David,

I like the table approach you have used to try and illustrate the situations by which you decide to use inside sales versus outside sales.

I wanted to add my observations to yours. As the President of InsideSales.com, I have the opportunity to observe hundreds of companies as they are in the process of starting or growing an inside sales team. More and more we are finding companies with bigger ticket items and higher product complexity being sold effectively by inside sales or remote sales teams.

In fact, taking the definition of inside sales as remote sales, we are finding that a majority of the time spent by an outside sales person is spent actually doing inside sales, or selling remotely. In looking at the table below, you can see I have noted that Bigger ticket items still benefit with a face-to-face meeting, but there are far fewer of them in the sales cycle, with much more meetings facilitated remotely.

Here is how I would modify your table:

Item                                                     Inside Sales            Outside Sales

Found an interesting research analysis by CSO Insight’s Barry Trailer that showed that sales rep quota attainment actually goes up when the ratio of reps to managers goes up.

In other words, sometimes we need to avoid the temptation to “over manage” and “over analyze” our sales people and simply let them do what they’ve been trained to do.

As Barry says,

“Any time taken from selling is reducing sales capacity. Coaching meetings, research and other value-added activities are valuable and important contributors to overall success. But standing meetings (e.g., every Monday morning at 8:30 am) are often holdovers from an earlier way of doing things. CRM reporting tools and dashboards can provide a basis for both managers and reps to communicate routine matters and to gain performance improvement insights.”

Ostensibly without the need to verbally re-hash each reps’ pipeline.

Branding, connecting with the customer, sales approaches, creating demand, and so on, all have some crossover between the B2B and B2C worlds.

But I’ll admit I’ve had a hard time justifying investing lots of money into social media. In the B2B space, it just always seemed relatively unimportant in the scale of things, compared to other means of business development.

So I was interested to see a post on No More Cold Calling that affirmed my suspicions.

Author Joanne Black states,

“Social media is a powerful tool for three things and three things only:

1. Search engine optimization — use your key words and raise your presence on the web.
2. Find out who people are — learn about a person’s background and your connections.
3. Find out who people know — look for close connections that you can leverage.

Some salespeople tell me they actually get clients through social media. Well, maybe if you have a commodity business. Could it happen? Yes. Do I rely on it? Absolutely not. I only count on what I bring about-through a proactive, intentional, referral strategy with personal introductions.”

As Joanne says, are there absolutely zero direct marketing opportunities in B2B using social media? No, but the very nature of B2B demands working with multiple decision-makers, multiple levels of needs to address, and multiple tiers of implementation. The simple fact is, the “reach” necessary to make large scale B2B sales happen through social media is incredibly thin.

I’m not going to reveal too much about it, but like their previous sales metrics reports, my reaction can be summed up in a single word:

Awesome.

There’s way too much good stuff in terms of specific metrics, data analysis, and key insights to post here, so go pick up a copy when it becomes available, but there were two key ideas I gleaned from the report:

Idea #1—In very clear terms, the study demonstrates that SaaS vendors have better sales performance than their license software counterparts—and the analysis indicates that it’s probably because they know how to push and leverage their own product solutions to get the highest benefit.

The demonstrated benefits are real and significant. The study shows that on average, compared to licensed software vendors, SaaS vendors:

• Have 20% more reps hitting quota (70% vs. 50%).
• Have more scalable sales processes, with measurable, repeatable, metrics.
• Have a nearly a 25% shorter sales cycle.
• Have higher lead-to-prospect conversion rates.

Some of it may be the nature of the SaaS space, but if the SaaS vendors themselves are getting these kinds of benefits, it seems pretty clear that the people they’re selling to should see some of the same.

Idea #2—It still comes down to Leads.

As the study itself states, “The #1 challenge for inside sales in this model [SaaS] is leads . . . This is a machine that needs to be fed.”

But it’s not much of a stretch to say that the #1 challenge for ANY sales organization is leads. Companies have to optimize and leverage their lead generation strategies to the max, especially when industry statistics show that organizations consistently have their reps make 5 or less contact attempts on new leads, let new leads grow cold by waiting 24-48 to attempt to make contact, and only contact 50% of their valid leads because they’re simply not giving enough effort or engaging in the right processes.

The question I asked at the end of Part 2 was, “How can you align a marketing team to produce sales leads without hurting, or challenging marketers’ deeply held beliefs about the need to create an emotional connection between a buyer and a product, a person and a brand?”

