Sales is defined as the activity or business of exchanging money for goods or services. Zorian Rotenburg, the VP of Sales and Marketing at InsightSquared, expanded on that by saying, “it’s the process of actively listening to people about their pains and needs and then helping them solve that pain and need with your help.” The best sales reps know that offering solutions to your prospects is the winning strategy.
But, not all sales roles are the same, especially when it comes to inside sales vs outside sales. If you are wondering what the difference is, you are not alone. To become a successful sales professional and determine which realm is best for you, it is important to understand the distinct differences between inside and outside sales.
In this article, we’ll give some clarity and break down some of the key differences. But first, let’s dive into what we mean by inside sales versus outside sales definitions.
What Is Inside Sales?
Inside sales is the business development and sales that occurs from behind a desk — either by phone, email and / or the internet.
During the 1980s and the rise of selling over the phone, there became a need to differentiate between telemarketers with those who are remote sales. Telemarketers are essentially scripts that can be read by anyone from anywhere. In fact, most telemarketing today is performed by computers.
Inside sales, on the other hand, is a position that requires sales skills. Performed over the phone, through email, Zoom, and through chats on the company website, inside sales reps bring their sales skills online.
In light of the surge of remote work and social distancing, inside sales continue to surge in popularity. It enjoys 15x’s the amount of growth of outside sales.
What Is Outside Sales?
Outside sales, on the other hand, is the face-to-face approach to selling that requires travel and the salesperson to often drop in on its customers and prospects at their place of business.
While inside sales continue to grow, it still does not replace the importance of outside sales to many companies. Outside sales, also often referred to as field sales, typically travel to meet decision-makers in person.
With more careful prospecting practices, outside can cultivate any stronger relationships needed with more quality time. Businesses and products that demand more time, attention, and set up are typically ideal for outside sales.
Outside sales mean spending more time with customers directly, but the line continues to blur based on the client’s needs. The rise of remote communication requires sales to offer the flexibility of both meeting in person and speaking over the phone or through email. In fact, the average outside sales rep spends about half of their time selling remotely. However, the emphasis is still on creating individual relationships over the more fast-paced nature of inside sales.
What Are the Differences Between Inside and Outside Sales?
Before you can decide what type of sales work best for your business, you need to understand what their differences are. Both inside and outside sales offer distinct advantages for companies. Here are some of the most significant distinctions between the two types of sales:
1. Where the Selling Takes Place
One of the biggest differences between inside sales and outside sales is where the actual selling is taking place. Most sources define inside sales as the act of selling goods or services to customers over the phone or online. With advances in technology now making video sales calls possible, inside sales is sometimes also referred to as “remote” or “virtual sales”. When you are working from inside your company’s physical location and not meeting with prospects face to face you are doing inside sales.
This is the opposite of the definition of outside sales. According to the US Department Of Labor, an employee is engaging in outside sales when they are “customarily and regularly engaged away from the employer’s place or places of business.” Outside sales professionals spend most of their day traveling and meeting prospects and clients (usually C-level executives) face-to-face. As an outside sales rep, you’ll work autonomously outside of a formal office for the majority of your time.
2. Differences in Skills Needed
While there are similarities between the two roles, there are distinct differences between inside and outside sales and the skills that are required to be successful.
When it comes to inside sales, to be successful:
- You must be comfortable in a fast-paced selling environment making dozens of phone calls each day
- You must be good at multitasking since you will probably be constantly switching between accounts and software, more so than in outside sales
- You must be good with words, have a solid understanding of the importance of terminology, and be able to verbally articulate your product or service engagingly without having to be face-to-face
- You must be ok with working in an office environment that sees little variation in day to day activities
- You must be good at collaborating and interacting with teammates frequently
To be successful in outside sales:
- You must be confident and outgoing in social and face-to-face situations, especially when it comes to meeting with CEOs and other executives.
- You must have high emotional intelligence (or EQ) since you will be interacting with people in person.
- You must be comfortable working alone in the field and have a high level of independence.
- You must be able to easily adapt to changing surroundings since you will be going to different places every day.
- You must be able to be flexible in your daily schedule. If a meeting gets canceled or delayed, you have to be able to think quickly and make effective use of that time.
- You must be willing to prospect independently and set all of your own appointments.
