Inside Sales: The Inside Story

Hey everybody. Welcome to a new Rethink Sales roundtable. Today I am really excited because we're going to be talking about inside sales, the inside story. And what you're going to learn is that that story is continuing to change. So today's roundtable is going to be a little bit different. I'm going to be talking to you about inside sales and then at the end I'm going to be bringing Mark Danolo on with me and we're going to answer some questions. And so thank you to those that have sent some questions in advance and please be sure to use the Q and A feature in your zoom down at the bottom and send us questions throughout and we will do our best to answer all of them at the end of this session. Sales Globe A little bit about who we are. We are a problem solving firm for sales and we solve their biggest sales challenges. What's one of the biggest challenges we're facing right now? Well, it's what does my organization and my sales structure look like in this period of, well, COVID 19 and what's it going to look like in 2021? So we are helping companies with the selling model that they need to support their 2021 vision and strategy, helping them understand how their customers buying needs have changed and how they need to adjust and what their sales capacity looks like and expectations out of the team. We're also working on things like incentive compensation and quotas. All the things that you need to be planning for as you get into 2021. So let's get into some of the macro factors that are accelerating inside sales. When we started on this journey, gosh, it was over a year ago, I started writing a book on inside sales and what we found is pre, you know, like a few years ago, right. It was primarily the field sales role was the role of primary importance for all organizations. And inside sales might be something more like customer service and order taking. And what we have found is that there were four factors that started to change and impact how companies were viewing inside sales and the adoption. The desire to adopt inside sales by the CRO and CEOs within their organization. The first one, it started with the age of the informed buyer. So, you know, with the advent of the Internet, companies started to put their pricing out there. There was more information available as to what competitors were available for particular products and services that I wanted to buy. And that immediately started to change what sellers needed to be talking to their customers about when they went on site. And that led to some pressures for efficiency. So with increased competition, well, the pressure to be more efficient and manage my cost of sales, as I'm going out into the field and visiting more customers and trying to gain that market share grows, my cost of sales needs to come down. And then thirdly, the evolution of communications technology. And that would be platforms like what we're talking on today. So video, web conferencing and the ability to pick up a phone and talk to someone on video, it's become very easy, much more reliable and dependable, and very cost effective for companies. And finally, the globalization of business and of companies. So the desire for you to be where your customer needs you to be, him or her, when you need to be there, has continued to grow. So all these things caused us at Sales Globe to start really looking at inside sales and, and the different selling models that could be best support each organization based on their customers buying behaviors and the specific needs and the customer experience that they want to offer. Then enter Covid. Yikes. That really accelerated the desire for companies to look at inside sales. And boy, we get calls every single day about this. So how can we change our selling model? How does my field salesperson sell from the inside? And quick caveat on that one. Just because I am a field salesperson and I'm working from home or I'm working remotely and not able to go on site, that doesn't mean I'm an inside salesperson. So the roles you're going to find and the responsibilities are very different from what we call a field sales role to the inside sales. And we believe that that will continue, maybe be a bit of a hybrid, but the COVID acceleration and the drivers around that include the following. You've got air travel that has been eliminated by a lot of companies just due to safety and then again cost efficiency. Because revenues at many companies has dramatically changed as of Today, less than 30%, about 27% of companies are actually open in the United States. And that means that 75% of your buyers are working from home. So even if you could go on site, there's no place to really go. Another thing to think about though is what are they buying from you? So if companies are no longer at their place of employment, are you selling products and services that they may have needed there? So has what it is that you're offering changed as well? Another interesting fact is that FORTUNE did a survey of 90% of the Fortune 500 companies out there and about 38% of them don't even know when they are planning to reopen. So that's a big number and another 35% or so expect that they will be open by the end of Q2. So that leaves us with over half of companies potentially not even being open by the end of Q2 in 2021. When we look at sales globe, some of the drivers that CEOs are going to be looking at to make the decisions for their business. It's two big things that are driving those decisions. Fear and cost reduction. So the fear is around what does my revenue look like in 2021? Is Covid going to come back with a vengeance? And oh by the way, I only 5% of CEOs said that a vaccine is going to impact the decisions that they make for their business. Cost reductions are also going to continue