Sales & Marketing

Mastering the Virtual Sale: Why Companies are Staking their Future on Inside Sales

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It’s long been understood that the true heroes in a sales force were the ones in the field. They were the ones hunting the big game and bringing it home. They got the pay and the prestige.

Far less appreciated or admired were the inside sales people.

They spent most of their time on low-impact activities, far removed from the decision maker at a customer site. They were mostly viewed as support staff for the field sales team. The inside sales people didn’t carry quotas. They didn’t close deals. They didn’t get commission checks. Generally speaking, they just cultivated leads and made appointments for others.

But the world of inside sales is rapidly changing.

Indeed, the status of the inside sales professional is rising to new levels as people in this role become increasingly skilled, motivated and ambitious. They have taken over prospecting activities that once were the responsibility of field sales. They’re relying on insightful research and powerful communication technologies to engage buyers. And now, they’re even carrying quotas and closing deals.

New thinking, new capabilities, and an array of new tools are all contributing to this shift. As a result, the demand for inside sales specialists is strong – even at a time of high unemployment overall.

“What we are seeing is significant growth in terms of job openings and jobs created in the profession,” says Bob Perkins, president of the American Association of Inside Sales Professionals (AA-ISP), a four-year-old organization with 40 chapters, an accrediting arm, and a membership of 3,000. “A growing number of companies and industries are selling virtually.”

The making of a movement

Evidence of this growing movement can be found in several areas. While the AA-ISP estimates there are about one million people now employed in the profession, SimplyHired.com calculates that job growth for inside sales rose 124 percent over the last two years. Meanwhile, a 2009 InfoUSA study found that hiring for inside sales roles was outpacing outside sales positions 15 to one.

And, finally, average compensation levels for skilled inside sales professionals have risen steadily in recent years from the $70,000-80,000 range to the low six figures. The average target compensation for inside sales reps in 2010 was $103,000, with $63,000 of that coming from base salary, according to research from Phone Works, a consulting firm specializing in telesales.

“Companies that aren’t taking inside sales seriously are leaving lots of money on the table,” contends Trish Bertuzzi, president and chief strategist at The Bridge Group, which focuses on helping companies develop their inside sales capability. “It’s never been easier for an informed and skilled rep to get a prospect on the phone. And by engaging buyers more quickly and effectively, you can close more business.”

One reason that more and more companies are taking inside sales seriously is the increasing capabilities and competencies of such groups. Not only are they proving more proficient at prospecting and lead generation than field reps, they are enabling companies to expand their addressable markets – whether those markets are defined by geography, industry or size. And while the largest and most complex deals still tend to be the province of field sales, the size and scope of deals the inside team closes are rising, according to industry experts.

That said, simple economics may be the greatest motivator for embracing inside sales. “Cost of sales is a huge source of attraction when considering investments in inside sales,” says Steve Richard, co-founder and chief content officer at Vorsight, a sales effectiveness firm that specializes in inside sales training and appointment setting. “You can reach many more prospects and have many more sales conversations at lower expense with inside teams. For companies looking to scale up their sales efforts, this is a powerful option.”

Technology sector embraces inside sales

The rise of inside sales is perhaps most pronounced in the business technology arena where companies have embraced virtual selling and have actively invested in it. The explosive growth of Salesforce.com and other firms that have re-packaged technology products “as a service” has been a critical factor in the movement. They could both demonstrate and provision their offerings from a distance.

But it was the changing economics of their offerings that made it both possible and necessary to sell from a distance. They couldn’t justify putting armies of sales people in the field when their price points were so much lower than prior IT solutions. Nor did they need to.

Nowadays, many venture capitalists refuse to fund startup companies if they aren’t fully committed to a selling model that emphasizes inside sales. After all, such companies are expected to be agile, adaptive and innovative on other fronts. Why not rethink the sales model? Why not execute a new selling strategy than can deliver lower costs and a higher return on investment?

The new professionalism: what’s driving it?

One issue that may have impeded the development of the inside sales profession in the past is the stigma associated with phone sales. In other words, such workers often would have been thought of as telemarketers – a poorly motivated group that exhibits very high rates of turnover. And while there may have been some truth to this characterization in the past, it is no longer the case. Now, the status associated with inside sales is rapidly rising as it delivers ever more impressive results.

To get a sense of the growing professionalism and increasing performance of inside sales, consider Dan Pink’s recent book, “Drive: The Surprising Truth Behind What Motivates Us.” Drawing on a deep well of cognitive and behavioral research, Pink argues that high motivation and performance can be tightly linked to three key factors: Autonomy, Mastery and Purpose. Let’s consider these factors one by one as they pertain to the new professionalism of inside sales.

