The Trend That Is Changing Sales

Research confirms a distinct shift from field sales to an inside sales model. What is driving this migration and does it apply to your business?

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Over the past several decades the structure of sales organisations has remained largely the same. They have been primarily based on outside field sales people who make face-to-face sales calls with prospective customers and current clients.

In turn, the field sales people have been supported by inside sales representatives who helped them complete their daily tasks.

Today, the traditional sales organisation structure is undergoing a significant change. Many sales organisations are transitioning from a field sales model to an inside sales model, where the inside sales people work independently and are directly responsible for closing business, working primarily by phone and email.

In order to understand the magnitude of this trend, in-depth interviews and extensive surveys were conducted with over 100 vice presidents of sales at leading high technology companies and business services providers. The resulting research provided detailed insights about the evolution of sales organisations.

The key finding: Over the past two years, 46% of study participants reported a shift from a field sales model to an inside sales model, while 21% reported a shift from inside sales to a field sales model. More than twice as many study participants reported moving to an inside sales model.

There are three key factors that determine whether a sales organisation will utilise a field or inside sales model. They are the sales organisation’s stage of development, the complexity of the products that are sold, and to a lesser extent, the sales leader’s perception of inside and outside sales model effectiveness.

Sales Organisation Development Stage

Every sales organisation can be classified into a ‘Build,’ ‘Compete,’ ‘Maintain,’ ‘Extend’ or ‘Cull’ stage based upon its development.

The Build stage is when the sales organisation is first establishing itself. If successful, it will proceed to a high-growth Compete stage and then to Maintain stage that is contingent upon predictable success. As the sales organisation ages, it will enter either the Extend stage and enjoy longevity or the Cull stage, where it declines and is forced to reduce its size. The ratio of outside or inside sales people changes as the organisation moves from the Build to Compete to Maintain development stages.

The challenges sales organisations face is dependent upon the stage of their development.

  • The top sales challenge in the Build stage is creating sufficient sales coverage to push the product into the market.
  • The Compete stage challenge revolves around quickly scaling the sales organisation so it can compete effectively against larger established competitors. The focus shifts to maximising sales productivity by lowering the cost of sale and increasing the average sales price in the Maintain stage.
  • The Extend stage challenge is to attain widespread customer adoption so their solution becomes the de facto standard.
  • The Cull stage challenge is to revitalise a demoralised and marginalised sales force. These challenges directly influence the sales organisation’s structure and whether a field or inside sales model will be deployed.

 Sales Cycle Complexity

The complexity of the sales cycle determines the evolution of the sales organisation and at what point outside field or inside-based sales models will be implemented.

Sales cycle types can be classified by complexity as Enterprise, Platform Cloud-based or Point-specific. Each of these sales cycles vary in complexity depending upon the number of individuals and departments involved in the selection process, the size of purchase, and sophisticated nature of the solution offered.

Enterprise sales typically are large capital expenditure purchases that involve long sales cycles. Multiple departments of a company and all levels of the organisation (C-level executive, mid-level management, and lower-level personnel) are needed to approve the solution’s functionality and its purchase.

A point-specific sales cycle is usually targeted to solve the business problems of a single department within an organisation and the purchase decision is made by a small number of decision-makers usually at the lower-level of the organisation.

The Platform Cloud-based sale provides a turnkey business solution for the customer over the Internet and is sold directly to the business users of an organisation. There is a preferential field and inside sales model strategy for each of the sales cycle types. For example, a field sales model is preferred for Enterprise sales cycles and an inside sales model is preferred for Platform Cloud-based sales cycles.

Sales Leaders’ Perception of Field and Inside Sales Models

While the goal of this study was to gather quantifiable metrics based on surveys and interviews with sales leaders, there is another aspect of sales model decision-making that cannot be ignored. Ninety-eight percent of study participants responded that the characteristics between inside and outside sales people are significantly or somewhat different.

Most sales leaders believe that outside sales people have superior sales skills and the most accomplished sales professionals are in the field as evidenced by the sales leader comments below. This in turn can influence their decision and whether they implement a field or inside sales model.

“Field sales is more strategic, meeting with C-level executives and developing strategic business innovation to help them grow their business versus inside, which is more quantity and not as in-depth for the majority of the time.”

“Inside sales is a transactional engagement and the focus is on opening opportunities. Outside teams are solution and relationship based.”

“Outside sales requires far more emotional intelligence, situational awareness, and planning. Our inside sales, while equally demanding, requires persistence, research, and back-end work.”

Furthermore, many sales leaders have a personal bias toward deploying outside sales people over inside sales. In some cases, this inclination is based on their own experience from many years ago when they were in field sales. However, this historical disposition is being offset by the changing nature of how customers buy today.

Customers are smarter and information is not only easier to find, but available in greater detail than ever before. In addition, technology has become a way of life and completely disrupted the buying process. Via the Internet, customers can research products, prices, and opinions.

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Factors behind the Migration to Inside Sales

This situation is driving more sales leaders to consider and then deploy an inside sales model. For example, study participants were asked to rank the influential factors that are responsible for the migration from field to inside sales:

  • 60% responded that it was due to the increasing pressure on business performance and profitability
  • 54% said it was due to technology advancements
  • 47% felt that buyers more readily accept the remote selling process
  • 34% believed it is because of societal changes such as a mobile workforce and personal online purchasing habits.

Inside Sales Model Advantage

Study participants also cited the following advantages of an inside sales model compared to a field sales model.

  • 84% believe it is easier to onboard new sales people and share best practices
  • 79% responded that inside sales allows the organisation to scale faster
  • Increased call activity and selling volume was cited by 78% of responders
  • 76% acknowledge that inside sales provides a better strategy to penetrate small businesses and mid-markets.

Today, there is a changing perception among sales leaders about the strategic role inside sales performs. This change is due to the benefits that sales leaders believe the inside model provides in terms of scaling activity, growing the organisation, and attacking specific markets.