to drive decisions not only of your company, but the companies that your salespeople are selling to cost reduction around, you know, how can I be most efficient? And there are certain products and services that you may be offering that maybe aren't necessary anymore. One other interesting thing is that we do believe though that there will be certain investments that company will be making. And will your company be ready for that? Now getting into that, when we look at the selling models, what we know is that Covid is moving us to these unknown sales models. So we're going to talk to you again. I'm going to cover with you the most common inside sales roles today. They haven't been eliminated. What field sales we believe is looking like today and what it could look like tomorrow and then how they could work together in May of 2019. What did we know? We knew that face to face was very critical for a field sales person. We knew that relationships and trusted advisor status was always key. And we also knew that there was this struggle about heavy non sales time. So there was a big focus to to decontaminate the field sales role. And that was one of the drivers again to why we were looking at some roles, responsibilities and maybe some products and maybe things like renewals were moving to an inside sales role. Put that into Covid. May 2020, 90% of sales has moved to the phone or web conferencing, video conferencing, tools. 50% of companies believe that that's actually even more effective than going on site, which is pretty crazy. And now what is it that we think is going to happen as we move into 2021? Well, we know that B2B technology, it's advancing three to five times faster than originally forecasted. This is a McKinsey study that came out in May of this year. And they basically said that companies are expected to move forward with their technology advancements and their technology transformations and three to five years quicker. And in the CEO survey that Fortune did, 90% of CEOs answer this question, 78% of CEOs confirmed that they are going to be accelerating their technology investments. That's going to be really important for us to think about as we think about 2021 and what products and services that you may be offering to help them with that. So unknown new sales models, that's really the end result too because we know that again, many of these companies, they're just not going to be open. So what are companies thinking? We talked a little bit about what some of the big concerns are, but there's really like six big things and today we're going to delve into two of them. Right? The big question is what the heck does my organization look like? And you know, how are we going to perform in the new normal? And that's where I said that at salesglobe, that's been a lot of our focus is working with companies on what's their structure going to look like in 2021, what do quotas look like, what does pay look like? And really how are people going to interface with their customers, what do the customers needs look like? And what do roles and rules of engagement look like internally? And what could be for you, a remote working environment. So six big questions. What and where is my total addressable market? The total addressable market that you had in 2020 and even 2019 we believe has changed for 2021. And then how you look at that total addressable market is going to be different. Because one thing that we do know is that about half of companies use historical decision making, right? So the revenue of yesterday to help forecast what's happening tomorrow in 2021 in this case. But we know that history is history and you're not going to be able to solve for it the same way in 2021. How have customers needs and buying behaviors changed? Because they're also at home, but also if they're working remotely, just how have the needs of the organization changed and then how do they want to buy from you now when they were used to this face to face interface, what does this do to my sales structure? We talked a little bit about that. For inside and field roles, we consult with a lot of global companies that have huge inside sales centers of excellence because that really is how inside sales is set up to be. And now those people are working from home. Some are Coming in, what we're hearing is that some of the junior folks are actually coming into the office that need additional training and others are continuing to work from home. So what is this going to do to my structure? And then how will we provide value and differentiate in a virtual environment? How is pay going to be impacted? We're going to talk a little bit about pay and the pay differentials between inside and field roles. But also think about this. If your field sales role is not traveling any longer and they're not getting on trains and they're working from their home, part of what their pay was based off of is it wasn't just how well they sold, but the lifestyle that it had for them. And a lot of people arguably in that role, they love to travel, but maybe not all the time. So does pay change as a result? And then how are quotas going to change? Gosh. We've talked to a couple of our Fortune 500 clients just this week and they both reported that they're not planning on having quotas next year. So we're going to work with them on how they can pay their team and. And then finally how the employee value proposition is changing and how do we keep people engaged. That's a tall order and a lot of things to talk about. So I expect we're going to be coming back and giving you more thinking around this. But today we're going to talk about the sales structure and roles and then pay incentives and quotas. Now, as you look at inside sales, what you want to do is have this balance of what we call customer experience and