone wolf, then go ahead and start out in outside sales. It is not without its benefits.
You learn self-reliance, become skilled at conducting in-person meetings, and managing your time. These are invaluable skills for a salesperson to learn early on, and will surely make you more confident moving forward, no matter where you go next in life.
If money is your motive, know that the average outside sales rep salary is around $49K with commission averaging at $15,123.
The average inside sales rep makes slightly less: $43K with their commission averaging at $9,822.
Both types of sales reps need tools to effectively do their jobs.
Both need CRMs to track their customer details, however, inside sales reps use them more because they manage more deals than outside reps.
Inside sales reps also need lead generation software to provide them with high-quality leads that they can call on.
They also might use sales engagement software such as SalesLoft, which helps them send out more emails and track open rates and replies.
Their list of physical tools is small, consisting of just headsets and computers.
Outside reps need more physical tools and less software than inside reps.
They need tools to demonstrate or present their solution at any location. That might include a projector, a laptop, and, of course, a car.
Choosing which type of sales to prioritize is a difficult feat for any salesperson. We’d love to give you the answer on which to choose, but only you know which fits your business.
Now that you know the differences between inside and outside sales, you are better equipped to make the best decision.
And if you are still unsure, don’t be afraid to test things out.
Hire an outside rep as an experiment. See if it helps you close bigger deals. Hire five inside sales reps and see if you generate more opportunities.
Only time and experimentation will teach you which type of sales is best for your business goals.