In the 1980s IBM decided that it couldn’t afford to market its new personal computers (PCs) using its existing outside sales force—the salespeople who called on companies in person to sell far more expensive mainframes. The company said that outside sales calls cost $192 each (about $450 in today’s dollars). It needed a less expensive way to get its low-end products to market. So IBM authorized other companies to sell PCs in retail stores.
It seems that businesses have been taking a hard look at their outside salespeople ever since.
Studies show that traditional outside or field-sales jobs are diminishing. Outside salespeople—the ones who leave their own offices to pay personal calls on clients in their territories or on their routes—are becoming rarer on the ground. They are being replaced by two groups. One is the “nontraditional sales force” I have described in previous blogs. The other group is made up of “inside” salespeople who work mainly from their own companies’ locations, often using technology to make inbound or outbound sales calls.
Why does this matter if you are considering sales training courses or sales coaching programs? Because those classic outside salespeople are the intended audience for most of the sales training programs on the market. Likewise, the sales skills taught in those programs—or, rather, the tips and techniques that pass for sales skills—are intended for outside reps.
Inside salespeople are cheaper, and they make 18 times more sales calls.
As the internet, videoconferencing, and other technology have made it easier to sell goods without physically calling on customers, the number of inside sales positions has grown dramatically. The economic argument for this is a strong one: According to a report in the Harvard Business Review (HBR), inside sales reps earn 60 percent less than outside reps and they make 18 times more sales calls per day (46 versus 2.5).
The study confirms that the growth of inside sales jobs is far outpacing the growth of outside or field sales jobs. In a number of major companies (including IBM), huge inside teams now do the work of outside reps. Three reasons are cited for the trend:
- Business-to-business sellers are feeling competitive pressure to cut sales costs.
- Buyers are becoming more comfortable collaborating remotely.
- New technology for web conferencing makes long-distance sales calls as effective as face-to-face calls.
The HBR report finds that a whopping 98 percent of sales executives say that the skill sets and characteristics are different between inside salespeople and the outside sales force; only 2 percent think the skill sets are the same. Yet the same study finds that fully 40 percent of new customers are being landed by inside people, even in firms that have an outside sales force. What’s more, sales costs are 50 percent lower when inside teams are used.
This amounts to a powerful case for inside sales teams. But if 98 percent of sales leaders insist that insiders have different skill sets than outsiders, one has to suspect that the insiders are getting different sales training and sales coaching programs—and probably much less of both.
Because of The Sales Board’s own extensive research, we know that executives are largely mistaken about the difference in skill sets. We also know which sales skills have the greatest impact on improving sales performance. These few core skills are the same for insiders and outsiders. By focusing on them in sales training courses and sales coaching initiatives, we can produce dramatic boosts in revenue, margins, and profits.
Doesn’t it sound like high time to arm both our inside and outside sales forces with the right set of sales skills? It seems to me that the writing is on the wall.
For information about how to improve sales skills and make sales training pay huge dividends, contact Action Selling at (800) 232-3485.