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Inside sales vs outside sales: Which sales type is better for your business? – This has been a topic for discussion for ages. And following the pandemic, the discussions have taken a very different turn.
The role of outside sales executives radically changed after the lockdown measures and work-from-home policies were implemented. Since door-to-door sales were no longer an option, many businesses had to make major internal changes.
The purpose of this article is to outline what inside and outside sales are, how they are different from each other, and the impact each has on small and medium businesses.
What is inside sales and outside sales?
Inside sales or virtual sales is the process of selling products or services to potential customers remotely.
Previously, inside sales activities were primarily conducted over the phone, but today’s inside sales executives have access to communication tools such as text messaging, email, video calls, social media channels, and sales management tools.
Outside sales or door-to-door sales is the process of selling products or services by meeting prospective customers at their preferred location, an event, etc.
Modern communication and sales management tools allow a substantial portion of outside sales to be completed from the office. Nonetheless, outside sales are distinguished by their flexibility and willingness to make sales wherever it is required.
Inside sales vs outside sales
One of the biggest decisions in implementing a powerful sales strategy for your business is choosing between inside sales and outside sales. However, businesses had no choice in the face of the pandemic. Remote sales became the only way to sell.
The outside sales approach is decreasing faster than ever and inside sales are growing at an exponential rate, nearly 15 times faster than outside sales.
However, outside sales are still very important despite all the changes businesses are experiencing. The convenience of remote sales does not change the fact that people still prefer to make big purchases in person.
Technology and the pandemic have blurred the lines between the two most debated sales approaches. Still, there are some key differences between the two that impact SMBs in multiple ways.
How are inside sales and outside sales different?
While outside sales and inside sales overlap significantly in today’s world, they still have their differences.
1) Sales Cycle
One major difference between them is the length of the sales cycle. Inside sales have a much shorter sales cycle than outside sales.
For instance, in the real estate or insurance business, you must meet your prospective customers in person at least for the first contact. Getting in touch with them, setting a date, time, and location for the meeting, traveling, engaging, and finally closing the deal will be a pretty long process.
While the steps are nearly the same, inside sales generally take less time than meeting a customer face-to-face.
This difference also arises from where the sales are conducted.
It is generally the outside sales process that is more expensive because field executives have to travel quite a lot, which results in more expenses and also the uncertainty that everything will not go as planned.
Meanwhile, inside sales executives use cost-effective technologies like video conferencing or social media platforms to reduce acquisition costs. In other words, even if the deal doesn’t close, a lot of resources will be saved, like time and traveling expenses.
3) Sales Volume
Inside sales executives can pitch their product or service to a larger audience every day since they do most of their sales remotely. They do not have to worry about travel affecting the time they have at their disposal, which allows them to be able to contact as many customers as they like.
Outside sales executives, on the other hand, reach fewer customers each day, but they are often well-targeted ones. Here, spending as much time as possible with a prospect makes sense from a financial perspective. It is a significant loss of time and money to lose a deal for which you had traveled for weeks.
4) Closure rate
On average, outside salespeople have a much higher close rate than inside salespeople. Since the cost of acquiring customers is much higher, outside sales executives are better off working with prospects for however long it takes to close them.
When it comes to inside sales, it is better to put a difficult prospect on hold and return to it later than to pursue one and lose several other sales.
Which of the two approaches is better for SMBs?
Although these two approaches to sales are opposites, they serve the same purpose. There is in fact a decline in this traditional division between inside and outside sales, as many companies execute a mix of both.
However, even if the distinction between inside and outside sales fade, it’s critical for businesses to understand them to decide which strategy – or both – would be the right fit.
Today, inside sales are becoming more and more common among companies, however, that does not make it the best choice for everyone. Certainly, there are situations when an outside sales strategy would be the right choice for a business.
Making a decision can be complicated, many factors need to be considered, but in the end, the decision should be based on the type of business you run.
Fortunately, technology today has simplified both methods, thus there is little difference between them. CRM systems and other sales management tools make it easier to stay in touch with clients and track the progress of sales.