sales impact. And then you'll see there's 14 different considerations. So this isn't difficult. It's not a big lift. When you look at some of the things, they make complete sense. So we're going to discuss talk a little bit about sales impact and customer experience. I'm not going to go a lot into today, but just remember that customer experience, at the end of the day, it just defines why your customers want to buy from you. So the service that you're providing to them, that helps them understand and helps you understand why it is they want to buy from you. You'll see we've got go to market and operation considerations, things like segmentation and targeting. We will talk a little bit about that today. The offers, your sales process, your roles, rules of engagement and then operations. A big thing again for 2021 that has become a priority are the enabling tools and technology that your team is going to need, particularly if they are going to continue to work remotely. Sales impact, what is that? Right. So customer experience, we said, basically answers the question of how you want to service your customers. That gives them the answer why they want to do business with you. So sales impact is simply the key factor considerations that are going to help you build scalable, sustainable model. And we have found that there are five things that companies need to really be focused on when they think about sales impact. And that would be what your priorities are around job decontamination. And that means that, you know, are there things that your salespeople could be doing or you believe are doing that maybe they shouldn't be doing any longer and then how do you increase that capacity? So we talked about 50% of salespeople actually spend their time selling. What can we do to drive that number up your cost of sales? Again, we believe that's going to be a huge impact and consideration as companies are thinking about their models of selling. Your sales capacity ties in with the job decontamination, geographic reach and time zones. How important is that? And then getting productivity out of your team. The productivity has been a big concern that comes companies are talking about because when people are working remotely and they're not as in touch with their coach or their management team, are they getting the same productivity levels post Covid as they were pre Covid? Now as we're talking to companies, it's been a mixed bag. We've got some that are saying they've had very little impact and they've been really pleased with the results of their team and others that are saying they are starting to see some productivity wane. A coin that my partner Mark calls that bunny slipper fatigue. Right. So people aren't as motivated working from home anymore as they might have been, maybe even at the beginning. And then we've got the additional complexity of a lot of parents are homeschooling. So all those things are impacting your sales impact. Those the big five things that you need to be thinking about and your tolerance around those as you build an inside sales organization. So now let's talk about. We're going to discuss the models that inside sales can take in your company. And then we're going to move into some inside sales roles. Before COVID So pre Covid, there were basically six different models that we saw that inside sales could take within organizations. And you'll see that on this grid here you've got sales impact. So it's really important or it's less important. Right. The sales impact factors, there's less factors or More factors that you need to be sensitive to. That's what that horizontal means. And then on your Y axis, customer experience, again, low to high, higher customer experience or lower helps drive what the model is. You see, we start with the transactional role. A lot of you would be familiar with that inside sales. It could be a call center that has round robin of calls. It might be products and services that you're selling online and customers can call in to either place the order where the inside sales rep might help them with the final decision and even upsell some other products and services. The next thing that we see on that trajectory is segmentation of your small and mid sized customers. So segmentation your business. You may carve out a certain segment, but that would be handled by the inside sales team and the rest would be handled by field sales roles. And again, that gets down to productivity and then job decontamination. So having your field sales focus on some higher end or larger customer sizes and inside sales that have lower revenue opportunity and might be a little bit easier sell over the phone. You're having them focus on the inside sales team. Then two big models that we saw in 2020 and even into 2019 and the first part of 2020, the field sales support role was really starting to be adopted and field sales teaming. So field sales support just means that an inside sales role is truly supporting some of those activities that were traditionally done by a field sales role. So maybe the field salesperson is sending orders or over to the inside salesperson or they're asking them to help them with the contract process or the statement of work that might be in progress. As the inside sales role would be almost like customer service support, but would be considered a field sales support role. So it is considered inside sales field sales teaming a little bit different. It means that that person is actually selling products and services to customers and the customer may or may not interact directly with that person. So the idea on field sales teaming at its best is that my field salesperson is on site, you know, working with my customer on their strategy and what the order cycle might look like, what is it that their needs happen to