By Dee and Emily Karawadra
Impact PaySystem
In the payments industry, most ISOs and merchant level salespeople (MLSs) now use a mix of inside and outside sales teams due to a shift in merchant acquisition practices from in-person cold calling to phone sales and digital media campaigns. In this article Dee and Emily share their perspectives on this phenomenon.
New selling avenues hastened a drastic change in the sales landscape roughly 10 years ago when outside sales teams started transitioning into inside sales teams due to the high costs of supporting the outside sales model.
Today, inside sales is nothing like the automated telemarketing and appointment setting of old. Now, inside sales professionals are often referred to as "remote" or "virtual" salespeople who directly interact with customers. According to Investopedia.com, "An inside sale is the sale of products or services by personnel who reach customers through phone, email or the Internet."
The Internet and social media platforms opened new ways of doing business and revealed new methods for communicating with prospective customers ‒ without leaving the office. These methods have proven to be highly effective in building relationships and supporting merchants remotely.
Customer acquisition costs have influenced the evolution of inside sales teams. As ISOs and MLSs have explored alternative ways to reach new merchants, they've also weighed the associated costs. It's no surprise they've deemed the operational costs of supporting inside sales teams to be far less than supporting traditional outside sales teams, which require mileage and entertainment expenses to be paid along with benefits and commissions.
Generally, outside sales representatives earn 12 to 18 percent more than inside sales representatives. The top salary for field representative is $65,000 a year, compared with their inside counterparts' top salary of $50,000. From a cost perspective, it is understandable why inside sales is becoming a favored business model.
According to SalesLoft.com, use of inside sales is growing 15 times faster than use of outside sales, mostly due to convenience. The site reflects a 7.5 percent increase in annual inside sales team growth, versus only a 5 percent growth rate for outside sales.
As companies consider how to transition outside teams to the inside, lines between the two have begun to blur. Consequently, a new sales arm is emerging, which is a hybrid of the two.
Insidesales.com, in partnership with the American Association of Inside Sales Professionals, Top Sales World and the Association of Professional Sales, compiled and reported sales statistics for 2017. According to the study, face-to-face/field sales comprised 71.2 percent of the overall sales force; remote/inside sales accounted for 28.8 percent. The study also reported remote selling was on the rise, projecting it would increase 30.2 percent in the following year.
Here is perhaps the greatest surprise in the evolution of inside sales (primarily handled remotely) and outside sales (largely done face-to-face): Using census data, the report analyzed how the 5.7 million, non-retail salespeople in the United States were spending their time. Researchers estimated salespeople focused 43.5 percent of their time inside, and 56.5 percent in the field.
Studies like this prove outside sales representatives are now spending nearly half of their time selling remotely, which reflects an 89.2 percent increase since 2013. Additionally, respondent companies reported the primary purpose of inside sales teams was to "create a model that more fully partners with field sales." We see this also happening in the merchant services industry, with outside sales teams becoming more and more able to sell remotely and cover additional territory.
In a service industry such as merchant services, nothing beats the personal touch of a face-to-face sale. We all see this in our attrition rates. The merchants we're able to make relationships with are the merchants we keep even after their contracts expire.
However, inside sales has evolved from telemarketing to a frontline sales process handled remotely, which routinely involves high-touch transactions over the phone and email. Unlike old-fashioned telemarketers, today's inside salespeople are highly skilled and knowledgeable.
Advances in communications technology enable inside sales professionals to give presentations, conduct demonstrations and perform most functions traditionally handled by representatives in the field. And when the approach is right, they build strong relationships remotely and provide the support needed to keep merchants loyal.
A perfect combination of the two sales models is emerging in the MLS world as successful new tactics evolve. The ability to touch more prospects while building solid relationships looks like the winning combination for MLSs seeking to retain merchants while obtaining new business.
As I get older and no longer have the energy I once had, I expect the ability to remotely sell and support a service will be a positive factor in my success as I move into my next phase of life. It's intriguing to know my time and energy can be used more effectively with inside sales tactics, and that I won't have to sacrifice building solid relationships and retaining my customers.
I believe in the value of standing in front of your prospect and being able to build a relationship, but I also see a need to balance this with the efficiencies gained with remote tactics. I can now attest, if both tactics are done effectively, the outcome will far exceed what I could accomplish with only face-to-face interaction.
Dee Karawadra is president and CEO of Impact PaySystem, and Emily Karawadra is the company's chief financial officer. Since 2001, Impact PaySystem has been a leading provider of payment processing technologies and services to merchants throughout the United States. Through alliances with payments industry leaders such as Chase Paymentech, First Data, Buypass, Sage and more, Impact PaySystem offers tailored solutions to meet the unique needs of each merchant. Dee and Emily will welcome your questions and comments at dee@impactpays.com and emily@impactpays.com, respectively.
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