Channel sales · Inside Sales

Inside or outside sales?

Monica Zent Founder, CEO, Investor; Board Member, Advisor

January 6th, 2014

We are getting our sales underway and curious what the consensus is out there among fellow founders. For a cloud-based B2B offering, are people leaning more toward inside sales forces? Outside sales forces (e.g, kickstartsalesforce.com, etc.). What resources can anyone share about finding these? Any thoughts would be great. Thanks in advance!

Dave Angelow Board Member at HAND Austin

January 7th, 2014

In early stage I would recommend the sales process be internal.  The reason is there is a lot of learning about customers gained by interactions during the sales process - key customer objections, understanding true pain-points, how well the message/sales pitch resonates with the audience, actual sales process/key decision-makers, etc.

Additionally, the information gained would likely be a key input to updating your financial/business model on factors like conversion rate, sales cycle time, etc.

Hope this helps and ping me if you'd like more details

Biz/Product/Marketing

January 7th, 2014

Hi Monica, I think it depends on the situation. I put together a local/external based team for a local sales offering where I felt day to day contact with merchants would be important. The issue was that our offer/service required a lot of training AND it was easier for our reps to get customers via email/on the phone. We moved to an inside sales team and saw significant improvement. Training was easier and it was helpful to create a positive work environment and keeping the reps charged up in the face of "no"s. Again our target customer was SMB. Enterprise may require face to face. You can always try a blend and if I were to do this over again, I would start with the talent first -- find the best sales talent and let that drive where they should be located. Good sales talent is hard to find. Good luck!!

David Crooke Serial entrepreneur and CTO

January 6th, 2014

The best option entirely depends on your product and market. My experience from 3 startups: 1. Commission-only sales services / contractors rarely produce, no skin in the game. 2. Outsourced cold-calling works well, but use a US or Costa Rica based firm where people speak perfect American English with a US accent, cold calls from India over VOIP don't work. 3. Selling B2B from inside is great when it works - Convio's first paying customer was a national account, contract value around $50k, and we sold it

Alexander Ross Head of Business Development at Verifide

January 7th, 2014

Be aware that "inside sales" vs "outside sales" usually refers to telesales vs traveling to customers.

Jerrod Bailey Cofounder at ClickIPO Holdings, democratizing the IPO industry

January 7th, 2014

You'll want to consider outside sales teams ONLY if (1) you've proven how to sell using an in-house or founding team, and (2) your product does not require a steep learning and training curve.  You should also never be completely outside-based.  There is not enough control, and you're too far from your customer to learn or test new product rollouts.  Once you do go "outside", you'll need a team just to train and support those outside reps.  Maybe one internal employee for every 2-3 outside reps.  You can adjust this ratio over time if your outside team is (or isn't) producing.  You can also use sales enablement platforms (e.g. http://www.savogroup.com/) to help get marketing material distribution and sales opportunity tracking around that outside team.  

Brahm Singh Eng Head - Deep Search at Quixey

January 7th, 2014

I agree with Jerrod and Dave. Initially, the sales should be done internally. You might have to change your product/pitch a lot to see what works. There is a lot of learning that will happen along the way.

Trying to outsource it will make you lose on that learning and it will be difficult to change the pitch very often.

Cheers!

Monica Zent Founder, CEO, Investor; Board Member, Advisor

January 7th, 2014

Thanks to all of you FD's who responded above. Great input as always! My preference and experience has been with inside sales. It's where I'm most comfortable but having heard other entrepreneurs talking about outside sales more lately, I was curious what others thought. Glad to hear that you generally confirmed my gut.

 

Monica Zent Founder, CEO, Investor; Board Member, Advisor

January 9th, 2014

Hi Rob- Thanks for the follow-up note. I was using the conventional interpretation of the terms "inside"/"outside" as to sales force. For this offering (a cloud-based service for business), my approach favors inside sales and that remains the case after reading the feedback. I was curious about the circumstances in which an outside sales force is used and at what juncture. On the resources, I was referring to what resources one uses to source outside sales.  

Rob G

January 9th, 2014

Thanks Monica for the feedback.  For my current startup we are going with a combined inside/outside team from the start.  ours prospects are mostly enterprise though we think we can move down market as we gain market acceptance.   with a first-mover product we feel a need to do a lot of educating and hand holding early on.  our plan currently is to team 1 outside person with with 3-4 outside.  the challenge will be when we move to a national footprint.  Outside sales gets very expensive at that point. let me know if/how i can help. 

Rob G

January 7th, 2014

Monica, i think we could be more helpful if you could clarify a few points:

1. As Alexander mentions, "outside" sales simply means your sales staff (employed by you, not contracted/outsourced) gets out of the office and meets with prospects face to face.  "inside" typically means sales staff (employed by you not outsourced) does their selling over the phone/chat/email/skype, etc.  Is this consistent with how you are using the terms?  

2. If you don't mind sharing, what is 'average' one-time and/or lifetime value of your typical sale?  the answer is  probably the single most important factor in how you structure your sales team (inside/outside).  Reality is it is hard to make the numbers work to support an outside sales staff if the typical sale is less than $10k.  

3. when you say "What resources can anyone share about finding these? ", what "these" are you referring to?  Sales people? 

Note:  if you do go with an outside team it is almost always beneficial to also have an inside team, but not visa versa. Again, not knowing what you are selling and to whom (SMB? enterprise? tech? health? ed? ...B2B is pretty broad) it is hard to give reliable advise.