The Demise of Outside Sales: Inside Sales Replacing Old-School Model

MDeverywhere’s sales reps use to spend their days driving from meeting to meeting trying to talk to busy medical professionals.

Restricted by geography and drive time, they often attended only a handful of appointments each week.

“Our sales reps spent more time driving from Point A to Point B than in meetings, which is where we needed them,” says Elin McNally, marketing director of the expert medical billing service company based in Waltham, Mass. “The overhead was high and the loss of time was unacceptable.”

MDeverywhere decided it needed to improve its sales process. So in 2007, the company switched to a high-velocity inside sales model.

What were the results?

Almost immediately, MDeverywhere’s appointments tripled, and it experienced a similar increase in closed deals. Geographic restrictions vanished, territories expanded, and the new inside sales team saw its opportunities explode.

“It was a logical transition,” McNally says. “Technology has significantly improved, making it possible to do almost everything remotely. Online resources like Skype, JoinMe, GotoMeeting and WebEx made virtual meetings more convenient and started to make face-to-face sales obsolete.  Plus, prospects felt a virtual meeting was less invasive, so they were more open to spend time with us ‘online’ to hear our message.”

How big is this trend?

After the stock market crash in 2009, a new wave of companies transitioned to the more profitable inside sales model.

Even as the economy has improved, inside sales continues to grow 3 times faster than traditional sales, according to the 2013 Inside Sales Market Size study conducted by XANT, The Bridge Group, ZoomInfo, Software Advice, and global sales strategist, Kraig Kleeman.

The amount of time field-based outside sales teams spend selling is shrinking while a rapidly growing group of companies build highly skilled professional inside sales teams to close deals remotely.

Sales reps may still need to meet in person on occasion to finalize a deal, but even outside sales reps are spending more time on the phone and selling on the Internet.

Inside sales reps spend on average 71 percent of their time selling remotely compared with outside sales reps who are now spending about 41 percent of their time selling remotely, according to the market size study.

Why is the sales industry changing?

The competitive advantage of outside sales reps has become relatively less important as a result of growing trust in e-commerce. Field sales reps have up until recently been better able to develop relationships with clients in face-to-face meetings, but that is no longer as important now that consumers are searching for product reviews and comparisons online and making connections virtually through social media.

The percentage of adults who researched a product or service on a typical day increased from 9 percent in 2004 to 21 percent in 2010, according to the Pew Research Center’s Internet and American Life Project.

Experts predict the trend will continue to move away from outside sales.

“Field sales can be unwieldy and expensive. Sales managers have a hard time monitoring field reps’ behavior while they are away, improving the relative value of easier-to-monitor inside sales reps. Other factors, such as increasing e-commerce and changing buying approaches, suggest that companies should be hiring relatively more inside sales reps, making inside sales an increasingly high percentage of sales departments,” the market size study research team reported.

How do you foresee your sales model changing in the coming months and years? Has outside sales become an outdated approach?