Inside or outside sales? It's often argued these two strategies are at odds with one another.
But, in today's market, the two roles are blending — and both have become a vital part of sales organizations.
So, are the lines really blurred? Is inside sales just sales as usual? Wondering which go-to-market should you choose?
Let's explore the inside sales vs. outside sales equation and study how each fits into modern sales teams.
Inside sales refers to the process of selling remotely via phone, email, and other digital channels, instead of face-to-face. It’s popular in the B2B space, particularly in SaaS and tech industries.
According to 2019 data, out of the 5.7 million professional salespeople in the U.S., approximately 45.5% are inside sales professionals. Outside sales reps represent 52.8%.
Inside sales reps remotely work with their potential customers to guide them through the sales process, ensuring they find an adequate product or service that helps the customer solve their problem.
Key responsibilities of an inside sales rep include:
Since inside sales reps typically don't meet with prospects face-to-face, they leverage tools like phones, email, video, and virtual meetings to connect with potential customers.
Their schedule is more predictable, and they often have a target for the number of activities they accomplish each day (e.g., number of calls, meetings booked, proposals sent).
If you're interested in becoming an inside sales rep, you'll need to have a deep understanding of your product. Unlike an outside sales rep who can give an in-person demo, inside sales reps need to have the ability to explain the functionality and value of their product to customers during a cold call, if need be.
Another perk of inside sales is that it's a better fit for salespeople or teams functioning remotely:
Outside sales reps spend most of their time traveling to meet with clients, connect with prospects, and nurture relationships.
The 2021 Xant.ai report found that outside teams engage in 25% more calls and over 50% more email activities.
They often sell at industry events, conferences, or speaking engagements. This type of sales position is a good fit for those who like to manage their own schedules and work independently.
The tools inside and outside sellers use are so similar (e.g., CRM, email, social media), there's really no more inside versus outside sales anymore.
It's all sales.
Back in 2017, Xant.ai ran a study and found that large organizations (revenue > $500M) were dominated by field sales reps.
Small organizations with revenues below $50 million, on the other hand, had the highest percentage of inside sales reps at 47%.
HubSpot’s 2021 Sales Enablement Survey, which surveyed over 500 sales leaders, shows how much things have changed in just five years.
The study revealed that 68% of sales leaders say they'll adopt either a hybrid or fully remote selling model in 2021.
In fact, most leaders (63%) believe that virtual meetings can be as, if not more, effective than in-person meetings.
Finally, we found that 64% of sales leaders who transitioned to remote work sales in 2020 met or exceeded their sales goals.
With this in mind, the research would suggest that sales teams should have a combination of inside and outside sellers as each structure can prove beneficial depending on the company’s goals and priorities.
To create an inside sales team, there are key roles you’ll need:
The rule of thumb when it comes to your sales team is to have one SDR for every two to three AEs.
To decide the best setup for your company, you’ll have to do an evaluation of where your company currently stands.
If you’re a startup or a small business, you may want to outsource your inside sales team and keep your overhead costs down. If you’re a larger company, however, having an in-house team may be a better investment.
Now, let’s say your sales team is currently focused on acquiring new leads instead of closing deals. Sales reps spend a lot of time connecting with prospecting, nurturing relationships, and qualifying leads.
It may be worth outsourcing an inside sales team and having your in-house team focus on leads that are already qualified and purchase-ready.
While there are many upsides to outsourcing, it’s only effective with the right vendor. First, you’ll want a vendor that has a clear understanding of your brand, product, and messaging.
Your vendor should also be transparent about:
To retain top talent, companies need to pay market value for salespeople.
Glassdoor reports that the average base salary for an inside sales rep in the U.S. is $43,712 in 2021. For an inside sales account executive (AE), the base salary is just under $80,000.
The Bridge Group reports that as of 2021, the average sales development rep (SDR) earns a median base salary of $50K. Xant.ai reports that average on-target earnings for SDRs rose 3% from 2018 and now rests at $90,434.
Often, sales leaders believe outside reps bring more experience to a role, so they demand a higher base salary.
According to our 2017 data, companies that had the majority of outside sales reps had a base salary that was 36% higher than inside sales. Interestingly, the OTE for outside sales was only 9.2% higher.
OTE should be an indicator of expected earnings, so inside sales positions actually earn relatively close to the same amount as outside sales.
According to 2021 data from The Bridge Group, only 66% of reps reach quota attainment each year.
Interestingly, outside sales reps have a 10% higher quota on average than inside sales reps, according to Spotio.
And, while there's certainly a long way to go before salespeople have 100% quota attainment, these are not lackluster results.
While salespeople are sometimes assigned territories based on specific roles (inside/outside), companies often allow inside sellers to close smaller value deals on their own — and support the outside seller when working on key strategic accounts.
Better collaboration and communication between inside and outside sellers and marketing and sales, along with increased productivity (thanks to AI) will significantly elevate sales performance in the future.
So here’s a breakdown that will help you visualize the structure of an inside versus outside sales team.
Inside Sales Model
Outside Sales Model
Finally, when choosing a sales organizational structure, you'll always be at the whim of your customer. How do your customers prefer to be contacted? How do they allow you to close a deal? Can you close a $1m deal over the phone? Only your customer can decide that.
I don't believe there's a specific vertical, industry, or product where a field sales model is indispensable. Sure, there are industries that have a field sales model. But, this doesn't mean it's the optimal sales model in the current market.
The buyer of today is becoming more digitally savvy. As they're purchasing more goods for personal use on Amazon and other websites, they'll naturally expect this model to work seamlessly in the B2B environment as well.
You must be ready to meet them with a solid digital sales model — and this means including inside sellers on your team.
There really is no manual when it comes to inside and outside sales. Companies are trying different models, testing various organizational structures to make sure they find the right fit for their product, buyer, and market. Find what's right for you.
Editor's Note: This post was originally published in April 2020 and has been updated for comprehensiveness.