Inside sales roles are pervasive: Some thoughts as to when and why
Xtra Effort has been engaged by three different companies over the past three weeks to help them hire Inside sales people.
What is unique from the past:
Each company’s entire sales model is based on inside sales with no field sales emphasis.
Although outbound prospecting will be required, considerable resources will be dedicated to generated demand via Sales 2.0 and web marketing technologies, i.e., Eloqua, Marketo, Hubspot, etc, and their integration to Salesforce.com .
Channel relationships are established early in the companies’ evolution in order to gain more immediate access to channel partner clients and shorten the time to deals. Channel partners – as integrators and thought leaders (at a level “where the rubber meets the road”) – help validate a company’s value to the enterprise.
When and why is this trend occurring?
- Venture backed technology companies and their investors are reluctant to incur the risk of developing solutions that exceed $300k, directly compete with a market guerrilla (i.e., IBM, Cisco, Microsoft, Oracle, SAP, EMC), have a large professional service commitment to implement, have a big cost of sales, or a long sales cycle.
- Furthermore, these new start-ups don’t want to depend on the Fortune 500 alone to develop a market.
- A traditional field sales model represents longer sales cycles, higher salaries, and a bigger cost of sales.
Instead they are developing highly compelling technologies that complement a guerrilla’s platform, and are easy for an enterprise to see and realize value. They see an easier path to revenue and market share with solutions that also help middle market companies.
The hope is that Sales 2.0 technologies, channel partners, and inside sales execution will lower the cost of sales, create inbound enterprise inquiries, and speed up the process of developing market share.
Another hope is less seniority in sales personnel will be required because there will be less dependence on a sales person’s cold calling experience and rolodex to generate awareness, build awareness and credibility, and close deals. Investment has been partially reallocated from sales personnel salary to Sales 2.0 technology and support personnel.
The new start-up envisions the thoughtful creation and distribution of web content (blogs, webinars, etc) to cause web site traffic that is monitored. Web site visitors will be graded and prioritized based on who (title, role) is visiting, what they are reading (or watching/listening), how often they are reading, and when they are reading. The pairing of a rules engine and a Sales 2.0 operations person are constantly refining their understanding as to the best time to contact the web site visitor based on the data discovered about their visit, i.e., “after they read X and request Y”.
This new pair will also influence:
- Inside sales’ initial messaging. A CIO would want a different message than a systems administrator
- The objective of the call, i.e., more information versus a needs analysis
- Who within the sales organization should be handling the outbound call. The request for more information to a systems administrator with no budget can be handled by the more junior inside sales person; a CIO with an imminent need to virtualize their enterprise may require different level sales personnel.
Xtra Effort’s recent clients who have followed this strategy represent security, data storage, and virtualization related solutions.
It is an exciting vision but it represents implications to hiring and retaining sales personnel. Traditional career paths had included advancement to field sales, field sales management, inside sales management, or bigger account executive roles, i.e, “Global Account Manager”. Instead there will be career path roles to manage the Sales 2.0 technologies or to lead teams inside sales people dedicated to qualifying versus closing. Greater new age marketing skills will be required.
CEO’s and VP’s of Sales zeal for efficiency, automation, and cost containment may result in hiring sales personnel whose skilss are limited to create relationships and increase brand awareness, but can’t actually close a deal. A modest $50,000 investment that represents change in process to mission critical systems is still not taken lightly by an enterprise of any size. Sales calls should be closely monitored to see if greater/different training or an upgrade in sales personnel is required.
Hiring managers and HR organizations will have to be more conscious of how they define, document, and promote these new career path opportunities. Otherwise, unwanted turnover can occur. Turnover is more expensive than higher salaries, role suitability, and sustained productivity.
Traditional enterprise field sales personnel may be needed once these start-ups begin to mature and have larger accounts to pursue, protect or scale. There will also be plenty of exceptions with start ups whose solutions immediately require field sales people to help educate and engage the enterprise to insure client sales and implementation success.