Yesterday’s Sales Ops Forum meeting in Palo Alto, CA, sponsored by KickStart Alliance, featured a panel discussion on how to optimize inside sales (IS). Moderating the panel of three leading Silicon Valley software companies was Anneke Seley, Evangelist and Founder of Phone Works, and co-author of Sales 2.0. – Improve Business Results Using Innovative Sales Practices and Technology. Here are key take-aways from the discussion:
Role of Inside Sales:
IS teams carry quota just like field sales reps, but perform their selling primarily via phone and email. It is a proven and cost-effective selling model. In addition to IS, most companies also have teams responsible for prospecting and following up on marketing leads, but who do not carry quota. Names for these teams include direct response (for inbound inquiries), inside marketing reps (IMRs), sales development reps (SDRs), and teleprospecting reps. These functions are often a mix of internal and outsourced resources. At one company on the panel, the field required inside resources to assist them in their territory, often with administrative tasks. So the company created Inside Sales Assistants (ISAs), a role that does not carry quota. This gives the field the help they need without burdening quota-carrying IS reps and offers a career path into IS for entry-level employees.
Reporting Structure:
In two of the three companies IS reports into the field sales organization. In the third, it reports into a general manager and has its own P&L. The latter model may be a growing trend that clearly proves in the value of IS.
Turf:
All the companies carve out IS territory based on deal size. One IS team handles transactional business of $50k and below, another covers deals up to $90k, and another handles deals up to $175k. Some companies also have IS focus on SMBs, certain verticals or products lines. One audience member uses employee size as the cut off between inside and field sales, with 2500 employees or less going to IS.
Team Selling:
All the IS teams partner with field reps in addition to carrying their own quota. Often an overlay model is used for IS (where IS is not directly responsible for closing the business) and the IS/field team works as a franchise, deciding how best to tackle their territory. The ratio of IS to field reps is usually 1:2, in some cases 1:1.
Compensation:
One company uses a mix of team goals and direct IS quota. To eliminate IS and field competition, they double comp. IS is paid a higher amount on deals they own. MBOs are used to drive teaming behavior. One example is an MBO based on number of net new customers. In another company, IS is compensated for deals up to $100k and then double compensated with the field beyond that up to $175k. This model can create issues if IS discounts to keep the deal size within their desired range.
Key Performance Indicators (KPIs):
One audience member’s company uses KPIs to also measure success of IS. These include contribution to the pipeline, pipeline growth week over week, number of executive meetings booked and creativity in running campaigns.
Spiffs:
Another popular way to drive teaming behavior and results is through spiffs. Gamification is one of the latest trends to manage spiffs. Companies such as Bunchball and Hoopla make spiffs fun and drive competition and results.
Tips:
- In companies where the leadership team is not on board about the benefits of IS organizations, IS leaders can help educate them by showcasing top performers and case studies from their peers at other companies.
- To build the “brand” of the IS organization, publicly celebrate their successes, especially to the field. Carving out a campaign that IS can own – perhaps a product line or territory the field doesn’t want to focus on – and showing the incremental revenue IS can produce is an effective technique to gain recognition and support.