While I don’t know all the answers, I can offer the following advice, based on our own experiences here at InsideSales.com:

1. Make an explicit, hierarchical list of priorities that align your marketing production to your sales.

One of the first things I did when I sat down with our marketing team earlier this year was draw up a “focus list” for each of our daily activities. Any time we sign off on an activity, the global priority is established with it. Our list is provided below, yours may differ:

1. Remove barriers that cause drops in incoming leads (i.e., refining split test Web content that doesn’t appear to be working, Google Ad words / keywords / ads that aren’t working, bad PR. Obviously the worst type of “Bad PR” is poor service and product, but the marketing team rarely has control over those issues).
2. Increase existing media conversions.
3. “Widen the funnel” on existing media.
4. Find new media to generate leads.
5. Increase Credibility.
6. Sales Story
7. Collateral
8. Corporate Communications
9. Research
10. Brand

Notice that “branding” and “research”—two of the items vigorously attacked by BNet’s Geoffrey James as being superfluous for most B2B marketing organizations—are the last two items on the list.

2. Acknowledge marketer’s need for recognition.

Though company goals are always the same, marketers often want to be “rewarded” in different ways. Most sales reps don’t care about being “recognized” by the company for their efforts; their own internal satisfaction (and big pay checks) are enough. Marketers, while they appreciate a nice bonus as much as the next guy / gal, typically crave praise. They want recognition for the ideas they produce, as it resonates with their internal dialogue of creativity.

3. Don’t ignore branding activities altogether, just prioritize them against the need for direct sales results.

Studies have shown that a consistent “branding” message does lead to gains in sales over the long run, so it’s important to have a “look and feel” that’s appropriate to company need and industry. But the fact of the matter is that there are very, very few B2B “love brands” (i.e., brands that cause users to “self-identify” with the product), and trying to “manufacture” one is most often futile. A consistent message of value, productivity, and credibility wins the day in B2B marketing.

1. Web site design/content (65% stated they were increasing budget allocation)
2. Email marketing (54%)
3. Web search optimization (51%)

Great news, right? Good to hear that the economy is picking up, and that smart companies are following current trends in effective Web lead generation.

So why did my “Massive Disconnect” alarm start going off almost immediately?

Here’s why: because indicators show that the majority of companies are terribly, horribly un-optimized to take advantage of the leads their Web marketing activities generate.

Even though the article states that 75% of sales organizations now use a CRM tool of some kind to track and monitor sales activities, MIT research shows that most of them still aren’t following good lead management practices to get the most from their increased marketing spend.

For example, how many of the companies surveyed are currently responding to their incoming, “hot” Web leads in 10 minutes or less? Because if they aren’t, MIT’s research shows they’re potentially losing 20 times the total effectiveness of the leads they generate. Even worse, the research shows that 45% of companies don’t even respond AT ALL to new Web-generated leads—let alone in 10 minutes or less as best practices suggest.

So let me get this straight: the top three increased marketing budget allocations for the next year are all based on Web marketing—yet nearly half of companies don’t respond AT ALL to incoming Web leads.

Hmmmm.

Furthermore, of the companies surveyed, how many call/contact attempts are they making to reach their new Web leads? MIT’s research shows that barely 7 percent of companies make at least 6 total contact attempts by phone and email to incoming Web leads.

Yet according to The Bridge Group, the average number of “touches” needed to convert a new inquiry into a prospect is somewhere between 6 and 7—and dead “touches” like no-answer phone calls don’t even count towards that number.

So tell me again—why are companies increasing Web marketing budgets when statistically only 7 percent of them are even meeting the absolute, barest of bare minimums to get the value they want from their leads?

My “Massive Disconnect” alarm just went into overdrive.

Is it any wonder that in spite of progress, Propelling Brands says that sales and marketing still have a long way to go to align their processes?

I don’t want to steal his thunder, so go read the article, but the major point is that over the past 10 years, the roles of sales, marketing, lead generation, and lead nurturing have consistently become more holistic.

Sales managers are recognizing that they HAVE to have usable, critical intelligence data about how marketing is getting them their leads—and vice-versa, marketing managers are realizing that their efforts have to line up from Day 1 with what sales is trying to accomplish.

