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Those who have spent any time in New England in the winter are well aware of the rain/snow line, a vacillating weather band that separates snow-producing cold air from the north and rainmaking warm air from the south. Changing weather factors often cause the line to shift over the course of a storm, requiring the use of both an umbrella and a shovel.
In our b-to-b world, a similar line often exists between inside and field sales, producing similarly messy results. In this article, we will examine the factors that sales leaders must consider when shifting this line, the criteria for passing deals and checkpoints that can be put in place to monitor compliance.
Drawing the Line
As a standalone channel, inside sales has seen its influence and contribution grow as sales leaders have looked to reduce costs and penetrate new markets, particularly the small/medium business (SMB) space. With the proper training and experience, desk-based salespeople also have proven their ability to sell higher-ticket items into progressively larger-sized accounts, a fact that has led executives to constantly analyze the expense-to-revenue benefits of the inside model to determine where the segmentation line should be drawn.
Optimally, the line between inside and field sales must enable the flow of leads and movement of accounts. Segments are drawn based on revenue bands, number of employees or potential deal size; how the customer relationship will be developed and maintained involves the consideration of a number of questions, including:
• What resource is best suited to close the deal? Transactional selling is best suited to an inside sales role because of its relative ease, and the fact that inside sales reps are better suited to work higher volumes of opportunities. More sophisticated solution selling is often better served by a field resource that can better penetrate a buying team, leverage relationships and coordinate pre-sales support if required.
• What is needed to support the opportunity? Plug-and-play offerings that require little more than administrative support or minor troubleshooting play best at the inside level. Relationship selling situations that require the engagement and coordination of customer resources or the navigation of a complex customer decision cycle typically require the physical presence of a sales resource.
• How will the account be managed? The more accounts a rep has to manage, the less time he or she has to develop them. Renewals, upselling and cross-selling can be driven by a lower-cost inside salesperson, but more complex account relationships with large revenue opportunity should be handled by more experienced field reps.
Finally, you will want to consider the resources that your competitors are deploying against each market; if your inside sales reps are going up against a field resource, they may be at a disadvantage without the benefit of face-to-face, individual selling opportunities. If these inside reps are losing a high number of deals, it may be time to reset your line.
An Icy Mix
The convergence of the rain/snow line usually produces an icy mix of precipitation; the line between inside and field sales will certainly drive similar relationship conditions from time to time.
Field sales reps tend to be reluctant to give up accounts or territory with potential, but more than happy to pass along accounts they consider to be risky or that involve too much effort for too little return. In turn, inside reps may hold onto or mute the revenue opportunity of deals to get credit for them when a field rep would be better positioned to develop and grow them. Laser-focused on revenue and quota, all sales reps tend to be blind to your cost of sales metrics.
The initial transition of existing accounts from the field to the inside is different than moving accounts between field reps. For the customer, it represents not just a change in rep, but also a change in level of relationship. Developing an account transition process that includes such activities as account debriefs, initial customer communications and/or introduction calls ensures a smooth transition.
Once territories are established and the segmentation criteria between inside and field is communicated, getting sales reps to pass leads and accounts to each other presents sales leaders with another optimization challenge. In smaller organizations, sales leaders often choose to do nothing, allowing sales reps to sell what they can and deal with any disputes as they surface. Leaders also can partner the inside and field rep as a team and combine quotas, something that works well when there is a one-to-one or one-to-two relationship of inside to field reps. However, as ratios grow, this method becomes more challenging and can be administratively complex. If this alternative is chosen, compensation plans and quota allocation must be decided up front.
Beware of Black Ice
Smart sales leaders also know to always look out for the “black ice” – factors that can trip up the pursuit of a deal if the right resource below isn’t being leveraged, including:
• Territory definitions. Account ownership is maintained by territory management capabilities in the CRM system; sales reps and their managers can debate and establish ownership on an account-by-account basis, especially if determining revenue potential is part of the conversation. Territory definitions for non-clients must be driven by marketing data and processes that route leads automatically; if this is not possible, a manual resource will be required to assign them. This task may fall to managers, but if volumes are excessive, the amount of time involved will mandate the assignment of a marketing or sales admin resource. Original demand creation by sales reps will also uncover other opportunities that may need to be reassigned.
• Sales management. First-line sales managers should develop an inspection and assessment process for opportunities and actively enforce compliance. They also must be fully aware of the criteria developed for account ownership; if it includes a component for opportunity or revenue potential, managers will have to be able to interpret the criteria and make the decision in the best interest of the business. The creation of a clear set of rules engagement – including territory definitions, account classification criteria and process of reassignment – can minimize the number of interpretations required if the rules are clear and enforced.
• Compensation. The surest way to ensure that sales reps don’t work on deals that fall outside their assigned territory is to deny payment; take a deal away or have a rep see that it will happen and you’ve made the point. The downside is that salespeople have no motivation to pass along these deals to the right resource once they recognize they won’t get credit for it. Perhaps the lead was sent to the wrong rep or maybe the deal grew (or was too small) for the initial rep to get credit. To motivate the initial rep to pass the deal to the right resource, some organizations offer a finder’s fee, or cash payment that is made with no quota credit. Shared credit can be applied to deal splits of 25/75 or 25/100 provided it doesn’t dilute quota integrity.
In times of rising cost pressures, the expansion of inside sales as a viable resource will be a given in most organizations; this is a fact that will require new rules to be created and stretch the viability of old ones. Now is the perfect time to re-evaluate how well you have drawn boundaries between inside and field sales, as well as where gaps and weaknesses have emerged. Get things right, and you’ll enjoy a warm relationship between two functions that must be close for you to succeed; get them wrong, and be prepared for a long, cold winter.
About the Author:
SiriusDecisions, a leading source for business-to-business sales and marketing best-practice research and data. SiriusDecisions Executive Advisory Services, Consulting Services, Benchmark Assessment Services, Learning and Events provide senior-level executives with the sales and marketing operational intelligence required to maximize top line growth and performance.
©Sirius Decisions, 2010. Reproduced with permission.
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