What Is Inside Sales?
Inside sales is a sales methodology where sales activities are conducted from within the office. While traditional field sales involve visiting customers directly to perform sales activities, inside sales primarily utilizes remote communication tools such as phone calls, emails, and video conferencing to engage with customers.
For more details, please refer to the following article:
[2024 Latest Edition] What Is Inside Sales? A Thorough Guide to the Roles and Strategies of New Sales Methodologies! ▶
The Importance of KPIs in Inside Sales and Effective Management Methods
KPIs (Key Performance Indicators) play a vital role as a means of evaluating business outcomes. These are intermediate goals set to achieve specific objectives. By achieving KPIs, you can ultimately look forward to reaching your Key Goal Indicators (KGI).
In inside sales as well, KPIs serve as evaluation metrics. By setting KPIs in advance and clearly grasping the degree of goal achievement, it is possible to accurately measure the status of sales and lead to improvements and growth.
To accurately evaluate the past achievements and strategies of the inside sales department, appropriate KPI setting is essential. Without precise KPI setting, you lose the benefits of properly evaluating your company's inside sales performance and discovering inefficient operations.
If KPIs are not set appropriately, you may end up continuously executing strategies with low cost-effectiveness, potentially causing the inside sales department to become a cost burden on sales activities. To prevent such issues, it is essential to clearly set appropriate KPIs and visualize the current status.
Selecting KPI Metrics Is Critical for Inside Sales
Here, we introduce five commonly used KPI metrics in inside sales. However, the optimal KPI metrics vary depending on the company's industry, business model, goals, and sales policy. Therefore, it is important for each company to find its own suitable KPIs while using the following metrics as a reference.
Important Data for New Customer Acquisition: Call Volume and Call Rate
In inside sales, call volume and call rate are frequently used KPIs. These are primarily used in sales activities to acquire new customers.
To find new customers, it is necessary to approach as many potential customers as possible based on a sales list. Therefore, the perspective of "how many calls were made" becomes an extremely important evaluation criterion.
Points for Expanding Sales: Number of Orders and Order Rate
The number of orders and the order rate are often adopted as KPIs in inside sales, primarily when the goal is to promote new customer acquisition or upselling to existing customers.
While the number of orders and order rate are often perceived as KPIs for marketing or sales departments, these metrics are also utilized in inside sales. As an increase in the number of orders and order rate leads to sales expansion, they are adopted as important evaluation metrics.
Metrics for Effective Communication: Open Rate
In inside sales, if email newsletter campaigns are actively adopted, the open rate also becomes an important evaluation metric. This is because email newsletters are a vital means of providing valuable information to prospects and building deeper relationships, making them an indispensable tactic for lead nurturing.
Therefore, the open rate, which indicates the percentage of sent emails that were opened and read by the target, is an extremely important metric in email marketing to show whether effective communication with prospects is being achieved.
Key to Developing Strategic Approaches: Number of Business Meetings and Meeting Conversion Rate
One of the most frequently adopted KPIs in inside sales is the number of business meetings and the meeting conversion rate. This is because, to nurture leads sufficiently through effective inside sales strategies and ultimately lead to the purchase of products or services, it is necessary to realize beneficial business meetings within the sales department.
Specifically, the perspective of "to what extent leads provided by the marketing department were converted into business meetings and smoothly handed over to the sales department" is an essential evaluation metric for measuring inside sales performance. Improving this KPI appropriately is a crucial step in establishing strategies and approaches that directly lead to corporate growth and revenue.
Important KPI Directly Linked to Business Success: Order Value
Setting order value as a KPI is effective for improving the quality of business meetings. This KPI is often used because it is directly linked to business success and is important for performance evaluation.
When setting order value as a KPI in the inside sales department, the total value of deals closed through inside sales activities is calculated. When it is determined that a deal was closed due to inside sales efforts, these results are reflected as order value.
How to Adopt KPIs According to Each Phase of an Inside Sales Organization
In inside sales, the KPIs that should be set are not always constant. They often transition across three stages: the initial, middle, and late stages of establishing an inside sales organization. Therefore, it is essential for corporate growth to grasp which phase your company is currently in and set appropriate KPIs for each phase. Below, we introduce the characteristics of these three stages and the points to consider.
Initial Phase: Targeting and List-Up Are Important
In the initial stage after launching inside sales, it is difficult to perform sufficient effect measurement or analysis of data, so it is important to first increase the volume of data.
Once a certain amount of data has been accumulated, it is desirable to focus on and approach high-quality leads. However, in the initial stage, it is also an effective strategy to provide leads that may be considered of slightly lower quality to the sales department and focus on data accumulation through the feedback received.
Middle Phase: Taking Optimal Actions Toward Success Through Hot Lead Analysis
Once inside sales enters the middle phase and a sufficient volume of data has been secured, you should be able to provide a stable number of business meetings to the sales department. From this phase, it is recommended to begin analyzing hot leads.
Previously, you provided leads to the sales department including those that might have been of lower quality, but from the middle phase onwards, it is important to shift to a policy of focusing on and providing high-quality leads to the sales department.
To effectively analyze hot leads, corporate information such as industry and business type, including company size, as well as lead attributes and business meeting information such as reasons for consideration, are generally utilized. While incorporating this information, you are required to develop strategies for further performance improvement.
Late Phase: Pursuing Number of Closures and Points for Maximizing Results
The period after a certain amount of time has passed since the launch of inside sales, when the meeting conversion rate has improved to 70% or more, is called the late phase. At this stage, where you are achieving excellent results, the next point to focus on is the number of closures.
In an inside sales department that has grown to this stage, many creative and effective measures can be deployed to increase the number of closures. By concentrating on the number of closures, it serves as a catalyst for further business growth in addition to improving the skills of the staff.