Every marketing and sales touch point is becoming increasingly attached and interactive with a half-dozen other touch points along the way—and for businesses to really get what they need out of their marketing spend, it has to be this way.

Trish Bertuzzi and The Bridge Group provided a set of data that added some weight to this assertion. Their survey of 115 companies indicated that dedicated lead generation/lead nurturing employees have nearly doubled in the last three years, and that there’s increasingly a split—almost exactly 50/50—of which department lead gen reports to, sales or marketing.

While there will never be a total overlap between sales and marketing, I don’t think the time is far distant that we may see the development of a new, hybrid department that works as an intermediary between the two. The “Market Oversight” department, or “Sales Analytics” department, will have the specific role of measuring, testing, and developing the ways in which sales and marketing will combine their efforts.

The Harvard Business Review says our customers don’t want to talk to us.

While a sobering thought, I’m also wondering if this doesn’t in part explain the move to “cloud computing” and SaaS over the last ten years.

SaaS takes away some of the most frustrating customer “touch points” of software—maintaining hardware compatibility, the frequent need for updates/patches, as well as having to completely relearn a new interface for every application. Web apps use concepts we’re already familiar with—clicks, links, embedded content—and puts it in front of the user.

Though the occasional unreliability of Internet service can be a problem, to me SaaS represents a trend in this idea that “self-service” often trumps “customer interaction.”

Another quick point:

We’ve been saying it for a while now, but it’s nice to see someone else is taking up the mantra:

Selling Power recently posted an outstanding article describing what we’ve known was coming for sales teams—that technology is going to replace some jobs, and only the most qualified sales reps that are willing to adapt are going to survive.

Inside sales is replacing “outside” sales because it’s faster, more cost effective, and provides more opportunities to leverage the power of technology to improve performance.

Inside sales is more scalable, and much easier to implement across locations/divisions.

He nails #4 on the head—it’s a constant game in both sales and marketing to not outsmart ourselves. Don’t toss away something that works pretty well in hope of chasing the “home run” without really, really researching it out first.

We’ve wasted a lot of dollars over the years because we forgot to split test everything. When it comes to your lead generation efforts, don’t make decisions based on your gut. I’ve discovered that there’s almost always a way to measure results, and then improve. It takes time and effort, but aligning your ad words, ad impressions, click-through, conversions, and sales process creates power and synergy.

The other thing Tom hits out of the park is the idea that the marketing to sales transition needs to be seamless, from first “touch point,” to conversion, to feedback. I’m still shocked, frankly, how many companies still haven’t figured out that they’re wasting money on marketing when they don’t have any real way to measure what’s working and what’s not. If online CRM seems to be more hype than substance lately, it’s only because there’s a lot of people who are willing to sell the software, but don’t have a clue how to really make it productive for the people who use it. The fact of the matter is, the only way to do what Tom’s talking about—making the marketing-to-sales handoff seamless—is to leverage current technologies for all that they’re worth.

“Seamless” means the prospect never knows there’s a transition. It means the sales rep knows exactly how the prospect got there, which lead source generated them, and what the prospect sees as being most important. Seamless means that ad words and sales collateral translate across team lines. Seamless means shared mind set. It means that sales and marketing—two organizations that have historically gotten along as well as a pit bull and a Siamese—are working in parallel, and not just meeting each other occasionally as they zig-zag across the company sales “goal line.”

That being said, her company, The Bridge Group, Inc., recently released a fascinating research study on the state of inside sales organizations in 2010.

Even the shortened, “highlight reel” version on Bridge Group’s blog, found here, shows some keen insights into the direction that companies are going with their sales teams.

A couple of highlights:

• Per-rep quotas are up across the board—but the percentage of reps hitting their quotas is low (40 percent or less).
• The average number of calls to marketing-generated lead has dropped 43 percent. Think there’s any correlation to this and the fact that reps aren’t hitting their quotas? (Our ground-breaking MIT research study has some answers to why fewer phone calls = a bad, bad thing for sales teams.)
• Of the 115 companies surveyed, the average organization’s inside sales team had grown 280 percent since 2007, in terms of total people employed.
• 89% of respondents said outbound phone calling was a primary function of their inside sales teams.

What does it all mean?

Mostly what we’ve been saying for for a little while now, that inside sales is quickly going to become Inside Sales—no longer just an “outlier” sales department whose primary function is lead gen and nurturing, but will be the heart of the 21st century sales team.