What Is Inside Sales?
Inside sales is a sales methodology conducted from within the office. While traditional field sales (outside sales) involves visiting customers directly to conduct 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 Explanation of the Roles and Strategies of New Sales Methodologies! ▶
The Importance of KPIs in Inside Sales and Their Effective Management
KPIs (Key Performance Indicators) play a vital role as a means of evaluating business performance. These are intermediate goals set to achieve specific objectives. By achieving KPIs, you can 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 sales situation 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 setting KPIs accurately, 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, and the inside sales department may become a cost burden on sales activities. To prevent such problems, 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 KPI metrics frequently used in inside sales. However, which of these KPI metrics is optimal depends on the company's industry, business type, goals, and sales policy. Therefore, while using the following metrics as a reference, it is important for each company to find the KPIs that are uniquely suitable for them.
Important Data for New Customer Acquisition | Number of Calls and Call Rate
In inside sales, the number of calls and the call rate are frequently used KPIs. These are mainly 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 reason the number of orders and the order rate are adopted as KPIs in inside sales is often to promote the acquisition of new customers or the upselling of existing customers.
You might have the impression that the number of orders and the order rate are mainly used as KPIs for marketing or sales departments, but these metrics are also utilized in inside sales. Since an increase in the number of orders and the 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 initiatives are actively adopted, the open rate also becomes an important evaluation metric. This is because email newsletters are important as a means of providing valuable information to prospects and building deeper relationships, and can be said to be an indispensable initiative for aiming at 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 that shows whether effective communication is being achieved with prospects.
Key to Developing Strategic Approaches | Number of Business Meetings and Meeting Conversion Rate
One of the KPIs frequently adopted in inside sales is the number of business meetings and the meeting conversion rate. This is because, in order to sufficiently nurture leads through effective inside sales strategies and ultimately lead to the purchase of products or services, it is necessary to realize beneficial business meetings in 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" becomes an essential evaluation metric for measuring inside sales performance. Properly improving this KPI can be said to be an important step in establishing strategies and approaches that are directly linked 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 conducting performance evaluations.
When setting order value as a KPI in the inside sales department, you aggregate the cases that were closed through inside sales activities. When it can be judged that the efforts of inside sales led to a contract, 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 over three periods: the initial, middle, and late stages after the launch of an inside sales organization. Therefore, it is essential for corporate growth to grasp which phase your company is currently in and to set appropriate KPIs for each phase. Below, we introduce the characteristics of these three periods and the points to consider.
Initial Phase: Targeting and List-Up Are Important
In the initial stage after the launch of inside sales, it is difficult to perform sufficient effect measurement and 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, but in the initial stage, it is also an effective strategy to provide leads considered to be of somewhat lower quality to the sales department and focus on data accumulation through the feedback obtained.
Middle Phase: Taking Optimal Actions for Success Through Hot Lead Analysis
When inside sales enters the middle phase and the volume of data has been secured, you should be able to provide a certain number of business meetings to the sales department stably. From the time you enter this phase, it is a good idea to start analyzing hot leads.
Previously, you provided leads including those that might be of somewhat lower quality to the sales department, but from the middle phase onwards, it is important to switch 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 the Number of Contracts and Points for Maximizing Results
The period after a certain amount of time has passed since the launch of inside sales and the meeting conversion rate has improved to 70% or more is called the late phase. At this stage of achieving excellent results, the next point to focus on is the number of contracts.
In an inside sales department that has grown to this stage, many creative and effective initiatives to increase the number of contracts can be deployed. And by concentrating on the number of contracts, it becomes a trigger that brings about further business growth in addition to the improvement of the skills of the staff.