be and some of the reorders or additional products and services may be handled directly by a field, by the inside salesperson. So your field sales. I'm sorry, so your customer may be calling on the field salesperson or they may be calling directly into inside sales. Segmentation of strategic business. That just means that as you segmented your strategic account, you've got a set of inside salespeople that are supporting, even at a higher level, your field sales role. So think about a little bit more white glove service. But again, the main face to the client is the field sales role. And inside sales is handling a lot of the work to make sure that the experience is very seamless for the customer. And then the highest and really the most expensive model, it's got the highest customer experience and the greatest sales impact. Meaning that you want to be everything to your customer. It's what we call strategic teaming. And that may be more than one inside sales role. Even supporting a field sales person and supporting your client and your customers. Look at the sales team as my team. So it could be a customer success person, it could be an inside salesperson, it could be a field sales role. But basically at that model, which is the very complex model, your customer again knows that he can or she can talk to several different people. But now what we're seeing is this new post Covid roles that are coming to life and they are field sales roles as well as inside sales roles that are selling remotely. So we're going to discuss what we think about that. But right now those models are evolving and they are flavors of or even part of the six roles that we just covered here. Now let's discuss the common inside sales roles that exist. And these existed pre Covid and they do exist today. There are five key roles. So the first one would be this demand generation role. And you'll see over here they got all kinds of titles. They're called SDRs and MDRs and BDRs. So sales market or business development reps. But primarily what they're handling are inbound leads, outbound campaigns they might be responding to, they're doing lead follow up, maybe some qualification and they may be assigned your untouched or unassigned customers or maybe a small segment of those customers. And we talk about some of the incentive measures and KPIs for them. Outbound calls met, the number of appointments set. Some of them are based off of talk time or sales accepted leads. Or we like to use the sales qualified leads because again that ensures that anything that they hand off, it's a highly qualified lead and not just junk if you will, than if they just get number of leads. And then there's a new business development role and that you know, they may be doing discovery and needs analysis and basically they are after new business and they may negotiate close the sale. Sometimes they do hand them off to an inside sale role. Then we've got account management, sales rep, account manager and that would Be the ones that we talked about transactional or they may be segmented by your small accounts. So they are actually selling and directly just like a field sales role would be. But they are selling from the inside. And then finally you've got a retention role. So they might be just the ones that are responsible for ongoing business. Right. So you've already got the accounts and you want to make sure you retain them. They might be doing things like contract renewals, something that we traditionally in the past have not had an inside sales role do. Now you look at the account manager role role number three, they are paid on things like revenue, might be their win ratio or could be customer retention as opposed to. If I am just looking at a proactive renewal business and potentially upsell opportunities, I may be measured on things like reduction of churn of my customers and customer retention could be upsell and cross sell. In some cases they just pay them for that, but they don't measure them on it. And then we've got the customer service and customer support roles that could be handling things like technical difficulties and delivery issues. Again so the field doesn't handle those. And they could be called customer service or customer support, whatever one would be familiar with. And finally what we've added to this is this new post Covid hybrid role that was a field role but now they're kind of selling from the inside. But it's an inside sales role. So we do not believe that the field roles are going to be going away and we do believe that that's going to be a very sophisticated role. So again, just because I'm selling remotely, it doesn't mean that I am an inside seller. We are expecting a lot of things out of this new role and some of the key activities is that they're going to be expected to build long term strategic relationships and they're going to have to be able to do that remotely as well as have the ability. We expect at some point in time to go face to face. But we do believe that those face to face meetings have changed. Well, basically forever. We believe that we talk about 2019 and even 2020 and even 2018. Trusted advisor. Well, how do you get there? We believe that the seller of tomorrow is going to be asked to leverage analytics and information through this back office function that will help them become real problem solvers for their customers. We believe that they're also going to be creating strategic plans with them that that help their customers get to where they want to go. Not just you selling products and services anymore. So that Seller, what he or she is going to be doing is definitely going to be changing and evolving over time. Let's discuss a little bit about segmentation because that's going to be pretty important as you look at 2021. And really what you want to keep