When you employ both an inside sales team and an outside sales team, how do you divide your sales responsibilities?
Without a clear definition of responsibilities, inside and outside sales reps can battle with each other instead of with the competition. If they battle over territories, customers and job roles, your customer gets caught in the middle.
You can assign responsibilities for your reps in a number of ways. I’ve successfully used these four divisions of responsibilities. I have applied them individually and in combination. You’ll need to evaluate your business and customers to decide what works best for you.
|Inside Sales||Outside Sales|
|Small Accounts||Large Accounts|
|Dormant Accounts||Active Accounts|
|Small Transactions||Large Transactions|
Prospecting vs. Account Management
Prospecting involves lead identification, lead follow up and lead qualification. It’s vital to maintaining your company’s health and growth. Prospecting activities often involve high-volume calling with a low success rate. Because of the low success rate, it generally does not make financial sense to prospect in the field. The return on investment in time and travel is not justified.
Prospecting activities are ideally suited for inside sales reps. Since your inside sales reps prospect their territories via the internet and telephone, they do not incur the extensive travel expenses that outside sales reps incur. More importantly, your inside sales reps can contact many more prospects and follow up on many more leads because they don’t spend time traveling from one prospect to the next like outside sales reps do.
Account management focuses on developing professional relationships which become the basis for expanding sales, cross selling and developing new opportunities in different parts of your customers’ organizations.
Outside sales reps are very effective at developing deep account relationships through personal interactions. During customer visits, they are able to develop relationships throughout an organization. This often results in their uncovering unknown opportunities and expanding sales. You can justify the higher cost of outside sales by applying the value of existing customers, the larger transaction sizes, and the higher likelihood of closing sales to your overall sales model.
Small Accounts vs. Large Accounts
Smaller accounts generate less absolute margin for your business. Their order sizes are generally smaller and they order less frequently. However, they are still valuable to your company. I use inside sales teams very effectively to manage smaller accounts. Your inside sales reps can manage a large number of small accounts and still drive a significant level of revenue and margin.
Each of your large accounts may be key to the success of your business. Their higher revenue potential and profit value demand a high level of attention from your team. Outside sales reps deliver the customer service and attention necessary to both develop the account and reduce the risk of losing a valuable customer.
Dormant Accounts vs. Active Accounts
Dormant accounts are accounts that have not placed an order with your company in over one or two years, depending on the length of your sales cycle. Accounts may have become dormant for a number of reasons: lack of need for your product, changing business conditions and economic conditions, or inroads by your competition. Given that now dormant accounts were once active accounts, you likely have existing relationships with these accounts. A good way to maintain or rekindle those relationships is to have your inside sales team call on your dormant accounts in an attempt to uncover latent opportunities and provide a level of customer service.
Active accounts require more direct contact. They are more valuable to your company than dormant accounts. If your active accounts are sufficiently large enough and important enough to your company, consider assigning outside sales reps to call on these accounts.
Small Transactions vs. Large Transactions
Finally, I’ve successfully managed territories by assigning sales responsibility based on transaction size. I assign smaller transactions (i.e., transactions under $10K) to my inside sales representatives and larger transactions, which tend to be more complex, to outside sales representatives. This enables the inside sales teams to focus on frequent “quick hits.” The outside sales reps spend the time needed to close larger, complex deals.
Whichever way you choose to define responsibilities between your inside and outside sales teams, make sure you communicate them clearly and leverage the strengths of each channel to drive revenue efficiently.
Next, we’ll look at sharing commissions and handing off accounts from inside sales to outside sales or vice versa.
For more information, contact Wallace Management Group at (203) 834-0143 or email David Wallace.
© 2010, David P. Wallace