6 Key Questions to Identify if Inside Sales is the Best Model for You

Because of our position within the industry, we naturally see hundreds of both successful and unsuccessful inside sales organizations.  As a result, I regularly receive requests to talk with and consult both new and existing companies on how to structure a new inside sales organization.  However, this is not the correct first question.  Instead, you should first ask: “Is inside sales the best sales model for my company?”  Inside sales does not work for every industry, nor for every product.   I have found 6 key questions that help identify if inside sales is right for you.

1. What product or service do you sell?
2. How much is a typical deal amount (TCV – total contract value)?
3. What is your sale cycle (in days/months)?
4. Who do you sell to?
   1. Into what industry?
   2. Are they B2B vs B2C?
   3. To what title level (staff, manager, director, VP, Exec)?
   4. Into what department (Sales, HR, IT, Client Services, Marketing, Finance, Legal, Accounting)?
   5. Into which geographical areas?
5. What is your market size? – How many companies could buy your product/service?
6. How do you get your leads/lists?

Your answers to these questions will be your first step in structuring and determining if inside sales is best for your company.  I have a few guidelines that can assist you in your evaluation:

Question 1: What product or service do you sell?
Guideline: Many products and services require face-to-face interaction during the sales process.  Are your prospects and customers confortable purchasing your products and services over the phone, internet, email, fax, SMS, social networks, etc?  You will be surprised at how many people are willing to remotely buy products you wouldn’t think they would.

Question 2: How much is a typical deal amount (TCV – total contract value)?
Guideline: The counterintuitive guideline here is that too small is usually a bigger problem than too big.  I often see companies selling 7-figure deals and, more commonly, 6-figure deals done over the phone using inside sales techniques.  However, the real bread-and-butter deal size for inside sales appears to be in the 6-figure range.  On the bottom end (sub-10k), it all comes down to your cost of sale and the number of transactions one rep can do.

Question 3: What is your sales cycle (in days/months)?
Guideline:  Inside sales is also often described as the ‘High Velocity Model‘ of sales.  I see inside sales cut sales cycles down dramatically, sometimes in half or more.  It can turn complex, slower sales cycles into more transactional, process-based sales.  Typical inside sales models range from 30 to 60 days (for deals of 10k-60k).  This range seems to vary based on deal size; bigger can mean slower.  High 6-to 7-figure deals generally range from 4 to 12 months.

Question 4: Who do you sell to?
Guideline: The key here is that you must know exactly who purchases your product or service.  As implied in question #3, inside sales facilitates a higher volume, systematic and scientific approach to sales (though larger deal sizes inevitably tend to be more complex).  You must remove variables so that you are not re-discovering the same thing on every sale.  One of the best way to do that is to standardize your ‘who’; if it varies often, you cannot take advantage of the some of the key process productivity improvements available in the sales model.

Question 5: What is your market size? – How many companies could buy your product/service?
Guideline: The inside sales model increases the rate and volume of deals attainable.  If your market is not large enough, you can sell your market out.  We have had several clients need to adjust their focus to account growth and retention from new customer acquisition because they sold into too small of a market.  Ken Krogue shared an effective, free and quick market analysis toolset in his Forbes article “3 Google Tools to Check Before Starting a Business“.

Question 6: How do you get your leads/lists?
Guideline: There are three common methods to generating leads/names for an inside sales organization to sell to, and all are necessary.  Without access, budget and the ability to generate leads from all three methods, you will be limited and possibly prevent your success.  The methods are:  (1) marketing-generated web leads/inbound calls, (2) targeted lists and (3) events/trade show leads.  Each lead type accesses different segments of your market and is necessary (to differing degrees and ratios based on your market) for building a high-performing inside sales organization.

Inside sales can change a company’s growth rate almost overnight, but it must be the right fit.  A little research can save hours in time and thousands in investment.  Please comment and let me know if I missed anything, and what your experience has been.

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