- You must be comfortable dressing to impress every day. In outside sales, your appearance makes almost as much of an impact as what you are selling.
3. Length of Sales Cycle
Another big difference when it comes to inside sales vs outside sales is the length of the sales cycles. Once you understand the difference between the sales cycles in each environment, you will more than likely determine you favor one over the other.
In inside sales, a transactional sales model that revolves around lower-value deals and shorter sales cycles will be used. You will talk to your prospect fewer times, talk to fewer decision-makers per sales, and not be focused on forming a long-term business relationship. The sales cycle for inside sales is more streamlined and usually happens in less than 90 days. It is more about the volume of sales versus the size of the sales.
In comparison, outside sales has a significantly more in-depth and longer sales cycle that is often referred to as a relational sales model. The goal is to build rapport and form a lasting business relationship with the decision-makers. For each prospective new client, you will be meeting or speaking with an average of 5.4 stakeholders on multiple occasions, all of whom will have a say in the final deal. This means the average sales cycle for outside sales will usually be over 90 days, even with streamlined processes.
4. Differences in Sales Technology
Advancements in technology have brought sales software farther than ever before. There are now tools available that make daily tasks more streamlined and accurate, improving efficiency and productivity. But, the necessary and most effective tools vary differently between inside sales and outside sales.
With inside sales, activity automation is usually the number one goal when it comes to the specific technology used. The foundation is an efficient Customer Relationship Management (CRM) platform where all of the customer information is held and organized. As well as every interaction you have with a customer, and every other important aspect of your sales funnel. Other valuable tools for inside sales include automated dialers and email automation with tracking.
Outside sales reps, on the other hand, will rely more heavily on technology that optimizes their efficiency out in the field. While they do also use a CRM (a mobile-friendly version, of course) to organize customer data, a tool like a territory mapping software that offers optimized routing is going to be their main go-to. Other important technologies for outside sales include territory prospecting tools to find new possible customers and content sharing applications to provide insightful product information on the go.
There are differences when it comes to compensation and inside sales versus outside sales salary. Depending on the sales commission structure, outside sales professionals normally receive a higher base salary and commissions compared to inside sales reps, even as an entry-level rep. This is due in large part to the fact that deals closed by outside sales reps are usually significantly higher in value compared to deals closed by inside sales reps. According to ZipRecruiter, as of March 9th, 2020, the average annual salary of an outside sales rep in the US, before commissions, is $53,366. Outside sales reps will also often receive compensation for other expenses, including travel and client meeting costs.
Even though it may be lower, inside sales reps rely on a more stable salary or hourly pay. The average annual wage for inside sales reps as of March 9th, 2020 is $49,196. With inside sales, like outside sales, you will probably also receive a percentage of commission on the sales you sell as well.
6. Quantity Versus Quality
When you ask experienced sales professionals what a big difference between inside and outside sales is, you may hear that it is quantity versus quality. Inside sales reps do not have to contend with travel and logistics. So, in that role, you are not as limited to the number of calls and contacts you make in a day as compared to outside sales reps. Inside sales reps make 42.5% more calls than outside sales reps. With inside sales, the price point of what is being sold is usually lower, and you are not focused as much on building long-term relationships, so inside sales reps do not focus on quality as much as they do on quantity.
In comparison, outside sales reps focus on higher-priced products and services that are often more complex. That’s why client meetings will be face-to-face to meet with the right people, building rapport and developing strategic relationships, and providing solutions to more complex pain points for the customer. In outside sales, it is impossible to meet with the number of people that an inside sales rep would call in a day, so the focus is on higher quality meetings versus a large quantity. This is why outside sales reps have a 30.2% higher close rate compared to inside sales.
7. Different Quotas
Both inside and outside sales stray far from 100% quota attainment. However, the more of your sales reps can reach quota attainment, the better your company can run. Plus, the size of the quota helps determine how successful your team is when you achieve it.
The average percent of reps, both inside and outside that reach their quota is a little over 60%. However, what this means is far different for inside than outside sales. Since outside sales have about a 28.6% higher quota on average than inside sales, their ability to meet quota as effectively as inside sales mean greater earnings for companies.
