3 Reasons 2015 is the Year of Inside Sales

(Editor’s note: This post was guest written by Kyle Heller, a manager with renowned sales and marketing consultancy ZS Associates) 

In 2013, InsideSales.com hosted its first Inside Sales Virtual Summit, one of the biggest gatherings of sales experts, presentations, and discussions online. TeleSmart Communications President Josiane Feigon, one of event’s speakers, had a notable quote that offered one of the biggest takeaways of the event:

“Prospects now participate in sales presentations via Skype, web conferencing, and video. These tools are quickly catching on and overtaking face-to-face visits and traditional meetings, which are expensive and too time consuming for busy buyers. Inside sales will soon surpass field sales.

While that prediction was made over a year ago, the market seems determined to make it a reality. In fact, a recent study ZS Associates conducted with Reality Works Group’s Anneke Seley, “Outside In: The Rise of the Inside Sales Team,” found that smaller high-tech companies and startups already generate 55 percent of sales from inside teams. Meanwhile, 40 percent of large technology companies plan to increase their inside sales headcount by 2016.

New Data Shows Startups Generate 55% of Sales from Inside Sales Teams Click to Tweet

So, what’s driving that desire to change?

3 Reasons 2015 is the Year of Inside Sales

  1. Dollars and Sense
    Doing more with less is a motto that isn’t going away any time soon. B2B organizations continue to search for ways to cut costs and increase efficiencies, and as more startups find success using inside sales as their primary sales channel, many larger companies are taking note and following suit. The ultimate goal is achieving a lower-cost and more efficient selling model.
  2. Fewer Deals During Lunch and More on LinkedIn
    B2B buyers increasingly are becoming comfortable with collaborating, researching, and even completing the purchase cycle through online channels, and businesses are reacting accordingly. In a 2013 Harvard Business Review blog post, ZS Associates revealed how IBM refocused its inside sales teams, investing in social media training and personalized digital pages to help its salespeople generate leads and manage account relationships. Early results included a 55 percent increase in Twitter followers and a significant increase in the number of high-quality inbound leads.
  3. Intimacy Without Face-to-Face Interaction
    The proliferation of technology and social tools means that people don’t need to leave their desks to travel down and even complete the buyer journey. Certainly, there now are many more opportunities to reach, engage, and influence prospects and customers, and the number of touch points will only continue to grow. Savvy companies recognize this trend and are arming their inside sales teams with not only the tools to engage clients and prospects, but also the expertise to identify preferred channels of prospects and clients and to communicate effectively through them.

As companies begin to increase the size of and reliance on their inside sales forces, it’s critical to realize that the old lens through which they viewed these parts of their teams may need an upgrade.

For example, our research found that 65 percent of organizations surveyed indicated that they classify inside sales staff members as exempt from overtime. While the Federal Labor Standards Act offers clear guidelines for classification of outside salespeople, the details for inside sales people are not as clear-cut. Unfortunately, this vagueness has left some companies to find out the hard way that overtime laws don’t always apply for inside sales teams as they do for field salespeople. As responsibilities of inside and outside salespeople begin to evolve, similar challenges will arise.

3 Key Areas the Transition to Inside Sales Will Impact

Thinking of adding an inside sales team? Here are three additional areas where you’ll need to adapt your approach:

  1. Organization Roles and Structures
    The sales landscape continues to rapidly evolve. Changing business models, technologies, and customer preferences are prompting high-tech sales organizations to rethink the way they design and deploy sales resources. Many are specifically focusing on enabling their inside sales staff to respond to clients and prospective customers more efficiently and effectively.
  2. Team Development and Growth
    Results of our survey revealed that the standard turnover rate for inside sales professionals in technology companies is 19 percent. Organizations should begin thinking of the inside sales role as equally import as outside sales. Companies need to consider retention strategies, competency models, as well as coaching and career progression for inside sales, just as they do for their field sales organizations.
  3. Compensation
    Compensation structure is always an important element of sales. When built correctly, compensation plans motivate, reward, and build employee loyalty. A poor compensation plan produces exactly the opposite result. With an increased role in generating revenue and engaging clients and prospects, tying an inside salesperson’s quota and commission plan to an outside salesperson may no longer make sense. Organizations need to rethink their approaches to the drivers of sales force effectiveness, including motivating and rewarding their inside sales teams through sales compensation programs.

The increased role of inside sales will allow organizations to adapt to the fragmentation of communication channels available to reach their prospects and clients. However, even with the increase in efficiency and cost savings that an inside sale team delivers, some relationships may still require in-person engagement. The organizations whose sales forces will excel are those that are able to effectively identify the specific touch points their prospects and customers require, and evolve their strategies, teams, and tactics to address those touch points accordingly.

Download the Executive Summary

To get more insight and data from our latest survey, download the executive summary here.

Photo by Ally Schmaling

Kyle Heller
Kyle Heller

Kyle Heller is a Manager at ZS Associates in San Francisco, and is the Sales Compensation leader in ZS’s High Tech practice. He is a Certified Sales Compensation Professional (CSCP) whose expertise includes plan design, goal setting, plan administration and plan health checks. Kyle is a frequent speaker at sales compensation conferences and previously co-chaired ZS Associates’ Compensation Conference. In addition, Kyle has authored several articles on incentive plan design best practices and trends.
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