Should you dump your inside sales team?

don't dump your inside sales teamI 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.

What happened?

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.

Is Inside Sales the same as Telemarketing?

telemarketerAs any new job hunter out of college will tell you, one of the most difficult things to determine when pursuing a sales career is what is the difference between Inside Sales and Telemarketing. Many job postings seem to use those words interchangeably and the job descriptions appear to be the same. Frankly, I don’t think even some employers even know the difference between both terms.

First, there definitely is a difference between Inside Sales and Telemarketing.

Telemarketing is the quick and dirty sale. You make tons of phone calls every day, do a quick sales pitch and see if the prospect will bite. No real sales techniques are used. No qualifying questions. No establishing rapport. No building relationships. Before the prospect can even get a word in, the telemarketer is blasting away, speaking a mile a minute in hopes you will listen before you hang up.

Telemarketers usually use scripts and are required to stick with them. There is no improvising. It’s simply a cold calling technique used to make a transactional sale. Very short sales cycle. You either get a yes or no answer. If it’s no, you move on. If it’s yes (which is rare), you then expand more on what you are selling, obtain the credit card information, thank the new customer, and move on.

No lead generation required on your part. All the leads are provided in a Customer Relationship Management  (CRM). If the phone number is bad, or if the contact is bad, you quickly move on to the next call.

telemarketerOn the other hand, inside sales requires a more long-term and strategic approach to selling. You use all the basic sales techniques that you have been taught – asking qualifying questions, determining needs and problems, being an expert in your field, finding the right decision maker, handling objections, asking trial questions, and closing the sale.

Inside sales requires a lot more patience and discipline because the sales cycle can be long. You may be required to do some research before calling on prospects. You have to take good notes, schedule follow-up phone calls, and stay on top of your game.

While you may not make as many phone calls as a telemarketer, you still have to hit the phones. But besides making calls, you also need to send good emails and maybe even some direct marketing material. Also, unlike a telemarketer, you are required to update and correct your customer/prospect files in your CRM. That means not just correcting contact information, but entering good notes too.

Inside sales requires a lot more thought and planning. You are usually working more closely with your sales manager and marketing team. Depending on what you are selling and the industry you are in, you may not have a large pipeline compared to a telemarketer. In fact, a telemarketer really doesn’t have a pipeline per se; instead he just has an endless list of prospects he calls on based by time zone and geography.

So when seeking a new sales position, if you see the terms “telemarketing” and “inside sales”, you now know there is a difference. Just make sure your employer knows the difference when you go on a job interview.

Customer Service is not Inside Sales

Ian Heller in the video below makes a very good argument that Customer Services Reps are not Inside Sales people. He argues that for a company to grow you need to create two separate teams – one for customer service and one for inside sales.

While Customer Service Reps are great at answering questions and solving problems, they tend to shy away from making sales calls or up selling. Inside Sales people, on the other hand, love making sales calls because they earning commissions and bonuses, and have a greater incentive to be more assertive than Customer Service reps.

I once worked for a company that tried to encourage their customer service team to do sales. The results were dismal. The company eventually created a separate sales team.

Now with that said, that doesn’t mean you should discourage Customer Service Reps from not selling. On the contrary, by all means encourage it because some Customer Service Reps may develop a knack for selling, and decide to switch teams. I’ve actually seen Customer Service Reps transfer to an Inside Sales Team because they discover they had the talent and skills to sell. They also loved the potential of earning more money.

On the flip side, don’t discourage your Inside Sales people from doing customer service work either. Nothing makes a customer more angry than being told that “it’s not my job, let me switch you over to customer service.” Bad move. If a sales person can solve a customer service problem, let him do it. If the issue is too complex, the sales person should admit it, and then transfer the call to customer service.

My point is this – while I agree with Mr. Heller that there should be two separate teams, each team needs to work together.

Here is his video below –