in mind is just two things that your segmentation drivers have problems changed for some of the reasons that we talked about earlier. So maybe your verticals have even changed a little bit as far as your priority verticals. The addressable revenue has more than likely changed. And then your ability to service and sell for what their needs are today could have changed. And then think about the key decisions that you're going to have to make for these segments. The customer experience, which basically again is it in its simplest form. Why does your customer want to buy from you instead of someone else? The roles and rules of engagement between what was traditionally a field sales role and an inside seller role. So even if I've got a hybrid role, that doesn't mean that we've eliminated what was called field sales support. It just looks a little bit differently for where they're physically located. But the roles and responsibilities may not be that different. And then your sales impact priorities, so your sensitivity around cost, the things that we discussed, decontamination and your productivity concerns. So you still will be segmenting your customers. Maybe your tiers change a little bit and maybe where they fall into those tiers is going to change as well. Finally, I did want to cover with you guys the pay levels and pay mix field roles to inside sales roles. And you know, there's a few big points. And then I want to describe this chart that we're looking at over here behind me. But basically the big points today as we pre Covid looking at inside sales to field roles, pay levels on the inside sales roles, they average 20 to 50% lower than the field role. So inside sales roles, it is less expensive, anywhere from 20 to 50%. And what we find is that the pay level differential though becomes greater as someone progresses in that role. So if I am an inside sales and entry level role and a field role seller, the pay disparity might not be that great, maybe 10, 20%. But as I become a manager even, or I become like an inside sales rep 3 and then I'm a account manager 2 or 3, that's when the pay differences become greater. So as career progression increases, the pay levels become greater. And what you're going to understand too, and what you really need to understand as we look at these selling models moving ahead is that there's a lot more opportunities today in traditional field roles and than there are inside. And then base pay is where you're going to find the biggest differences. So let's just talk a little bit about this chart that's behind me. What you see highlighted in orange and circled those would be field roles at a real technology, a global technology company that we did pay benchmarking for in 2020. And so what you'll see in light blue are the inside sales roles. So what we have is the, on the top you'll see that the orange, everything circled in orange or highlighted in orange are existing roles at this company. And on the top you'll see the inside sales roles. There's two for this business development role to four business development roles in the field. So there's not a whole lot of career progression opportunity. Then when we look at the account manager roles, you'll see there's about four, four inside sales roles to maybe eight field roles. And then when we look at and that would be one to one roles inside to field. Then when we look at all these highlighted in this orange, the additional field roles look at all the opportunities to progress in the field, but there's really nowhere else to go inside. That's just something for you guys to really think about as you look at ramping up what your hybrid roles look like and what inside sales is going to look like moving ahead. And I want to dig down a little bit deeper into the question of pay. Now. This same chart that I just showed you, we just took a couple of roles here. We took a professional role that would be the mid level role at this particular company of a business development person and then an account manager. And what you'll see here is that in both of these roles there is a 30 and then a 33% difference in the account management role, a 30% difference in the base pay. And then you see that as they add incentive though the pay differential was a little bit different. So it ends up being about 20%. And again this is for a mid level role. We base this off of the 50th percentile for each role. And the inside sales role is what we find because of how the pay differential comes a little bit closer together, they're more highly leveraged. And what does that mean? That means that they have a greater incentive pay than their field roles, the equivalent field role. And we believe that that's because the belief around these companies is they can be a little bit more highly leveraged because they have more time that they can have direct customer impact because of the things in the past like travel. So again, a key thing to keep in mind is that the pay differences are a bit different between inside sales and field roles. And one of the questions that we are already getting from companies is, if my field seller isn't in the field anymore, should I just reduce his or her pay? Good question. But we're going to tell you to really think about not just is the job more or less difficult because they were traveling and now they're not, but what are the roles and responsibilities that you expect out of them and how do you expect their role to change? So if you want people that are really great problem solvers, for example, and you want them to be able to discover, use analytics in a way that helps them understand what market opportunity really looks like, you are looking at a role that potentially you won't even have a pay change for because you are looking at a more skilled person in that role. So the