Inside Sales vs. Outside Sales: How to Structure a Sales Team for the Modern Buyer

The landscape of B2B sales has changed dramatically in recent years. Buyers are more informed and self-directed than ever before. Digital channels have become the primary engagement medium. And the classic distinctions between "inside" and "outside" sales roles have all but dissolved.

In this environment, sales leaders face a critical question: how do you structure a sales organization to meet the needs of the modern buyer? What‘s the right balance of inside and outside sales – and how can the two functions work together seamlessly across the buyer‘s journey?

In this post, we‘ll share data-driven insights on the evolution of inside and outside sales, and provide a framework for designing a hybrid sales model that maximizes revenue efficiency and effectiveness. You‘ll learn:

• How inside and outside sales roles have changed and converged
• Key trends driving the shift toward digitally-enabled, team-based selling
• Pros and cons of inside vs outside sales across cost, productivity, and results
• Detailed org structures and coverage models used by leading B2B sales teams
• Strategies for blending inside and outside motions to grow existing accounts
• How to hire, compensate, and enable hybrid inside/outside sales roles
• The skills and capabilities sellers will need to succeed in the future

But first, let‘s explore how we got here.

The Evolution of Inside & Outside Sales

Historically, B2B sales organizations were split into two distinct functions:

• Inside sales: Reps based in a central office using phone and email to prospects, qualify leads, and close smaller deals
• Outside sales: Field reps visiting buyers on-site to build relationships, demo products, and negotiate larger contracts

This model worked well in a world where information was limited and controlled by sellers. Outside reps were the primary conduit to product details, pricing, and references. Inside reps played a supporting role, focused mostly on lead generation and transactional sales.

But over the past 10-15 years, three major shifts have disrupted this model:

1. Buyer Behavior: B2B buyers now complete 60-80% of the purchase process before engaging a sales rep, according to Forrester. They‘re learning about products, consuming digital content, and connecting with peers online. By the time they talk to a rep, they‘ve often already decided on a solution.

2. Sales Technology: The rise of SaaS has armed inside sales teams with advanced tools for researching prospects, automating outreach, and facilitating virtual meetings. An inside rep can now manage a pipeline of 150-200 opportunities and engage buyers just as effectively as a field seller visiting in-person.

3. Economic Pressures: The high cost of outside sales (up to 40-50% more per rep than inside sales) has come under scrutiny. CFOs are pushing for more productive and scalable selling models. COVID-19 then forced a massive shift to remote selling, proving that deals of all sizes could be closed without face-to-face interaction.

The cumulative effect of these forces? A tectonic convergence of inside and outside sales.

According to sales leader Mary Shea, "the traditional boundaries between inside and outside sales are crumbling." Shea‘s research at Forrester shows that 62% of B2B sellers now employ a hybrid inside/outside sales model, up from just 27% in 2017.

Inside vs. Outside Sales: What the Data Says

So what does this mean for sales org structures going forward? Should you build your team primarily around inside sales, outside sales, or a mix of both? Let‘s look at what the data tells us.

Cost & Productivity

From a pure efficiency standpoint, inside sales has a clear edge. The fully-loaded cost of an inside sales rep (salary, benefits, technology, management) is typically 40-50% less than a field rep. Inside reps also tend to carry 2-3x more pipeline and engage in 30-50% more selling activities per week.

However, outside sales is often better suited for complex solutions with longer sales cycles. Field reps can build deeper relationships, customize solutions, and negotiate 6-7 figure deals. Research from Steve W. Martin shows that outside reps have 18% higher quota attainment on average for deals >$100K.

Revenue Results

Based on a survey of 200 B2B sales leaders, the Alexander Group found that:

• Inside sales teams have a 26% higher lead-to-opp conversion rate
• Outside sales teams have a 14% higher close rate
• The average revenue per inside rep is $1.4M vs. $2.6M per outside rep
• Net sales productivity (revenue per cost of sales) is 32% higher for inside sales

Other studies show inside sales growth outpacing outside sales by 15X in the U.S., and inside sales delivering up to 50% of total revenue in some industries. However, outside sales still carries the large majority of quota for most enterprise B2B companies.

Retention & Ramp

Inside sales roles tend to have higher turnover, with an average tenure of 2.4 years compared to 3.2 years for outside reps according to The Bridge Group. Inside reps also ramp slower, taking 4.7 months to reach full productivity versus 4.2 months for outside reps.

However, outside reps have a longer post-ramp learning curve. It takes 12-18 months to develop outside sellers into strong relationship builders and deal executors. Inside reps can be trained on systems and processes faster, reaching peak performance within 6-9 months.

Here‘s a summary comparison of inside vs. outside sales across key dimensions:

Factor	Inside Sales	Outside Sales
Total cost per rep	$95K-$140K	$160K-$230K
Quota per rep	$750K-$1.5M	$1.5M-$3M+
Sales cycle	1-3 months	4-12 months
# of accounts per rep	50-200	15-50
Ramp time to full productivity	4-5 months	6-9 months
Average rep tenure	2.4 years	3.2 years
Typical career path	AE > inside manager > sales ops/enablement	AE > outside manager > sales leadership

Sources: The Bridge Group, Alexander Group, Sales Hacker

Designing a Hybrid Sales Model

As buyers demand more seamless digital-to-physical experiences, the optimal go-to-market model for most B2B companies is a carefully coordinated mix of inside and outside sales motions. In fact, high-growth companies (>40% YoY) are 2.6X more likely to use a hybrid approach according to Forrester.

There are two primary ways to structure a blended inside/outside sales model:

1. Tiered Coverage: Segment accounts based on revenue potential and strategic value. Assign inside reps to transactional accounts (<$25K annual contract value), a mix of inside and outside reps to core accounts ($25K-$250K ACV), and dedicated field reps to enterprise accounts (>$250K ACV).

