IDC Finds Inside Sales Delivers Efficiency and Customer Intimacy Needed in Challenging Markets

FRAMINGHAM, MA – May 13, 2008 – As the role of selling has become more complicated, inside sales has shifted from a simple overlay designed to assist outside sales to a force in its own right. Inside sales is now on equal footing with outside sales and playing a pivotal role in maintaining current customers and driving new revenue. According to a new study from IDC's Sales Advisory Practice, inside sales reps are generating both higher sales efficiencies for vendors as well as increased customer intimacy.

"Since the 1980s, when BMC first sold IBM mainframe software exclusively over the phone to sophisticated and demanding customers, inside sales has been a strategy considered by many and properly adopted by few. Some companies continue to shun the strategy, believing that it won't work for their business," said Lee Levitt, program director, IDC Sales Advisory Practice.

The IDC study shows that the efficiencies offered by inside sales are compelling. For example, an inside sales rep can conduct four to eight professional interactions to an outside rep’s single interaction, delivering significantly higher customer satisfaction and sales productivity. Moreover, most mid-market buyers are not interested in seeing a sales rep in person more than once or twice anyway, leaving inside sales in the ideal position to manage the relationship or opportunity in a highly efficient manner, in a way that many buyers actually prefer.

Inside sales has also become highly consultative in its approach, reaching fragmented markets and bringing new views on both accountability and capability. As inside sales has evolved, it has taken on the characteristics of other successful sales organizations. Many best practice organizations have torn down the boundaries of salary versus leveraged compensation between inside and outside sales, although the issue of accountability — which person is actually driving the business — remains a point of contention in some organizations. Management’s tracking of the pipeline, this study finds, is the answer.

“Best practice leaders focus more on making sure that teaming is optimized, emphasizing communication, and striving to drive revenue rather than focusing on cost management. They also see the efficiency and effectiveness inside sales can and does have," added Levitt. "Inside sales plays a leading role at best practice companies in closing new business and extending the reach of a company deeper and more broadly within existing accounts and territories. Improved customer intimacy and increased sophistication in territory management are perhaps the largest areas of continued evolution among inside sales teams."

Although the role of inside sales is expected to continue its evolution, the study uncovered an interesting point regarding the inside sales employee’s classification and its particular lack of evolution. The study reveals that although an inside salesperson may play a role similar to that of an outside salesperson, the inside salesperson is required to be classified as a non-exempt employee by the U.S. Fair Labor Standards Act (FLSA). While this classification may have made sense when the typical inside salesperson worked in a call-center environment, it is outdated and limiting.

The IDC study, Best Practices in Sales Performance Improvement: The Changing Nature of Inside Sales (Doc #210353), provides a detailed examination of the best practices employed by technology companies to build and manage inside sales organizations. The study identifies a series of best practices and critical success factors that help to ensure the productivity and efficiency of inside sales strategies.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps business executives, IT professionals, and the investment community make fact-based decisions on business strategy and technology purchases. More than 1,000 IDC analysts in over 110 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 44 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com or www.science-of-selling.com.

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