What if you could crush your sales quota while cutting your sales expenses by more than half? As a growing number of fast-growth and forward looking companies are now discovering, you can.
This impressive performance is tied to a trend known as “virtual selling” or “inside sales.” The field of inside sales is now growing at 5% annually in the U.S., according to the Bureau of Labor Statistics and InsideSales.com. In fact, the number of inside sales reps is expected to reach 2.5 million in 2015. That’s three times faster than the growth of the field sales profession (which now has an estimated 8 million members).
What explains this astounding growth? One factor is clearly the superior return on investment many firms realize through their reliance on virtual selling models and approaches. While budgeting for inside reps remains 62% lower than for outside reps, an expanding number of companies are banking on the virtual selling model.
It’s also clear that many professional salespeople value the opportunity to meet their targets without having to spend a great deal of time in transit. That’s enabling companies to attract talented and experienced sales people who are capable of closing increasingly large deals at a distance.
Finally, a series of “sales acceleration” technologies are in play. According to the 2014 Sales Acceleration Study by InsideSales.com, companies are even starting to spend slightly more on inside sales in terms of technology than they are on field reps. With research suggesting that aggressive technology investments in virtual selling are resulting in bigger deals, faster deals, and higher close rates, it seems likely that the commitment to inside sales will only become more pronounced over time.
Yet another marker of this trend is the membership growth of the American Association of Inside Sales Professionals (AA-ISP), which holds its annual Leadership Summit next week in Chicago. Founded in 2008, the association now boasts 7,500 members worldwide with a compound annual growth rate of 100%.
Bob Perkins, president of the AA-ISP, contends that virtual selling thrives in an environment where buyers are more informed than ever. Indeed, it’s no longer necessary to have as many face-to-face meetings when sellers and buyers are able to establish trust without a face to face meeting.
The advancement of the inside sales profession, adds Perkins, can be linked to enhanced training and support, as well as technology that facilitates customer research, call completion, and even screen sharing in the midst of a virtual meeting.
Given the striking performance of inside sales teams in recent years, Perkins notes that one big trend organizations now face is “the struggle to hire and onboard quality talent.”
Oracle, an active AA-ISP member, is one organization feeling that pressure. “The challenge facing inside sales leaders around finding qualified talent is staggering,” says Paul Macura, vice president of Oracle Direct. “In essence, today’s inside sales person has to not only have phone, email, and Internet competencies, but also the ‘chops’ once seen in the very best field sales people.”
Perkins contends that what is needed now is a new leadership model for inside sales. This model, as he sees it, has three main dimensions.
People focused. Expert at sourcing, hiring, training, and career development.
Process proficient. Advanced in the management of sales process, measures, and tools.
Professionally minded. Acting as a thought leader and advocate for the profession.
Successful leaders, he says, will “embrace the change ahead.” They will negotiate an environment in which demand is high and supply of skilled inside sales reps is low. “The ceiling is rising from a career standpoint,” he adds. “The demands in terms of skills and competencies are growing.”
Of course, some sales leaders continue to resist this shift. “[M]any sales leaders have a personal bias toward deploying outside salespeople over inside sales,” writes Steve W. Martin, a sales specialist associated with the USC Marshall School of Business. “In some cases, this inclination was based on their own experience from many years ago when they were in field sales.”
Nevertheless, Martin’s research suggests that companies in high technology and business services have been particularly quick to adopt virtual selling. Asked to rank the most influential factors behind their investments, they pointed to:
Increasing pressure on business performance and profitability (60%)
Technology advancements (54%)
Buyers more readily accept the remote selling process (47%)
Interestingly, 84% of respondents stated that inside sales models allow them to onboard new salespeople and share best practices more easily, while 79% stated that the model would enable their sales organizations to scale faster.
“Today, there is a changing perception among sales leaders about the strategic role inside sales performs,” contends Martin. “This change is due to the benefits that sales leaders believe the inside model provides in terms of scaling activity, growing the organization, and attacking specific markets.”