I have worked for two major corporations that eliminated their inside sales teams. Both corporations thought they were “saving money” by dismantling the inside sales teams and transferring the duties to the outside sales reps. Both corporations also believed there was too much overlap between the inside and outside sales departments, so they wanted to eliminate duplicative efforts. The thought was that the outside sales team could handle simple duties like renewing customers and selling smaller products or services, along with the rest of their responsibilities.
However, in both cases, the corporations realized a major mistake was made and they later reinstated a new inside sales team. In fact, one corporation did an about-face within a matter of 4 months. However, since most of the inside sales reps were no longer working at either company, both corporations had to start from scratch by hiring and retraining a whole new group of inside salespeople.
In the first case, the corporation saw a major drop in the sales of durable medical equipment parts. Since outside sales reps earned most of their commission selling large equipment and services, they didn’t waste their time selling smaller items.
In the second case, the corporation received push back from both their outside reps and customers. The outside reps complained they didn’t have time to follow-up on renewals, and frankly, they weren’t earning a lot of commission on renewals to make it worthwhile. Customers began complaining they weren’t given the same level of excellent service they received in the past from their inside sales reps. With renewals starting to drop, a new inside sales team was quickly assembled and they began the long process of retaining customers.
What can we learn from these two cases?
1). Focus. Selling is about focus. If your sales team is selling too many products and services, something is bound to fall through the cracks. Sales people are commission driven. They are going to focus their time and energies on products and services that will generate the most commission. That’s common sense. For example, if given a choice between generating a new sale for a $5,000 product vs. a $50.00 product, which one would a smart sales person focus on? You got it – the $5,000 product. So an outside sales rep isn’t going to bother chasing after a small order when there are bigger fish in the sea to catch.
2). Time. Sales people have only so much time in the day to sell. So smart sales people realize they must set priorities and stick with them. Time management is critical. Larger orders will always be a sales person’s first priority.
3). Small products add up. While renewing customers or selling small products may not be very sexy, the orders do add up. A $700 subscription may be chump change for some. But when you start dealing with thousands of subscriptions with that price point, you are looking at some serious money. Not to mention the opportunity to cross or up sell once a subscription or small product is purchased.
4). Eyes and ears. The inside sales department serves as the eyes and ears for the outside sales reps. Outside sales reps can’t be everywhere at once. They have too much of a geographic territory to cover. But inside sales reps can cover a lot more territory quicker and easier. They can provide intelligence that outside sales reps can’t always get. Examples – a competitor is making a major play on a large account, or an account is threatening to cancel. By acting as an early warning system, inside sales reps can alert outside sales reps of potential threats to their sales. This collaborative effort is a win-win not only for both sales teams but for their employer too. It ensures more sales.
5). The larger picture. What many companies don’t understand is this – inside sales departments don’t exist just to sell. Inside sales departments are your last line of defense. If the marketing department fails, if the billing department fails, if top management fails, if the outside sales reps fail, if the production department fails, it is the inside sales department that will come to the rescue and turn things around. Thus, the inside sales department serves as the checks and balances to the rest of the departments. Inside sales teams are more motivated to solve problems because they are earning commission.
Inside sales people are also serving on the front lines. They “get it” if customers are upset and complain. They act quickly to resolve issues before they erupt like wildfire throughout the market. Inside sales reps know so well the power of social media these days. All it takes is a lot of negative reviews on Yelp, Google Reviews, industry discussion boards and blogs before its game over, and sales begin to slide.
While some companies may have a love and hate relationship with their inside sales departments, it’s time to start sharing the love. Don’t dump your inside sales team.