There are two important changes taking place in B2B sales & marketing these years:
- Buyers complete more of the buying process without meeting sellers physically (now buyers complete 70% of the buying process without any vendor contact, according to Forrester Research)
- Buyers increasingly rely on digital channels to go through their buying process activities (Now 93-94% of buyers use digital sources through the entire buyer journey, according to CEB)
In short, it means that interactions between sellers and buyers are moving from physical face-to-face meetings to digital interactions led by the buyer.
The inside sales model is growing. Fast.
But if customers increasingly rely on own research and complete most of the buying process using digital channels, why do large B2B companies still have more than 70% of their sales people working in the field?
The alternative to field sales is inside sales. Simply put, inside sales is sales done remotely that routinely involves high-frequency touch points over phone, email and web. Contrary to telemarketers, inside sales professionals are highly skilled in consultative selling and very knowledgeable on eg. industries, companies and solutions.
According to research, 37.1% of the average European sales force is made up of inside sales professionals and 62.9% by outside sellers. These numbers will continue towards equilibrium as the ideal split of inside and outside sales should be more like 50/50, according to companies in the study.
Another study published in HBR, found that over a 2 year period more than twice as many study participants reported moving to an inside sales model than to an outside model. InsideSales.com conducted research revealing that inside sales is growing 300 percent faster than outside sales.
Effectiveness and scalability drives the shift to Inside
In our experience, some of the main reasons for the shift towards inside sales are:
- An increasing pressure on business performance and profitability. An inside sales approach is traditionally a lot more effective with regards to call activity and selling volume. And it is a lot more lean – a field sales customer-interaction is on average 8 times as expensive as an inside sales interaction.
- B2B buyers more readily accept the remote selling process. Customer expectations have changed due to B2C practices and personal online purchasing habits. The majority of B2B customers do not request 2-3 meetings before they are ready to buy. Today, buyers educate themselves online, and when ready they reach out to the company that succeeded the best in building trust with superior online content.
- Inside sales is a lot easier to automate than an outside sales approach and thanks to advances in communications technology, inside sales reps are capable of analysing needs, challenging perceptions, giving presentations, conducting demos and performing most of the functions traditionally handled by reps in the field.
- An inside sales organization allows the organisation to scale a lot faster than do an outside sales organisation. In an inbound sales organisation, it is less complicated and more effective to onboard, train, coach and supervise salespeople and to share best practices.
The cost saving pays for the investments required
There are 4 big investments required to successfully make the move to a more inside based sales model; (1) Defining sales and marketing processes and organisation (2) Re-schooling selected outside sales people and/or hiring of new inside sellers, (3) Up-skilling of remaining outside sales force and (4) Choose and implement supporting technology to enable digital interactions (Marketing Automation Platform, Video conferencing etc.).
These investments are wholly funded by the potential cost saving of moving all or some sales interactions from expensive outside sales meetings to inside sales interactions.
The typical B2B company will be able to move 20% of their outside sales interactions to digital channels, with a typical average cost per interaction of 1/8th. A company with €50m in annual sales costs will save €8.75m per year. That´s more than sufficient to cover the investment required to make the transition.
Start small, scale big
The transition does not need to start with a global sales transformation. The smarter move is to start out by demonstrating the superior unit economics of a better balanced sales model on a smaller part of your sales force and customer portfolio. Learn and discover the potential impact the new setup could have if you scaled it to your global operations. And do it before your competition does.
Kvadrant is in the business of helping organisations make the transition from a field sales heavy organisation to a more balanced, effective, lean and sustainable sales model. Sales moving resources from outside to inside. Marketing moving resources from outbound to inbound.
By Thomas Børve,
Managing partner, kvadrant
firstname.lastname@example.org, +45 40410043
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