In my last blog post, I revealed a list of Eleven Deadly Sins of Inside Sales with the promise that we would examine tangible methods clients have used to avoid these mortal transgressions and set up successful Inside Sales programs. There are multiple “flavors” of Inside Sales programs that companies utilize to meet their business needs and strategic objectives. One of the most commonly used coverage models is the Inside/Outside paired model; this model couples Inside reps with Field counterparts in an effort to broaden sales coverage and more effectively align sales activity with the most appropriate resource. This article examines a successful deployment of the Inside/Outside paired model, focusing on the ways one particular client was able to avoid many of the deadly sins to forge a profitable, sustainable program.
The client organization (a large technology hardware company) required consulting support to build a program to improve overall sales productivity. A recent time-in-motion study revealed that field reps were spending a significant amount of time facilitating the needs of existing customers, including a high volume of simple, transactional business which was relatively low value-add.
A consequence of this large amount of time conducting “care and feeding” activities with retained accounts was that field reps were spending very little time hunting for new business. As large accounts gradually became saturated, revenue concentration among large accounts increased dramatically, moving from a relatively healthy 80/20 split (80 percent of revenue coming from top 20 percent of accounts), to a potentially risky 93/10 split (93 percent of revenue coming from top 10 percent of accounts). Whenever revenue becomes overly concentrated within a relatively small number of accounts, the risk associated with losing a large account to a competitor becomes problematic, particularly when there are few fledgling accounts being developed in the background.
AGI proposed using an Inside/Outside paired model to more effectively cover large accounts. The logic behind the idea is what we refer to as a “Lift and Shift” effect; simpler sales activities and customer interactions are “shifted” to Inside Sales to allow Outside sellers to “lift” their productivity by focusing on more complex, higher margin opportunities and/or building new customer relationships. If implemented properly, such a model can help create a “1+1=3” result, catapulting overall territory productivity up, while also driving acquisition of net new customer accounts. In short, the collaborative power of Inside Sales working with Outside Sales can extract more value from the territory overall than single-channel coverage.
Once AGI generated a compelling business case for what a paired coverage model could accomplish, senior management at the client organization aggressively marshalled the organization for change. They were steadfast in their resolve to take all necessary steps to make the paired model a success. I’ve outlined below the critical elements of their approach:
1. “This is a controlled deployment, not a pilot.” One of the most unfortunate, and often repeated mistakes that I see with respect to Inside Sales deployment is the desire to go all-in too quickly. Any new coverage model needs time to take hold in an organization and for all the unforeseeable “bugs” to be worked out of the program. We advised the client in this situation to execute a controlled deployment across a limited geographic area. As simple as it seems, using “controlled deployment” instead of “pilot” in communicating the program was critical; the word “pilot” connotes something that is being attempted and could go away. “Controlled deployment” signifies something that is being rolled-out deliberately and carefully to ensure maximum impact. Starting small also makes the inevitable course corrections and program recalibrations less painful.
In this case, we rolled out paired coverage in two large geographic districts in the U.S., Chicagoland and Michigan. These two districts were carefully selected for a variety of reasons. Chicagoland is an urban territory, with high concentration of opportunity in a relatively small geographic area. Michigan is larger, and the opportunity more dispersed over a wider area with potentially huge windshield time for field reps. We wanted to test the model within both district types.
In addition, both territories had nearby analogues that we could use as control groups to determine whether we were seeing coverage uplift by deploying the paired model. The control territories were, at the time, experiencing similar growth as their experimental group counterparts, which gave us confidence that we could reasonably isolate the impact of the paired model on results.
Finally (and perhaps most importantly), the Chicagoland and Michigan marketplaces were both led by open-minded district leaders who had demonstrated a capability to implement change within their districts. We knew the key to adoption would be a management team that was willing to challenge existing paradigms and strive to make the program successful. In effect, we attempted to set the program up for sustainable success from the outset.
2. “Inside Sales is a peer selling organization working in collaboration with the field.” From the commencement of program activity, management reinforced the notion that Inside Sales was not a subservient entity. For example, while Inside Sales would take their share of administrative activity in covering the territory, they would not serve as merely a dumping ground for sales admin. Management directed field reps to determine the types of selling activities they could successfully migrate to Inside Sales.
The organization hired a VP of Inside Sales with a substantial track record of success in Inside Sales organizations and resisted the temptation to simply appoint a successful field manager to the role. The Inside Sales VP was hired at a level equivalent to a regional field VP and given an equal seat at the table in formulating strategy and forecasts.
3. “We will invest in the elements required to make the program successful.” For the duration of the controlled deployment period, management made any revenue realized by the territory compensation neutral. In fact, in rolling out the program, the VP of Sales told Outside reps “to make hay while the sun shines—if your Inside rep is successful, you share in that success.” Inside and Outside reps were given the same overall territory revenue goals which were increased to pay for the program.
The client also invested in an Integration Manager role to ensure that program adoption was occurring at a sufficient pace. This individual was responsible for assessing the level of integration between the Inside and Outside reps and reporting weekly to both Inside and Field management. For example, we determined early on in the program that daily frequency of communication between Inside and Outside reps was directly correlated to success, so the Integration Manager was able to provide definitive feedback on how often reps should interact. Where integration was weak or non-existent, the IM was responsible for intervening directly to facilitate conversation and the sharing of selling activities among Inside and Outside reps.
The controlled deployment of the paired model ran for a full year to allow the program to ramp toward full productivity. The results were surprising, even for the management team that believed in the program and were committed to achieving results, not to mention some of the skeptics. Chicagoland territory revenue grew at 36 percent YOY after the introduction of the paired model. The corresponding control territory was flat during this same period. Similarly, Michigan experienced a 28 percent gain during the controlled deployment period, while its corresponding control territory actually declined by 4 percent. Both experimental territories experienced double-digit increases in net-new accounts and average deal size. While we can’t definitively claim that all gains were attributable to the presence of paired Inside and Outside coverage given that all districts had the same product portfolio, marketing and presales support, and overall management structure, we could reasonably make the argument that the addition of Inside Sales resources led directly to incremental performance improvements across the board.
Not surprisingly, once word of this program success started to circulate, once-reluctant districts were aggressively raising their hands to be part of the expanded launch of the program across North America. While the client faces a challenging road ahead in maintaining the integrity of the original controlled deployment as the program scales, they have unlocked a powerful productivity enhancement lever by patiently and deliberately avoiding the Eleven Deadly Sins of Inside Sales.
Read “The seven (no, make that eleven) deadly sins of inside sales” or visit Alexander Group for other sales insights.