In decades past, a salesperson was a salesperson. The role was responsible for finding prospects, turning them into customers and selling on an ongoing basis as they manage accounts. But that model is on the decline as companies find it ineffective for large accounts and too expensive for small accounts.
For the largest accounts, companies have turned to the strategic account manager role to provide a more consultative, strategic-oriented presence to their customers, and for the small accounts, companies have embraced inside sales to improve efficiency.
Inside salespeople make many more calls per day and are usually paid less than those in the field. (Both factors drive down the cost of sales.) Moreover, inside sales resources have proven to be efficient, effective and adept at harnessing technology to close the distance gap with their customers. Innovations such as “click to chat” options and video calls have made inside sales more accessible to their customers.
While inside sales reps usually aren’t as effective as outside sales reps (measured in revenue per call), these efficiencies more than offset the loss of effectiveness for many customer segments. Because of this, companies are adopting inside sales extensively.
Four Inside Selling Models
Although there’s no single definition of inside sales, these four models are the most prevalent:
1. Stand-alone inside rep: In this model, the inside salesperson is responsible for identifying, closing, retaining and upselling a defined set of accounts. She’s often assigned smaller accounts with lower sales potential or accounts in rural areas that are difficult for field salespeople to access. No teamwork is required between the inside rep and the outside field salesperson.
2. Inside/outside "teaming": The inside and outside representatives cover many of the same accounts in this model. The tasks in the sales process may be unofficially split up between the two roles to optimize the working relationship. The specific tasks each role performs, as well as who determines who does them, may vary by organization. Both roles are accountable for the results.
3. Lead generator: Companies using this model have an inside sales role that serves purely as a lead generator: finding new accounts, qualifying the leads and advancing the sale before handing it off to an outside seller.
4. Post-sale account manager: In this model, the inside sales rep steps in to manage the account after the field salesperson has made the initial sale. This scenario is common when there are significant “follow-on” revenues after the initial sale is made. The inside salespeople are accountable for retention, upselling, and possibly some account management and customer support activities. They may bring the field seller back into the account if a large opportunity emerges.
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Factors Influencing Your Sales Comp Plan
When it comes to establishing your company’s inside sales model, one size does not fit all. Many versions of the role exist, and along with that, the sales incentive plan must align with the role. A few examples of the elements that differ across sales roles include:
- Pay level: The stand-alone rep and the teaming rep are typically paid more than the others.
- Pay mix: The lead generator has less risk in his plan than the other roles because he’s less able to influence the final outcome.
- Metrics: For most sales roles, their main metric is revenue. However, for lead generators, success may be measured by the number of leads generated or the number of leads generated that turn into revenue.
- Plan structure: Inside salespeople who are hunting for new business often have a commission incentive in their plan, account managers may have a quota bonus and teaming reps may have MBOs in addition to other plan components.
As you consider adding or expanding your organization’s inside sales component, begin by clearly defining the inside sales role and the associated accountabilities. This approach will make determining the appropriate incentive plan much easier.
For more insight into designing and implementing an effective sales compensation plan, read our most recent book, “Sales Compensation Solutions.”