What Is Inside Sales? Definition, How It Works, and Advantages

What Are Inside Sales?

Inside sales refers to the sale of products or services by personnel who reach customers through phone, email, or the internet. Other ways to define inside sales are "remote sales" or "virtual sales." It is called "inside" because these sales reps remain indoors, often at a call center or company office. Inside sales may or may not be outsourced to a third-party vendor.

Inside sales can be contrasted with outside sales, where people physically go out and meet potential customers.

Key Takeaways

  • An inside sale is the sale of products or services made by personnel who reach customers by phone or online.
  • Outside sales would instead rely on in-person meetings and physical interaction.
  • Inside and outside sales may be paired for greater efficiency, where they assist each other in tasks, such as lead generation, to increase sales.
  • Purchasing goods and services online or by phone is increasingly popular among consumers.

Understanding Inside Sales

Unlike outside sales personnel, inside salespeople traditionally do not travel. Despite this, they are still proactive about contacting potential customers and may engage in cold calling. However, a company may also designate incoming calls from prospective customers as inside sales. In addition, a company may outsource its inside sales duties to a third party instead of conducting sales in-house.

The advent of the telephone and its use as a sales tool gave birth to the distinction between inside and outside sales. The term "inside sales" was created in the 1980s to differentiate telemarketing or telesales from high ticket phone sales common with business-to-business (B2B) and business-to-consumer (B2C) sales practices.

Unlike telemarketers who read from scripts, inside sales reps are highly trained, creative people, who determine a sales strategy for selling products and services to customers. By the late 1990s or early 2000s, the term "inside sales" was being used to mark a difference between inside and outside sales.

Sometimes inside and outside sales personnel and practices work together for greater efficiency. For example, an inside sales individual within a department may handle the legwork of creating and organizing sales appointments for outside sales personnel, otherwise known as lead generation. In some cases, inside sales personnel may be used to upsell incumbent customers by adding ancillary products or services to their order.

The inside sales segment is among the fastest-growing segments of sales and lead generation.

Advantages of Inside Sales

Purchasing goods and services online or by phone is popular among consumers, looking for ways to simplify their lives. It even has its own industry association, the American Association of Inside Sales Professionals (AA-ISP).

Meanwhile, the ways most inside and outside salespeople operate are converging. Increasingly, outside salespeople are making more sales remotely and inside salespeople are occasionally going out in the field. This convergence is aided by the adoption of new sales-facilitating technologies, as well as changing customer buying habits and attitudes about how products and services are sold. This has led to a new moniker for inside sales: "sales in the cloud."

The Role of the Inside Sales Representative

Insider sales reps often earn a modest base salary followed by sales commissions and performance bonuses. Because inside sales will take place online over the phone, representatives may want experience in telemarketing or customer support and develop a pleasant demeanor when calling strangers. One perk of inside sales is that you can often do the job remotely or from home.

In 2021, according to PayScale.com, the median base salary for an inside sales representative is about $45,000 with 10% receiving a maximum salary of $66,000. However, salary differences can vary greatly among companies. For example, Oracle Corp. pays its inside sales reps an average salary of $50,565 while State Farm Insurance Company offers its sales reps an average salary of $29,661, according to PayScale's data.

It is common for companies to outsource inside sales to third-party specialists like call centers, telemarketers, or online sales specialists.

What Is Inside Sales vs. Outside Sales?

Inside sales relies on an indoors salesforce to market and sell the company's products or services online or over the phone.

Outside sales uses in-person techniques such as meeting clients face-to-face, knocking on doors, or setting up physical booths at conventions or conferences.

Is Cold Calling Used With Inside Sales?

Cold calling is when a salesman or marketers solicits a potential customer who has had no prior interaction with the company or salesperson. Consumers tend to dislike cold calling, finding it impersonal and potentially disruptive. As a result, the success rate for cold calling is very low and federal regulations now exist to limit the extent of cold calls including the National Do-Not-Call Register.

Nevertheless, cold calling can be one strategy used with inside sales to reach more individuals and stay proactive.

Is Inside Sales the Same As Telemarketing?

Telemarketing, or telesales, involves selling over the phone or by email, often using cold calls, and is one aspect of inside sales. On whole, inside sales encompasses a broader range of sales & marketing tools and techniques including social media marketing, mobile marketing, search engine optimization (SEO), and customer relationship management (CRM).

The Bottom Line

Inside sales relies on professionals selling products and services from behind a desk in an office, call center, or from home. Inside sales uses telephone, email, and other online methods to make contact with prospective clients and close sales. With the growth of e-commerce, inside sales involving social media and driving web-based traffic has become a priority for many companies, including legacy brick-and-mortar retailers.

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