Inside Sales vs Outside Sales: Understanding the Core Differences (B2B)
Inside sales vs outside sales… What's the difference between these two types of sales? And more importantly, which one is better today?
Spoiler alert: the answer is neither. You can find success with both inbound and outbound sales approaches. The trick is finding the right one for your unique disposition, company, and/or sales goals.
In this guide, we'll examine the core differences between inside and outside sales.
Keep reading to learn what each approach entails, the advantages and disadvantages between them, and the various tools that both approaches need access to, in order to thrive in a B2B sales environment.
Does that sound like a plan? Then hold onto your hats and glasses; we're about to dive into the wild, wild worlds of remote selling and business to business field sales. Let's go!
What is Inside Sales?
What does inside sales look like IRL? Well, if you join an inside sales team (like our very own here at Close), you'll either report to an office of some kind or have a remote position, sit down at a desk, and attempt to engage potential customers in sales conversations using some form of technology—a phone, email, social media, etc.
This approach to sales is very different from the outside sales approach, which we'll talk more about in a minute. For now, just know that the sales jobs you'll be asked to complete will largely depend on the approach your sales team chooses.
The inside sales process is popular in the B2B space, especially when it comes to selling SaaS. This isn't a hard and fast rule, though. Companies in a variety of industries employ inside sales professionals.
What Does an Inside Sales Rep Do?
Inside sales reps search for potential customers, work to engage them in sales-related conversations, and then attempt to close deals. Let's take a closer look at this process:
- Search For Leads: One of the hardest jobs inside salespeople are asked to complete is prospecting, i.e. the act of searching for leads. There are tons of ways to do this. You could, for example, scour LinkedIn for prospective buyers.
- Talk With Prospects: Once you find leads to contact, you have to reach out and, you know, talk to them. You can do this by calling them on the phone or by sending them a quick cold email or LinkedIn message. Either way, you'll need to display polished sales skills.
- Record Data in a CRM: After your conversations end, you'll want to record the important details in a customer relationship management (CRM) tool. Doing so will give you access to important metrics and help you assess next steps. For example, you may find, after analyzing your CRM, that you've talked to a prospect multiple times. In this case, you may offer to give them a product demo in the near future. Or deploy some other inside sales tactic based on the information you've collected.
Like anything, remote sales has its pros and cons. In the next section, we'll look at the numerous advantages that inside sales representatives enjoy.
Advantages of Inside Sales
So, what makes the inside sales model so great? There are many advantages to this approach. Here are a few of the most important ones…
- More Flexibility: Inside sales professionals generally have more flexibility in their day-to-day operations than their outside sales counterparts. For example, inside sales reps can work from different locations and use a variety of communication channels.
- Fewer Expenses: Inside sales jobs, such as those held by account executives, represent a smaller cost to their companies. This is because inside sales reps don't accrue travel expenses. Gas, flights, and hotel rooms really add up. It's much cheaper to make sales calls than it is to visit prospects face-to-face.
- Efficient Sales Cycles: Lastly, inside sales reps usually enjoy shorter sales cycles than outside sales reps. Why? Two words: deal size. Inside sales reps typically sell lower priced products, which allows them to streamline the sales process, rely on less personal communication channels (like email), and experience less stress per sale.
Disadvantages of Inside Sales
It's not all sunshine and rainbows. There are a few disadvantages to the inside sales model, too. Here are three drawbacks you should be aware of…
- Lead Quality: It can be difficult to pinpoint your best leads when you don't take face-to-face meetings. Because of this, most inside sales reps have a lower close rate than outside sales reps, who attend in-person meetings on a daily basis.
- Rep Motivation: Unlike outside sales reps, inside sales reps sit behind a desk all day. Their on-the-clock hours are very structured, which some people find tedious. This can lead to low levels of motivation. Fortunately, inside sellers can switch things up by tackling different sales activities. But this isn't enough for some people.