2. Buyer‘s Journey: Deploy inside reps for top-of-funnel prospecting, lead qualification, and pipeline development. Transition opportunities to field reps for late-stage solution design, proposal development, and contract negotiation. Inside reps maintain the relationship post-sale and identify expansion revenue.

Here‘s a visual example showing how inside and outside reps work together across the buyer‘s journey in a hybrid pod model:

The key is to clearly define the role of each function and implement processes to facilitate smooth lead handoffs. Use a sales engagement platform like Outreach or SalesLoft to orchestrate touches and ensure consistent messaging from inside to outside reps.

Also align your inside and outside teams under the same management structure and compensation plans. Establish shared revenue goals and pay inside reps a portion of the commission on deals they source to outside reps. This motivates strong teamwork throughout the sales cycle.

Growing Existing Accounts with Inside + Outside Sales

One of the biggest opportunities in a hybrid sales model is growing revenue within your installed base. Instead of treating customer expansion as a post-sales function owned by account managers or customer success, use inside sales reps to proactively identify growth potential and generate uplift opportunities.

This strategy has become a top priority for B2B sales leaders. In a 2020 survey by Gainsight, 86% of respondents said they were increasing investment in their "land and expand" inside sales capabilities. The most successful companies build a data-driven, multi-pronged approach:

• Inside SDRs: Mine customer usage data and buying signals to surface accounts with high expansion propensity. Pursue warm outreach to discover unmet needs and pitch relevant add-ons.
• Inside AEs: Work closely with field reps and account managers to map the organization, identify key stakeholders, and co-develop expansion plans for each customer. Help execute virtual QBRs and renewal conversations.
• Inside AM/CSM: Provide high-velocity, tech-touch engagement to onboard, train, and support customers at scale. Flag accounts that are at-risk or ripe for cross-sell to inside sales and account teams.

This integrated land-and-expand motion has become a major growth engine for leading SaaS companies. Gainsight‘s research shows that top performers generate 23-40% of new revenue from existing customers, compared to just 12-18% for average companies.

How AI is Transforming Inside & Outside Sales

Artificial intelligence is quickly becoming a game-changer for both inside and outside sellers. By automating repetitive tasks, AI allows reps to focus on high-value work like researching accounts, personalizing messaging, and engaging buyers.

Some of the key AI use cases in sales:

• Chatbots: Conversational AI can handle a large portion of early-stage lead qualification, answering buyer questions and routing them to the right rep. Companies using chatbots report a 40%+ increase in qualified leads.

• Sales Assistant: AI-powered tools like Salesforce Einstein and Exceed.ai act as a virtual assistant for reps, automating CRM data entry, prioritizing accounts, and even suggesting next-best actions to move deals forward.

• Predictive Lead Scoring: Machine learning models analyze thousands of buyer signals to predict which leads are most likely to convert. This helps inside reps prioritize outreach efforts and outside reps know where to invest their time.

• Conversation Intelligence: Using natural language processing (NLP), platforms like Gong and Chorus record, transcribe and analyze sales calls. Reps get real-time feedback on what‘s working, and managers can identify coaching opportunities at scale.

In a 2021 Salesforce survey, 88% of sales reps said AI has improved their productivity and 75% said it enables them to spend more time actually selling. Expect to see AI become ubiquitous across inside and outside sales motions in the coming years.

The Future of Sales: New Skills Required

As the lines blur between inside and outside sales, the skills required to succeed in these roles are also evolving. Both inside and outside reps will need to become proficient in a range of digital selling techniques, from social prospecting to video networking to data-driven account planning.

Some of the most important skills for modern sellers, according to research by LinkedIn and Rain Group:

• Digital Fluency: Reps must be able to navigate a complex web of digital buying touchpoints and channels. This means using sales engagement, video, and social platforms to connect with buyers where they are.
• Insights & Challenger Mentality: Reps need to deliver unique perspectives that reframe how buyers think about their business and needs. Providing insights that challenge the status quo is the #1 way to create buyer value.
• Active Listening & EQ: With so much information available online, buyers crave empathetic listeners and trusted advisors. Reps skilled in active listening and emotional intelligence (EQ) consistently outsell the competition.
• Adaptability: Things move fast in modern sales. Reps must be able to quickly pivot their approach based on changes in the market, competitive landscape, and buyer needs. Agility is key to hitting quota.
• Systems Thinking: As sales becomes more data-driven and team-based, reps need to understand how their piece fits into the larger revenue puzzle. The best reps see themselves as part of an integrated, end-to-end revenue engine.

Forward-thinking sales organizations are hiring and enabling reps for this new reality. They‘re prioritizing coachability and growth mindset over years of experience. Many are ditching resumes altogether and using AI-based assessments to identify reps with the right behavioral attributes.

The lines between sales, marketing, and customer success are also blurring. Account-based revenue teams with a mix of inside and outside roles are becoming the norm. In this model, everyone works together to engage accounts, build relationships, and expand customer value over time.

Putting It All Together

In summary, the rise of inside sales and the convergence of inside/outside selling motions is one of the most important trends in B2B sales today. To stay ahead of the curve, modern sales organizations must:

1. Design a clear sales coverage model with defined roles for inside and outside reps
2. Use technology to enable seamless coordination and visibility across teams
3. Prioritize integrated account growth over net-new logo acquisition
4. Invest in AI-powered tools to boost rep productivity and performance
5. Hire and develop reps with the digital selling skills needed for the future

Of course, there‘s no one-size-fits-all approach. The optimal inside/outside sales mix will depend on your business model, target market, and growth stage. But by aligning your sales org structure with changing buyer preferences, you‘ll be well positioned to drive efficient, scalable revenue growth in 2023 and beyond.