Thinking of Adding Inside Sales?
In most organizations, the sales function has been built over time, and improvements are made in an ad hoc fashion as needs arise. Unless there is a merger, acquisition, or some other compelling circumstance, it’s uncommon for companies to step back and evaluate the design of their sales function in an objective, comprehensive way.
Today we are facing a compelling circumstance that is causing organizations to rethink the design of their sales function: COVID-19. From moving all sales inside to hybrid models based on customer segmentation, organizations are evaluating whether the ways in which they have done business in the past are still relevant, feasible, and financially prudent—for today and for the future.
True story. I had an opportunity to work with the new president of a high-tech company. As he evaluated the organization, a few things stood out to him: the very high cost of sales, declining margins, and slow revenue growth. He saw that 80% of their account base had little interaction with them. He turned his attention to the sales team, which was 100% outside sales. Because he was not emotionally attached to the original design, it was easy for him to evaluate the function in an unbiased manner. He concluded that the organization needed account segmentation, to cut back on outside sellers, and to build an inside sales function. At a minimum, he calculated, the return on that redesign would be better account penetration and increased revenue. Nonetheless, he faced a real challenge. There was a very strongly held belief within the sales organization that the company’s products could not be sold over the phone due to a fixed notion that the portfolio was too complex. For this reason, the organization also would not allow new sellers to go solo for a full year, insisting they ride along with experienced salespeople during their first year.
The new president firmly believed that with the right resources, training and technology, the company could definitely implement an inside sales function. However, the more he drove his vision the more the product line VPs rebelled and dug in their heels. They allowed emotions to cloud their judgment and could not rationally consider the situation and possibilities. He also needed resources to perform cluster analyses on his accounts, research and implement the required technologies, and build a sales training program. But he was unable to find those resources within his organization to execute his vision and the work needed to bring it to fruition.
The president of this high-tech company faced a big challenge—something that is often overlooked in sales outsourcing: the change management element.
When attempting to drive significant change, sales leaders (especially those dealing with deeply-rooted paradigms) need to understand that a company specializing in sales outsourcing will have the resources and expertise—not to mention an objective, un-emotional perspective—essential to supporting their efforts. This is what these companies do every day. With sales outsourcing, sales leaders can launch into new areas without disrupting the current sales operation or losing control of the process.
In the past, sales outsourcing has been seen as strictly a cost-cutting option similar to offshoring IT services. While cost reduction may be one important outcome of sales outsourcing, the real value lies in access to a full range of capabilities—many of which are not readily available in most companies—to drive such a transformation. From statistical account segmentation, sophisticated coverage modeling, and a turnkey technology stack to process mapping, training development, and objective continuous performance improvement, sales outsourcing puts powerful tools in the hands of senior leadership. And, it offers the competency to recruit, retain, and drive the performance of top sellers.
The Rest of the Story
MarketSource fully supported the president’s vision by designing and implementing a hybrid sales function with outside and inside sellers. The payoff for the president was deeper account penetration and sales resource availability, increased revenue and customer satisfaction, and reduced cost of sales. And, he proved that his company’s product lines could be sold through inside sales by using resources that provided mere weeks of training—forever shattering the paradigm.