sales rep of the future, what do we see in this new hybrid role that could be inside sales, it could be field, it could be a blend of both. We know that all of them are going to have to learn how to connect with customers in a new way. When we stepped into Covid, we knew that a lot of companies had shifted from selling into just helping their customers. And that meant trying to help them understand how they sort through COVID 19 we had a technology company, global company, out of Philadelphia. And one of the things that they did was they had relocated over 1,000 of their people very, very quickly from the field to working at home. And they had set them up with technology and they were able to work seamlessly in an environment that was considered safe as well as secure. So any pay date and confidential information was kept securely. And, and what they did was they started to go out to their customers with that as an offer and started to help them get their people working from home in a way that enabled them to make calls and connect with people quicker. But that was also secure and safe for them. So being more creative and helping customers is something that we believe is here to stay. We talked about a little bit on being creative problem solver. And that means that the, the problems that your customers have tomorrow and as they look at doing business in the post Covid environment, they're just going to be different. So the answers that you had before aren't going to be the answers that you can rely upon any longer. So you really need to do a very good job. Your sellers of understanding what a customer's story is and what a buyer's story is and understand what the buyer's pain points are and, and how you can help be part of that solution. In understanding how to leverage and use data and market information, we believe that they're going to have to be really good at using technology. So things like CRM, it's not an option anymore. And then also just getting competitive information, market information, data analytics on past performance and predictability and the ability to be able to even understand things like AI, augmented intelligence. And that's going to become ever more important in this new environment. So we all saw it coming. We just saw it coming three to five years from now. But guess what? Tomorrow is here today. So we need to be able to respond to that and make sure that our reps get the proper training and that you are making the right decisions on the right investments. So think about the priorities of your company, where your biggest gaps are, and then how you can leverage your team to help you bring better solutions to the market. Your seller is also going to have to be very empathetic and continue to show his or her humanity. When we talk about humanity, you know, everybody heard about the typical story of a kid coming in the room or dogs running, you know, or barking in the background. And that six months ago that could have been like, little bit horrific for some people, right? Or really embarrassing. And now it's just normal. But when we think about humanity and connecting in a little bit different way. I'm just going to give you an example of something that happened to me. I was on a call with one of our clients, a global client out on the west coast, and I had our consultants on the call and they had never met this particular client, who I knew for about five years. But we really needed to build some rapport. And you know, we, as a consulting firm, we go on site and we also work remotely, but there always is that contact of on site because we know that there's no better way to build a relationship than when you can shake somebody's hand or share a meal, right? So anyway, we aren't able to do that in this particular situation. When we went through and we were looking at a project work plan and went through all the questions the client had, and when we were all done, my consultant said to our client, she said, hey, I'll call her Sue. Hey, Sue. Her name is Dawn. Hey, dawn, what is the color of the wall in back of you? Because that's really, really beautiful. Color of blue. And my client started laughing and she's like, oh my God. You know, and it was like a Ralph Lauren color. And they discussed like everything about how the selection process went. And, you know, my, my consultant is writing down the color number. And anyway, everybody laughed at the end and I thought about it after and I went, oh, my gosh. Like that one question that was totally unprompted did quite a bit to build the relationship. So it's going to be showing your humanity and then empathy. Right? So they're going to be home revenue is not going to be the way that it was. They're not going to be able to maybe potentially order everything that they would want to from you. And maybe their pain points have changed. So patience, tolerance and then having empathy and really understanding where they are, that's going to be a real attribute of the successful rep of tomorrow. And then finally having this clear personal brand and that is who he or she is and why it is that they're working for your company and what it is that they're offering to your customer. So with that, I think those are all the big points around Inside Sales. Thank you so much for joining us at the roundtable. And before I call Mark out, I just want to invite you to come every Friday to our roundtables at 1pm Please send us your toughest sales challenge. I see that we got a few more questions in on Inside Sales. I'm really excited to answer them. And please connect with us on LinkedIn, tell your friends and colleagues about us, and subscribe to our YouTube channel. So thank you for joining us. And now, Mark, I'd like you to join me over here and we can answer everyone's questions about Inside Sales.