Inside vs. Outside Sales: How to Build a Scalable Sales Organization
Let’s roleplay for a moment. Let’s say you’re a brand new sales manager at a startup and your first task is to build out a sales team. The same questions might pop into your head that pops into so many others; What type of sales team should you build? How much should it cost? Which types of sales teams scale fastest? To answer these questions, we’ll be examining inside vs outside sales team models and help you figure out what the perfect set-up is for you.
What are inside sales?
Inside sales is the process of selling to potential customers remotely. This can be done through phone calls, emailing, social selling, or any other activity that doesn’t involve leaving the office to talk to your customer.
The primary factor here is that b2b inside sales reps are not in the field building in-depth relationships with clients. They are in an office probably making 100+ calls and emails every day. An inside sales rep generally uses software to help boost their productivity on all ends of the sales stack. Some may consider inside salespeople focussed more on transaction sales.
Executives have proven that they will take a remote meeting or call, but The Sales Benchmark Index says that 70% of your customers prefer not to meet in person. With top publications like Hubspot and Close writing about inside sales, it’s safe to say that inside sales are not just a trend, and it’s here to stay (and evolve)!
According to RingDNA, inside sales was coined in the 1970s and 80s to differentiate inside sales from telemarketing. Since telemarketers were low skilled and were generally calling regarding consumer products, the industry wanted a way to differentiate between the simple telemarketers and trained salespeople. Contrary to the telemarketers, salespeople were focused on targeting other businesses, not consumers, creating the term inside b2b sales. Inside sales were also popularized with the growth of the internet, as the availability of more and more tools grew to support inside sales teams.
How does inside sales work?
To have a successful inside sales organization, you just need to start with one representative. And if you’re the CEO, maybe that rep is you. An inside sales rep uses the internet to prospect leads, reach out to them, and follow up. Software is involved in each step of the process. We could likely go into depth simply on comparing different software, so we’ll be using just a few examples.
Note, if you have inbound SDRs, this first step does not apply. If you’re just getting your sales organization off the ground, you’ll likely be doing outbound sales. Don’t confuse outbound sales with outside sales. In sales, there are also terms called outbound sales and inbound sales. Outbound sales means reaching out to prospects cold and inbound means contacting leads who fill out forms on your website, or warm leads. Make no mistake, outside and inside sales are very different from outbound sales and inbound sales.
A popular prospecting tool that many salespeople use is LinkedIn Sales Navigator. On it, you filter for your ideal customer persona, then star names that look like they could be a quality lead. There are dozens of ways to prospect and you can see a helpful list right here.
Initial Reach Out
The first reach out can be done through any channel where your customer wants to be contacted. Generally, this is emailing, calling, social selling, or various other channels that have sprouted up with the rise of the internet. Inside sales organizations tend to be very analytical, so over time, they will know what types of reach outs do best, and why. Products like Reply or Outreach help with this process.
Any good inside sales team has a meticulous follow-up system. A deal is generally won on the follow-up, not the initial reach out. Unlike in an outside sales organization, inside sales follow-ups are generally focused on call or email to-do lists. Comparatively, outside sales professionals tend to meet outside the office to better understand what the potential client is thinking and how they might close the deal. This is one factor that substantially increases the time between introduction and sale.
What’s the difference between inside and outside sales?
Inside sales reps begin working on smaller transactional deals. What represents a small deal obviously depends on the company, but anything under $30,000 a year could potentially be put in this category. Although, the longer the customer is with a company, the bigger the deal can become.
Outside sales teams are working on much larger deals that require deeper relationship building with potential clients/partners. There isn’t really a limit to the size of a deal an outside sales rep can work on, as it can go well into the millions. Some could argue the CEO is the company’s biggest outside sales rep.
Inside salespeople are spending most of their days prospecting, calling or emailing, and logging data into the CRM. Tools like Demodesk are important for these professionals so their time is not wasted on tools that are not integrated. They generally don’t have a reason to leave the office for work as they do most of their reach outs and sales from remote locations.
Outside salespeople will be spending much more time researching their prospects and learning about new geographies. They’ll be understanding the org charts to aim to meet the people that are necessary for finalizing the decision to become a customer. And of course, there are tons of wining and dining happening for an outside salesperson.
Inside sales media salary is $43,000/year base, plus bonus and commission earnings.
Outside sales media $49,000/year base, plus commission/base
Why do b2b SaaS inside sales work so well?
The inside sales model for b2b SaaS has caught fire in the last several years. We believe this is the case for a few reasons. Many SaaS products have low entry-level costs that scale up with a company. Due to the product being relatively low cost, they don’t need an outside sales rep going to different geographies to sell it. It’s at a price where transaction selling is okay, so working a list of 100 customers every day will likely be more lucrative than trying to convince 10 to convert in person. In regards to tools, the inside vs. outside sales debate will usually go to the inside sales side, simply because the tools have gotten so good.
Some of the ones mentioned above are only a few examples of very high-quality software that have been built out to service sales teams. The better the software gets, the more inside sales will creep into the territory of outside sales. Still, there will always be a point where in-person human interaction is key. Demodesk is an example of a product that helps marry the remote work of Inside Sales Teams with personalized and interactive video meetings. We will touch on this later in the article.
Reasons to start with inside sales
- It generally comes with less of a price tag. Inside b2b sales reps cost less than outside ones, usually because they are not responsible for larger enterprise deals. Some would argue that it takes less skill to be an inside sales rep. In addition, there are fewer travel costs associated with an inside sales model, whereas outside sales reps are spending most of their time in the field.
- If your ACV is under $30,000, consider an inside sales team. If the product your selling doesn’t require multiple decision-makers and a budget approval on their end, then it is probably a waste of everyone’s time to build a relationship for 6 months before the sale. Inside sales equate to more transactional selling with lower-cost deals when compared to outside sales.
- If you’re going into rapid scaling mode (let’s say you just raised your series B), some companies might go with an inside sales force simply because it can scale up faster than an outside sales force.
- As the market gets more internet savvy, potential customers may prefer to be contacted through one of the b2b inside sales channels. Especially as millennials and Gen Z grow in the workforce, a phone call or email exchange could be more optimal than meeting face to face in a coffee shop.
At the end of the day, only you can determine whether inside sales is the right sales structure for your company. Generally, the bigger and more important the deals are, the more you should mix in an inside salesperson.
Is Inside Sales The Future of All Sales?
As SaaS tools get better and serve the sales team, I personally believe that the lean, scalable, and metric-driven world of inside sales will start to make its way farther up the food chain, creating a space to sell more and more deals. With software like Demodesk being available as well, inside sales is starting to feel more like outside, which is a very powerful sentiment.
As technology continues to evolve, I think inside sales will become more popular among the two. With that said, I don’t think there will ever be deals worth tens of millions of dollars that happen without any in-person interaction. Unfortunately, predicting the future doesn’t really get anything done, so we’ll just need to see what Demodesk conjures up for us to use as they lead the way with sales demo software (and beyond!)
By Mat Sherman, Content Writer at Demodesk