Inside Sales vs Outside Sales: Understanding the Core Differences (B2B)
Inside sales vs outside sales—what's the difference? And more importantly—which one's better?
Spoiler alert: The answer is neither. You can find success with both inside and outside sales approaches. The trick is finding the right one for your unique skill set, company, and/or sales goals.
This guide will examine the core differences between these types of sales, so you can decide which is right for you and your sales team.
Learn what each approach entails, its advantages and disadvantages, and the various sales tools both types need to drive B2B sales success.
Sound like a plan? Let's dive into the wild, wild worlds of remote selling (inside sales) and field sales (outside sales).
What is Inside Sales?
What does inside sales look like IRL?
If you join an inside sales team (like ours at Close), you'll either report to an office or work remotely, sit at a desk, and engage potential customers in sales conversations via some form of technology—phone calls, email, social media, etc.
This sales approach is very different from the outside sales approach. The sales activities and jobs you'll complete will largely depend on the approach your team chooses.
The inside sales process is popular in the B2B space, especially when 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 close deals. Let's take a closer look at the process:
- Search For Leads: One of the hardest jobs inside salespeople do is prospecting, i.e. the act of searching for leads. There are tons of ways to do this. For example, you could scour LinkedIn for prospective buyers.
- Talk With Prospects: Once you find leads to contact, you have to reach out and, ya know, talk to them. Call them on the phone or send a quick cold email or LinkedIn message. Either way, you'll need to have polished sales skills.
- Record Data in a CRM: After the conversation ends, you'll want to record contact information and other important details in a customer relationship management (CRM) tool. Doing so will give you access to important metrics and help you assess the next steps. For example, after analyzing your CRM, you may find that you've talked to a prospect multiple times. In this case, you might offer a product demo in the near future, or employ another inside sales tactic based on the information you've collected.
- Move Prospects Through the Sales Pipeline: This part is the heart of inside sales. Inside sales reps will host demos, set up sales presentations, work to overcome objections, and move prospects towards the close.
Like anything, remote sales has pros and cons. Next, we'll examine the advantages inside sales representatives enjoy.
Advantages of Inside Sales
So, what makes the inside sales model so great? Here are a few of the biggest advantages:
- 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. Why? Inside sales reps don't accrue travel expenses. Gas, flights, and hotel rooms add up. It's much cheaper to make sales calls than it is to meet with prospects face-to-face.
- Efficient Sales Cycles: 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 rainbows and butterflies. There are disadvantages to the inside sales model, too. Here are three drawbacks:
- Lead Quality is Crucial: 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 Might Suffer: Unlike outside sales reps, inside sales reps sit behind a desk all day. Their on-the-clock hours are structured, which some people find tedious. This can lead to low motivation levels. Inside sellers can switch things up by tackling different sales activities—but even this isn't enough for some people.
- Relationship-Building Challenges: Finally, cold calling, cold emailing (BTW, if you do not know how to write cold emails, check out our AI tool), and social media will let you 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 building relationships a bit tricky. And since relationships are the cornerstone of healthy business development, this is a definite drawback.
What is 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. Why? Reps must develop deeper customer trust in order to sell these kinds of things. And it's easier to build trust during in-person meetings.
In short, 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 daily:
- 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 as possible.
- 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—literally in-house. 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 difficulty closing deals—especially if they sell expensive products 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.
- Manage Customer Data: Outside sales reps also use CRMs, but they may spend more time inputting data into several systems, as many meetings occur in-person. To explore the world of B2B CRMs and their transformative impact, dive into our detailed article on the subject.
Now, we'll look at the advantages and disadvantages of outside sales.
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:
- 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 is an amazing perk.
- Deep Prospect Relationships: The outside sales model allows reps to build deeper relationships with their prospects. As we've already discussed, deeper relationships often 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. Higher 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:
- 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, with their exclusively digital channels.
- More Decision-Makers: Outside sales reps sell big-ticket items. Because of this, multiple decision-makers are often involved in the deals, which tends to lengthen sales cycles and put 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 put a dent in your department's budget. And because outside sales cycles are long, they might pay these expenses for a while before seeing any reward.
There's also the impact of world-wide events such as natural disasters (think hurricanes, train derailments, and COVID.)
These types of events can impact how outside sales representatives can (or can't) meet with prospects. Sometimes, making the shift from outside rep to inside rep is a difficult, but necessary transition.
While we hope to never experience another global pandemic, the fact remains: Outside sales is more affected by external factors.
5 Key Differences Between Inside and Outside Sales
So, who wins the inside vs. outside sales debate?
There is no winner. Each can be a viable sales strategy when deployed effectively. 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. It's a completely different sales experience.
2. Sales Activities
The actual tasks that they do vary, too.
For example, most inside sales reps source their own leads, whereas outside sales reps 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 phone, email, text messaging, LinkedIn, Slack channels, and so on. This is less important for outside sales.
3. Length of Sales Cycle
We've already talked about it, but it bears repeating: The outside sales model usually involves longer sales cycles. This is because outside sales reps work with expensive physical products and services—which require approval from multiple decision-makers.
The inside sales process, on the other hand, typically results in shorter sales cycles because the products/services cost less, and buying decisions can be made by a single person.
4. Average Close Rates
Most inside sales reps have low close rates, while outside sales reps tend to boast high close rates. It's not because outside sales reps are better at their jobs. It's because inside reps focus on quantity, while outside reps focus on quality.
Inside sales produces tons of low-cost leads. As such, inside sales reps contact more people on a daily basis, many of whom don't convert. It doesn't really matter, though, because they haven't invested a ton of resources into each lead.
Then there's outside sales. Reps have to travel to each prospect, which is expensive. This is why they only sell to red-hot buyers—it helps them close a higher percentage of deals.
5. Revenue Potential
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 reps in each camp have different sales tasks.
Inside reps sell from a remote location, which helps reduce costs, but doesn't lead to many blockbuster deals. Outside sales activities include traveling to prospects (expensive!!), but often result in deeper customer relationships and bigger sales.
Remember: 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 certain tools to accomplish your daily tasks efficiently. 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 and flex your communication skills. Call them on the phone, send an email, or shoot a text message. You can also use video conferencing apps like Zoom, or dedicated field sales software. Check out our list of the most important tools to have in your sales stack this year.
- Social Media Platforms: Modern sales professionals also use social media to connect with buyers. In fact, studies show that 78 percent of social media-using salespeople outsell their peers. LinkedIn is an especially useful option for B2B sellers, simplifying a variety of lead generation, outreach, and messaging tasks. For B2C sellers, platforms like Instagram and TikTok are effective digital channels.
- CRM Solutions: Customer relationship management (CRM) software is key for both inside and outside sales reps—and the sales managers they report to. With this tool, you can track your leads through the entire buyer's journey, use automation to optimize the sales process, and analyze important metrics that will help sharpen your communication. The best CRMs for sales teams also offer built-in communication tools like calling, emailing, SMS, 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 powerful features. Interested in inside sales? Use the proven templates and built-in communication features. Want to take an outside sales approach? Easily score leads and manage your pipeline inside the Close platform.
Which Sales Method Should Sales Leaders Choose?
Comparing inside to outside sales is like comparing apples to oranges. Some like one, some like the other—and some sales teams like both! Truth is, field sales is becoming less common, but it's still a fantastic strategy for many companies.
Start by considering what your competitors choose—and then, maybe try out both. You might find a mix is your best bet.
Whether you sell the latest and greatest SaaS product, financial services, real estate or more—via inside or outside sales—you can sell better with Close. Sign up for a free 14-day trial to test us out.