Autonomy: the freedom to act

Autonomy, as Pink defines it, is the desire to be self-directed and manage our own lives. It’s an issue that came up in conversations with several inside sales managers. Interestingly, inside sales professionals are now getting far more independence than they might have in the past. In many cases, they can make their own plans, manage their own territories, determine their own hours, and take the steps they believe are necessary to be most effective. They aren’t simply handed scripts and told to pound the phones. They have the freedom to research their prospects and converse as they see appropriate.

“We give our inside sales people the templates and training to master products, messages and conversations,” says Joe Bush, director of sales and business development at TriNet, a fast-growing provider of HR-related outsourcing solutions. “We don’t micromanage them.”

Of course, autonomy doesn’t mean managers have stopped managing. Quite the contrary. They tend to provide more feedback than ever due to their physical proximity to the inside team and access to data on their performance. In fact, they can provide this coaching on a continual basis – something the field sales person typically receives far less frequently.

By tracking metrics of various kinds, managers can make observations about what may or may not be working. They can provide perpetual guidance to help their people strengthen their performance. Critical to success, these interactions reflect a spirit of support as opposed to control, enablement as opposed to compliance.

Mastery: the power to perform

Mastery, according to Pink, is our urge to get better and better at something that matters. It’s something that’s hard to accomplish when one’s uncommitted to one’s craft or company. But managers of successful inside sales groups report increases in job tenure in recent years.

Professionals in these roles are more loyal and engaged. They are developing a deeper skill set and array of capabilities. They are progressively more talented at engaging their prospects in compelling and insightful conversations. They are moving deals farther along a decision cycle than ever – sometimes to the point of completion. They are, in essence, mastering their profession.

Employers, meantime, are making this possible by giving their inside sales people more extensive training than they might have in the past. They are training them not only on product and solution issues, but on critical conversation and interaction skills. Drawing on the expertise of specialized training firms, they are teaching their people how to conduct research, ask relevant questions, convey key messages and maximize their time.

Inside sales professionals also have access to ever more sophisticated tools. Whether they are relying on new tools for data and research, conferencing and collaboration, automated dialing, marketing automation, or customer relationship management, they are ready and able to engage in rich conversations with their prospects. With access to powerful technologies and information streams, inside sales people can productively reach prospects in ways that are simply impossible in the field due to the amount of time spent in transit.

Such capabilities are truly empowering. “Our inside sales team has developed an ownership mentality. They are getting higher-level meetings and moving the conversation forward,” says Paul Leto, director of Americas inside sales for F5 Networks, a billion-dollar provider of Application Delivery Networking solutions. Leto runs a six-person, quota-carrying team responsible for opening doors for field sales and channel partners. As he explains, “They have the tools to dive deep, have substantive conversations and even do a proof of concept virtually.”

Purpose: reaching new heights

Finally, Pink points to purpose as a driver of results. In this context, we might consider purpose in relation to the overarching success of the enterprise. As the critical role of inside sales becomes unmistakably clear, individuals in this profession experience a new and highly motivating purpose to their work. Not only are they treated with greater respect by company peers, but their own confidence, engagement and ability to perform reaches new heights.

In fact, sales professionals who previously worked in the field are increasingly taking roles on the inside. Having experienced years of grueling travel and the prospect of many more ahead, they are embracing what they consider a higher quality of life. As Barry Trailer, a sales consultant with CSO Insights, puts it, “They are coming in from the cold.” And, as compensation levels rise for inside sales professionals, they may not even be giving up much (or anything for that matter) in terms of compensation.

All of these factors are raising the quality of people attracted to the inside sales profession. “We’ve been able to attract an extremely high level of talent, and they have been extremely productive for us,” says Leto. “We give them the tools, training and freedom to succeed…. We treat them like sales professionals and we get results.”

What’s next?

Going forward, you can expect to see a growing share of a sales organization’s overall value coming from inside sales. Why is that? Because sales is becoming ever more scientific in its methods and sensibility – and inside sales teams are in the best position to capitalize on this trend.

That’s reflected in the way inside teams are adapting to the escalating pace of business and the growing distractedness of buyers. “Today’s decision maker is getting bombarded with messages on a lot of different fronts,” says TriNet’s Bush. “To address this challenge, you have to have a very methodical interaction model and a very methodical cadence.”

