According to industry researchers, the number of sales reps in the U.S. is around 5.7 million, a number that is split almost evenly between inside sales and outside sales. About 52.8% percent are outside sales reps, compared to 47.2% inside sales reps.
Both inside and outside sales strategies have their benefits, but each strategy lends itself to different skill sets and personality types. Your industry may be better suited to one sales technique over the other, or you may find that a combination of sales reps helps drive the most sales within your business.
The sales strategy you choose depends on the length of your sales cycle, the price tag on your product, and whether your sales are transactional or relational.
Let’s take a look at some of the major differences between inside and outside sales approaches and how best to structure your sales team.
What’s the Difference Between Inside and Outside Sales?
The main difference between the two approaches is where the sales take place. An inside sales team works from an office, and communicates with prospects remotely. They may rely on phone calls, emails, social media, and other online tools, and are sometimes referred to as “remote sales” or “virtual sales”.
Chief among the resources in an inside sales rep’s toolkit is customer relationship management (CRM) software. With an effective CRM, you can effectively manage accounts with clients and sales teams, and keep a watchful eye on any opportunities you may have to secure sales.
CRMs also give inside sales reps the opportunity to generate leads, whether through cold emails or drip campaigns. They can use email templates to standardize their sales efforts and import new contacts with ease.
Inside sales reps also make significant use of CRMs to improve the effectiveness of their sales calls. Inbound marketing can yield significant returns for a business if call frequency is high enough; callback wait times are also shorter, so inside sales reps can maintain high call volume.
Outside sales reps use some of the same tools, but they primarily meet with prospects in person. Even if they report to a central office, they may travel frequently to visit a client’s place of business, set up booths at a trade show or conference, and deliver a sales pitch or presentation to prospective clients.
They are also referred to as “field sales” reps, and they typically have more autonomy over their day-to-day activities.
As new technologies and CRM tools make it easier than ever to automate phone calls and other steps in the sales process, more companies are choosing to grow their inside sales departments.
For many teams, inside sales strategies are more efficient and allow sales reps to reach more prospects each day. They may also be more cost-effective than sending a sales rep across the country to meet a prospective client face-to-face.
Still, outside sales strategies are effective for B2B sales, or for high-stakes contracts that require maintaining an ongoing relationship with a client.
Both inside and outside sales reps might offer sales demos of their products, but they do so in different ways. Outside sales reps offer demos in person, such as an in-store demo where prospects can interact with the product or software themselves. Inside sales reps are trained to use automated demos or describe a product over the phone.
Outside sales reps can still expect to earn a high salary and have flexible hours outside of the office, but inside sales departments are growing quickly and employees are in demand.
So while outside sales reps often boast a more traditional people-centric skill set, inside sales reps can reach a higher volume of customers and maintain more granular customer management. With the help of CRM software, inside sales reps can extend their reach far beyond what is typically expected in field sales.
Focus on Building a Strong Inside Sales Team
No matter how many representatives you have on your inside and outside sales teams, it’s important to structure your sales team strategically. Some companies start off with an inside sales team selling lower-value products, and hire outside sales reps as revenue increases. Others hire inside sales reps to boost an already robust field team.
By keeping a close eye on sales data, and using the most up-to-date data management software, you can create the best structure and workflow for your team. Let’s take a look at a few common sales structures that you can choose from.
One popular sales approach is the assembly line structure. Just as with an assembly line in a factory, each member of the sales team specializes in a different aspect of the sales process before passing the customer on to the next stage in the process.
For example, you might have some of your team members focusing on lead generation, while others specialize in closing sales and account management. While this removes the consistency of having the same sales rep dealing with a client throughout the sales process, it allows each member of the team to focus on what they’re best at.
Using this structure, you could assign your inside sales team to work on lead generation and offer virtual sales demos from the main office. Then, experienced outside sales reps could be dispatched to follow up those leads with more personalized engagement.
This structure is often used by small and mid-sized SaaS (Software as a Service) teams, since it allows you to easily adapt as you go by hiring new employees for particular roles on the team. Each role is easy enough for new team members to understand, and they don’t have to learn the entire sales process from start to finish to be successful.
The Sales Pod
Another option is the sales pod structure. This is similar to the previous structure, except that your team members work together in small groups rather than in one assembly line.
Each team of 4-5 people has its own Lead Generator, Sales Development Rep, Account Executive, Customer Success Manager, and so on. This allows each team to develop its own systems and sales routines, while still being scalable and interchangeable.
Pods can be assigned to focus on specific markets and test new sales techniques, and you can even encourage competition between pods to help your team reach quota.
This is a great sales structure for teams that already have a successful product and are ready to refine and streamline their systems. The pod sales structure can work with a combination of inside and outside sales reps, and is a good option for when teams become too large to manage as a single assembly line.