- Building Relationships: Finally, cold calling, cold emailing, and social media will allow you to easily connect with prospects—even if they live on the other side of the world. But these communication channels aren't as personal as in-person meetings, which can make the relationship building process a bit tricky. And since relationships are a cornerstone of healthy business development, this is a definite drawback.
What is B2B Outside Sales?
If, for example, you travel to an industry conference, schedule a face-to-face meeting with the CEO of Company XYZ while attending a general session, and then pitch your company's product to this person during your meet-up, you've engaged in outside sales.
Outside sales teams are usually employed by companies selling big-ticket items, such as solar panels and enterprise-level software. This is because reps must develop deep customer trust to sell these kinds of things. It's easier to build trust via in-person meetings.
In a nutshell, closing deals worth tens of thousands of dollars is easier to do via outside sales.
What Does an Outside Sales Rep Do?
As mentioned above, B2B outside sales representatives have very different job descriptions than their inside sales counterparts. Here's what field sales reps do on a daily basis:
- Manage Their Sales Territory: Outside sales reps are given specific territories, i.e. geographical locations, to sell in. Their job is to manage these territories effectively and extract as many sales from them as they possibly can.
- Travel to Meet Potential Customers: The biggest thing separating outside sales reps from inside sales reps is travel. Inside sales reps sell from behind a desk. Outside sales reps go to trade shows and other industry events, as well as the personal office spaces of potential customers, to attend in-person meetings and close deals.
- Build Deep Relationships With Leads: To succeed with the outside sales model, reps must build deep relationships with their leads. If they don't, they'll have a hard time closing deals—especially if they sell expensive products and/or services. To help with the relationship building process, you'll often see outside sales reps engage with prospects in non work-related locations, such as restaurants and golf courses.
Outside sales has pros and cons, just like inside sales does. In the next section, we'll take a look at the top three advantages of the outside sales model.
Advantages of Outside Sales
Why would anyone want to be an outside salesperson? Because the benefits associated with this career path are awesome. Here are three advantages field reps enjoy…
- Less Monotony: The life of an outside sales rep is rarely boring. They get to meet with new people on a regular basis and travel to different locations—all on their company's dime. And, because of the varied nature of their jobs, field reps often set their own schedules, too, which most people can agree is an amazing perk.
- Prospect Relationships: The outside sales model allows reps to build deeper relationships with their prospects. As we've already discussed, deeper relationships can lead to larger deal sizes. They also help reps meet sales quota more consistently.
- Bigger Deals / Higher Commissions: Outside sales teams generally sell expensive products and/or services. High pricing usually leads to greater profitability. And when the company you work for is more profitable, they'll be able to compensate you better. Imagine earning a fat commission check every time you bring in new business!
Disadvantages of Outside Sales
Before you go all-in on outside sales, take a look at the disadvantages of this type of sales…
- Less Time Selling: Field sellers travel from prospect to prospect. This allows them to experience new and exciting things. But it can also keep them from closing deals at a consistent clip. If you get into outside sales, expect to spend less time selling than inside sales reps who exclusively use phone calls, emails, and other digital channels.
- More Decision-Makers: Outside sales reps sell big-ticket items. Because of this, multiple decision-makers are often involved in the deals that outside reps generate, which tends to lengthen sales cycles and put some deals in greater jeopardy. According to Gartner, an average of 6 to 10 people are involved in every B2B sale.
- A More Expensive Approach: Finally, outside sales is more costly than inside sales. Your company will have to pay for your travel expenses, which can really put a dent in your department's budget. And because outside sales cycles are often long, they may be paying these expenses for a while before they see any kind of reward.
We also need to mention the pandemic.
COVID-19 shut down the entire world. This meant that outside sales representatives weren't able to meet with prospects face-to-face like they did before. Making the shift from outside rep to inside rep was a necessary, but difficult transition for many people.
While we hope to never experience a global pandemic again, the fact remains: outside sales is more affected by external factors than inside sales is.
Key Differences Between Inside and Outside Sales
So, who wins the inside sales vs. outside sales debate?