As the experience of an increasing number of firms suggests, inside sales teams are well placed to run experiments in a controlled and measurable setting. With large sample sizes of prospective customers and real-time access to information, inside sales managers can easily test their hypotheses and learn from results. They have visibility into sales activities that far surpasses the visibility of field sales managers, particularly since it’s so challenging for field reps to keep buyer profiles continually updated in a Customer Relationship Management (CRM) system. But, just as important, inside sales managers can take action and effect change more quickly than their counterparts in field sales.

TriNet’s inside sales team is now running and tracking 87 campaigns in 14 different markets. It currently generates nearly a quarter of closed deals and intends to source 40 percent of all deals by the middle of 2012. And through its efforts, closing ratios (proposal to win) have climbed from 21 percent to 25 percent in the past year. Finally, it has taken actions to target and win clients with larger employee counts – a key factor in a deal’s profitability for the firm.

What’s enabled TriNet to achieve these results? Its ability to track activities, analyze outcomes, and take appropriate action. Based on sales campaign results, the inside sales team can reassess its lead sources, introduce new messaging, provide added coaching, or engage in other interventions necessary to enhance outcomes. “We can look at conversion rates, compare baselines and make fact-based decisions to increase productivity,” says Bush.

The mounting success of inside sales doesn’t suggest it will supplant field sales anytime soon. But it does highlight the deepening linkage of the two. “We are trying to get the best of both worlds,” adds Bush. “The inside rep takes the deal as far as possible and then hands it off when it’s 100 percent primed and ready to go. At that point, the buyer is running toward us. Instead of five face-to-face meetings in the field, you can narrow it down to two. You maximize the ROI of outside reps.”

Blurring boundaries

But who’s inside? Who’s outside? One trend that challenges such distinctions is the emergence of the “hybrid” rep. Pioneered as a model by Salesforce.com, hybrid reps spend 80-90 percent of their time acting as inside sales reps but carefully plan out trips into their territories to meet prospects and clients in person. And the concept doesn’t stop there. Outside reps also are beginning to exhibit hybrid behavior. Some field sales professionals now spend as much as 75 percent of their time on the phone or engaged in web conference calls.

Such patterns underscore both the economic advantages of going virtual and the trust-building advantages of face-to-face interaction. “The boundaries are blurring,” says Paul Swiencicki, vice president of inside sales for iRise, an application visualization software firm.

As suggested, inside and outside sales people may have more in common than we now recognize. For instance, everyone in sales stands to benefit from the rich interactions enabled by today’s virtual selling tools. When these tools are married with compelling messages and dynamic visuals, sellers can lock on to the buyer’s pain and articulate complex value propositions in ways that that are easy to grasp – creating a greater sense of urgency than might have been possible otherwise.

“Companies today are developing fabulous content and putting more focus on virtual interactions,” says The Bridge Group’s Bertuzzi. “This makes buyers much more comfortable with making a decision based on conversations in a virtual meeting.”

Swiencicki, who built an inside sales team to 75 reps and $40 million in revenue at his former company, SurfControl, believes decisions about inside and outside sales investment will continue to be influenced by deal size for the foreseeable future. But the movement toward smaller deal sizes associated with service-based technology will create ever more demand for virtual selling skills, he contends. “Inside sales people have been underappreciated and underutilized,” he says. “But that’s changing.”

Which brings us back to the assertion that inside sales teams will produce a progressively greater percentage of overall sales value in the near term. As buyers become increasingly comfortable with virtual selling and more high-value interactions are conducted from a distance, expect everything from prestige to compensation levels to favor those who can best capitalize on the new science of selling.

That might seem to favor individuals now categorized under inside sales. But another factor to consider is the growing uncertainty about what should be considered inside or outside. Such distinctions may become hard to clarify as “inside” sales people start to work from home and become ever more distributed while “outside” sales people progressively adopt many of the tools, techniques and cadences previously associated with inside teams. As these trends play out, the most successful sales people – whatever you call them – are likely to be masters of the virtual sale.

Britton Manasco is a specialist in thought leadership marketing and sales enablement. Check out his blog, Illuminating the Future, and email him at Britton@ManascoMarketing.com.

Comments

By Jeffrey Jones

Very positive article. The trend of growing the Inside Sales Department I feel will continue. Any business manager who desire to grow into any vertical can do so with the power and support of a professionally managed Inside Sales Force. The Inside Sales Force has matured and become of age as a need that is no longer the department that companies would like to have but no rather the department that they must have to survive.

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