This structure is the most traditional, and is frequently used in finance, real estate, and other industries that require face-to-face interaction. It’s not typically used by startups or SaaS businesses, because it isn’t as flexible or scalable, and is more successful when used by outside sales reps than by an inside sales team.
In this model, each individual sales rep is responsible for a client from start to finish, and they undertake all of the steps themselves, from lead generation to closing.
They may be managed by an owner or manager, who can set quotas and foster competition, but they can make their own choices about which leads to focus their efforts on.
The upside of this structure is that sales reps have more autonomy to develop their own techniques, and can build a relationship with a customer over time. It’s ideal for outside sales reps who can invest time and energy into face-to-face conversations.
But unlike with the assembly line structure, there’s no system in place for one rep to pick up where another left off. It doesn’t differentiate between sales reps who are better suited to making phone calls from the office from those who thrive in the field.
Of course, there’s nothing stopping you from incorporating elements from each of these structures, or of using different elements for different parts of your sales team.
You may break your inside sales reps into a pod or assembly line structure, while allowing your outside sales reps to operate independently using the island structure.
Inside and outside sales typically have different cycles, with inside sales reps focusing on lower-priced items that can be sold quickly. Outside sales reps may take months or even years convincing a buyer to invest in a long-term contract or purchase.
So, it may be more effective to assign each team to different products and clients, rather than trying to fit everyone into the same sales structure or timeframe.
Fortunately, modern CRM tools make it easy to coordinate multiple sales strategies and share information between teams. Both inside and outside sales reps can use the same CRM software, regardless of whether they spend their time in or outside the office.
Salaries Differ Between Inside vs. Outside Sales Reps
While salaries can vary widely, outside sales reps can expect, on average, to earn more than inside sales reps. This is because outside sales strategies require more skills, from “people skills,” to the ability to manage one’s own schedule and travel arrangements.
But inside sales reps are in demand too, especially among startups, so the difference in salary may be less in some industries than in others.
Let’s take a look at a typical salary for each of these sales roles and some of the factors that go into how much a typical sales rep earns:
An inside sales rep can earn anywhere from $31,000 to $50,000 per year. Most inside sales jobs provide a consistent work schedule at the same location each day.
Although you may be working alongside other sales reps, most of your time will be spent on the phone with prospective leads, from making cold calls to offering demos.
Sales cycles are short, and you won’t be expected to maintain an ongoing relationship with your clients. In fact, many SaaS customers prefer the ease of interacting remotely, and don’t want to have a face-to-face interaction before purchasing a product.
An outside sales rep can expect to earn from $36,000 to $65,000 per year, which is 12 to 18 percent more than inside sales reps earn. With a higher salary comes additional work responsibilities, which may include frequent travel and an unpredictable schedule.
While you may report to a central office and be assigned to a sales territory, you’ll do a lot of your work on-the-go and interact with customers face-to-face as much as possible.
Outside sales usually involve higher-value products and longer sales cycles, meaning you’ll be expected to maintain a relationship with clients over time.
Outside sales reps are outnumbered by inside sales reps in many industries, but their skills are an asset when it comes to handling complex accounts and maintaining a presence in multiple regions. An outside sales rep can take actions that an inside sales rep can’t.
Above All Else, Build a Team That Can Reach Quotas
At the end of the day, what matters most about your sales team is whether or not it reaches its sales quota. According to Forbes, only 58.4 percent of U.S. sales reps reach quota -- far less than European sales reps, of whom 65% do. Why such a difference?
One possibility is that European sales reps rely on phone conversations more frequently than U.S. reps, who only use the phone for 30.9% of sales activities.
U.S. reps use email and social media more than European reps do, but have a lower conversion rate. Sales reps in Europe close 25.8% of the time, versus only 22.8% in the U.S.
Still, not everything comes down to which platforms sales reps use to reach prospects. European companies are also spending more on technology solutions -- up to $5,950 per year per sales rep, compared to $4,581 in the U.S. -- which may contribute to their higher success rates.
Using modern sales tools, including CRMs, virtual demos, and analytics software, can lead to increased quota attainment.
Overall, outside account executives have a higher attainment rate than inside sales executives -- but they’re also spending more time on traditionally “inside” sales tasks, including up to 45.5% of their time on remote sales.
This suggests that the two sales roles are less distinct than they once were, and that the most successful companies know how to incorporate the best of both sales techniques.
That said, given the sheer utility of inside sales teams, and how cost-effective they are, inside sales are how most contemporary companies do business.
We Can Help
We know that adapting to this new playing field can be a lot for any company to handle. That’s why we’ve incorporated email, SMS, and phone calling all into one easy-to-use CRM platform.
OnCourse helps you integrate your sales strategies into a single CRM with automation capabilities that can save you money and increase productivity.
From data migration to activity tracking, OnCourse’s tools are suitable for SaaS teams, agencies, distributors and wholesalers, and more.
Reach out to us to request a demo, and one of our team members will show you how to use OnCourse to streamline your sales strategies and reach your quota!