8. Difference in Schedules and Management
Typically, inside sales reps have a set schedule. Because they are reaching out to their prospects remotely, they don’t require much flexibility day-to-day. This also means that it is easier for leadership to know exactly where their reps are and exactly what they should be doing (i.e., reaching out to customers).
Outside reps, on the other hand, are at the mercy of their clients. Their schedule will change day to day based on when and where they need to meet their clients. They may start their day later, for example, if they are planning to meet a client for dinner or late drinks. It also makes it difficult to keep tabs on their reps day-to-day. Managers cannot oversee their reps to make sure they are as productive as possible each day.
As a result, outside sales is a more results-based sales job. Inside sales reps can point to the number of calls or emails they make in a day and their managers’ oversight to show that they’ve put in the work, but outside sales reps lack the same amount of oversight and accountability and prove their worth in their sales. It requires much more self-motivation and trust than inside sales.
How to Decide if Inside or Outside Sales Is Right for You
Depending on your business goals, your company may want to choose inside or outside sales. Businesses that benefit from inside sales include:
- Products under $35,000
- Faster sales cycle
- Primarily digital
- Goals include reaching as many new prospects as possible
Outside sales, on the other hand, works well for companies that:
- Products over $35,000
- Longer sales cycles with more elite market
- Require in-depth setup and longer onboarding process
- Goals include creating ongoing relationships with customers
However, most companies find they benefit from having both inside and outside sales. Inside and outside sales teams come with different strengths, and most businesses need both to run a successful sales team. Most companies should harness the assets of both inside and outside sales to complete their team.
There are various structures that you can use to set up your team to utilize their strengths. Depending on your business and sales goals, you can choose the one that works best for your company.
Depending on your products and business, a separate inside and outside sales team with no overlap could work well for you. Inside and outside sales can have different leads and prospects, quotas, and goals.
This structure works well for teams that have very different products. For example, if you have products for both small-to-medium-sized businesses and enterprises, the two sides of sales can take the two different types of deals. Inside sales can easily handle the smaller business side, and outside sales can create the relationships needed for enterprises.
This model frees up your outside sales to concentrate on the larger accounts. They have the time needed to cultivate relationships with larger clients and land larger deals than if they had to do everything alone.
This structure still keeps inside and outside sales separate, but they work collaboratively. They work on the same leads together to and close deals as a team.
Working as a team has a lot of potential strengths, especially for companies that have a longer sales cycle that can be started remotely. The inside sales team can qualify leads and find prospects before the outside sales visit them. Inside sales can also help identify any pain points and key features that could benefit the outside sales team.
By working together, inside sales can help your outside sales team become more effective at making connections and land more deals. Outside sales can concentrate on closing deals, and inside sales can offer crucial support.
Many businesses are increasingly finding the lines between outside and inside sales blurring. Even before remote work and social distancing became the norm, more of the required job of outside sales required sitting at a desk and handling customers over the phone and online. Hybrid sales teams take advantage of this fact. Instead of having one team dedicated to inside sales and another to outside sales, their teams are expected to perform the tasks of both.
Lean teams, and teams that have sales areas far from their offices, can benefit from a hybrid model. However, they do require your sales rep to have more varied and specialized skills than if they were inside or outside sales alone.
A hybrid team also requires a different strategy than if they were in separate teams. Hybrid teams need to make the most of their time when they are both at the desk and out on the road. Streamlining their process by automating repetitive tasks frees up their time for selling, especially for their outside sales tasks. Likewise, reducing windshield time and other wasted time helps ensure that your team has time for both inside and outside sales.
Inside vs Outside Sales: Which One Is Better?
As you can see, not all sales roles are the same. However, the end goal of providing valuable solutions to answer the needs of prospects is universal. But, when it comes to inside sales vs outside sales, there are some distinct differences. Everything from where you spend most of your day to the skills needed to be successful in the tools you use daily.
Some companies find success using solely either inside sales reps or outside sales. In reality, though, the question for most companies isn’t why you should do inside vs. outside sales. They need to utilize both types of sales to be as effective and efficient as possible. Both types of sales teams offer specific advantages that companies can use.
It is important to have a clear understanding of the differences between inside and outside sales, especially when you are new to sales. This will help you decide which role might be the best fit for you and your sales career goals as well as giving you a better chance of being successful from the start.