July 9, 2020
By Frank Hurtte
I have a special file on my computer where I store passing thoughts that should or could be additions to my blog. Way back in January of this year, I had an idle hour or so in a cavernous international airport. It was late afternoon, and being an intemperate sort of guy I could have easily justified a conversation with Jim Beam or Jack Daniels in one of the terminal bars. The truth is, I was headed that way when I saw a nearly empty little conference area and instead decided to invest my time in thought.
Over the past four months of our coronavirus-based crisis, I have repeatedly visited my notes on inside sales. Believing recessions and other economic storms serve to accelerate change, I feel many of the things on the inside sales “wish list” will soon move from “nice to have” to mandatory practices. With this in mind, let’s review some points tied to inside sales.
Customers judge our service on inside sales behaviour
Long ago a customer commented, “The outside salesperson from our distributor is essential to making the phone ring, but it’s the inside sales team that keeps us calling back.” This belief has stayed with me for many years. We’ve done a lot of research on the topic and can affirm the thought is pervasive. Customers judge our service on the quality of the inside sales team. Since I first heard the comment, the Internet has replaced many of the product introduction and awareness functions of an outside salesperson. E-commerce, in various forms, continues to push this forward. And, the coronavirus and physical distancing serve to accelerate the issue.
Customers can find much of the information required for selecting products without the aid of a salesperson. But when they have a question, they want immediate answers. With outside salespeople constantly on the move and not stationed at a phone, customers reach out to the inside sales team.
An instantaneous and informed answer attracts customers. Experience dictates instant answers turn into orders. The customer places the order and returns to their daily tasks.
Inside sales or customer service?
There is massive confusion in our industry. Many use the terms interchangeably. For the sake of clarification, let’s toss out some thoughts on both.
Customer service tasks include:
• offering price and delivery options on customer provided part numbers
• transcribing orders from phone, fax and email to company ERP system
• answering customer questions on inventory availability, ship dates and freight issues
• confirming delivery dates
• answering rudimentary expediting calls
• reviewing open orders to ensure products are shipped and billed properly
Inside sales tasks include:
• assisting customers in selecting the right product for their application
• converting customers from competitive products
• providing expert guidance on some application issues
• recommending ancillary products required to complete the customers’ application
• negotiating pricing in competitive situations
In many instances, the tasks of customer service and inside sales are intermixed and combined, but it must be understood the skill sets and values of the two are different. Extending further, many of the sole customer service tasks are headed toward automation. For instance, 80% of our customers prefer email as the vehicle for placing orders; software exists to move this information from the email to the ERP system order. There are still a few glitches, but it is reasonable to expect automation to handle much of this task within a matter of a few years.
E-commerce solutions could further provide a level of automation to customer service tasks (as well as some of the inside sales tasks). However, for the knowledge-based distributor, the role of an expert inside salesperson will remain.
Application questions and other problem-solving roles are here for the foreseeable future. In fact, I believe they will be pushed to higher technical levels. The inside sales team will require greater skills and tools for solving more than just elementary questions. Greater training and more professionalism will be the order of the day.
Inside sales must become a profession not a stepping stone to something else.
Over the years our industry has developed the habit of cannibalizing inside sales each time a new position opens in the outside sales team. My observations indicate that each time this occurs, customer service drops a notch. When the new inside salesperson is charged with handling the accounts of the newly minted outside sales guy, the combination slows the progress of both employees.
The argument is that inside salespeople want to be promoted to outside sales. However, I wonder if the desire to move outside is driven by strong personal motivation toward the outside sales role or by added perks, prestige, and money associated with the outside role in their company.
Further, distributors must ask themselves two questions:
1. Can a good inside salesperson generate more customer value than an outside salesperson?
2. Can an inside salesperson generating great customer value earn as much as their counterpart in outside sales?
Thinking more about these questions, customer perception of value is changing. The pandemic has impacted the way customers want to do business. Many believe (I lean in this direction) that customer behaviour will never be the same in the post-COVID era. Routine customer calls may never be what was formerly perceived as normal again.
If we assume customer value drives sales, and I do, the company capable of delivering the greatest value may very well experience the greatest sales growth.
This brings us to several other questions:
• How are products introduced to your customers? Are they as open to “show and tells” today as they were a few years ago?
• Have your technically qualified sellers impacted customers over the phone during the pandemic lock-down?
• Who can interact with more customers daily, a phone-based inside salesperson or an outside guy who spends a good deal of time in traffic?
• How technically qualified are your inside salespeople compared to your outside team?
• Are both inside and outside salespeople bogged down with non-selling roles? A few years ago, we worked with several clients to identify the actual selling time of outside people. The average outside salesperson spent a whopping 22% of their time in face-to-face selling.
• In a structured and well-planned environment, could one of your outside salespeople do more from a desk than from their car?
• If the compensation were the same, would any of them consider the move?
Let’s define inside sales for what it should be.
The truth is our industry has inherited a situation. Conversely, our customers don’t care how we got here, strange inheritance or not. The road of life in business is strewn with once great but now obsolete business models. This week’s rare visit to the mall demonstrated this in spades. I walked by an empty space where Sears once flourished and a dozen or more crashed clothing brands on my way to J.C. Penney, which now also appears to be on the way out.
We have to re-engineer and redefine this inside sales role.
Frank Hurtte is the Founding Partner of River Heights Consulting. The Distributor Channel is a service of River Heights Consulting. Find out more: www.RiverHeightsConsulting.com.