Honestly, there is no winner. Each can be a viable sales strategy when deployed in an effective way. Your job is to figure out which approach will work best for you. To help, we've listed the five key differences between inside and outside sales:
The biggest difference between inside and outside sales is where the sales process takes place. Inside sales professionals sell from remote locations, such as company headquarters or personal office spaces. Outside sales professionals meet with potential clients face-to-face, which leads to a completely different sales experience.
The actual tasks that inside and outside sales reps are asked to complete vary, too.
For example, most inside sales reps source their own leads. Outside sales reps, on the other hand, may be given leads by canvassers and other lower-level employees.
Also, inside sales reps need to effectively communicate on a variety of digital channels, like the phone, email, text messaging, LinkedIn, Slack channels, etc.
Length of Sales Cycle
We've already talked about it, but it bears repeating: the outside sales model usually results in longer sales cycles. This is because outside sales reps often sell expensive physical products and services—both of which require approval from multiple decision-makers.
The inside sales process, on the other hand, typically produces shorter sales cycles because the products/services sold cost less. Therefore, buying decisions can be made by a single person.
Average Close Rates
Most inside sales reps have low close rates, while outside sales reps tend to have high close rates. It's not because outside sales reps are better than their inside sales counterparts. It's because inside sales reps focus on quantity, while outside sales reps focus on quality.
Here's what I mean: inside sales produces tons of low-cost leads. As such, inside sales reps contact more people on a daily basis, many of which don't convert. It doesn't matter, though, because inside sales reps don't invest a ton of resources into each lead.
Outside sales is different. Reps have to travel to each prospect, which is expensive. This is why they only sell to red-hot buyers, which helps them close a higher percentage of deals.
Let's talk about money…
Inside sales reps usually sell lower-priced products and services, whereas outside sales reps sell high-end offerings with hefty price tags. Again, this is one of the main reasons why sales reps in each camp are asked to complete different tasks.
Inside reps sell from a remote location, which helps reduce costs, but doesn't lead to many blockbuster deals. Common outside sales activities, however, include traveling to prospects, which can be expensive, but often results in deeper customer relationships and bigger sales.
It's important to remember that inside sales isn't better than outside sales or vice versa. Different sales organizations use different tools and strategies to achieve different goals.
Essential Tools For Both Inside and Outside Sales Teams
It doesn't matter if you're an inside or outside sales rep. You need tools to accomplish your daily tasks in an effective and efficient way. Most of the top-rated solutions fall into one of three categories: communication tools, social media platforms, and CRM solutions.
- Communication Tools: You won't make many sales if you don't talk to qualified leads. Fortunately, there are plenty of ways to engage potential customers in 2022. You can call them on the phone, send them an email, or shoot them a text message. You can also use video conferencing apps like Zoom to connect with prospects. Here's our list of the most essential tools to have in your sales stack this year.
- Social Media Platforms: Modern sales professionals use social media apps to connect with buyers, too. In fact, studies show that 78% of social media-using salespeople outsell their peers. LinkedIn is an especially useful tool for B2B sellers, simplifying a variety of lead generation, outreach, and messaging tasks. For B2C sellers, platforms like Instagram and TikTok can be effective digital channels.
- CRM Solutions: Customer relationship management (CRM) software is absolutely essential for both inside and outside sales reps—and the sales managers they report to. With this kind of tool, you'll be able to track your leads through the entire buyer's journey, tap into automation to improve the sales process, and analyze important metrics that will help you sharpen your communication skills. The best CRMs for sales teams actually function as communication tools as well, and have built-in calling, emailing, texting, and video conferencing features.
Speaking of CRM solutions, have you tried Close yet?
Close is the ultimate CRM for high-growth sales teams, thanks to its intuitive interface and game-changing capabilities. Interested in remote selling? Use the proven templates and communication features inside Close to make sales from a distance. Want to take an outside sales approach? Easily score leads and manage your pipeline with Close as well.
Whether you sell the latest and greatest SaaS product or tried and true financial services, you can sell more with Close. Sign up for a free 14-day trial today to see if Close is right for you.