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, inside sales primarily utilize remote communication tools such as phone calls, emails, and video conferencing to engage with customers.
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2024 Edition: What Is Inside Sales? A Comprehensive Guide to the Roles and Strategies of New Sales Methods ▶
The Importance of KPIs in Inside Sales and Effective Management Methods
Key Performance Indicators (KPIs) play a vital role in evaluating business performance. These are intermediate goals set to achieve specific objectives. By achieving KPIs, organizations can work toward reaching their Key Goal Indicators (KGIs).
In inside sales, KPIs serve as evaluation metrics. By setting KPIs in advance and clearly tracking progress, it is possible to accurately measure sales performance and drive improvements and growth.
Properly setting KPIs is essential for accurately evaluating the past performance and strategies of an inside sales department. Without precise KPIs, companies lose the ability to evaluate their inside sales achievements and identify inefficient operations.
Failure to set appropriate KPIs can lead to the continuous execution of cost-ineffective strategies, potentially turning the inside sales department into a financial burden. To prevent such issues, it is essential to clearly define appropriate KPIs and visualize the current status.
Selecting the Right KPI Metrics Is Critical for Inside Sales
Here, we introduce five commonly used KPI metrics for inside sales. However, the optimal KPI depends on the company's industry, business model, goals, and sales policy. Therefore, it is important for each company to identify the most suitable KPIs while using the following metrics as a reference.
Essential Data for New Customer Acquisition: Call Volume and Call Rate
In inside sales, call volume and call rate are frequently used as KPIs. These are primarily used in sales activities aimed at acquiring new customers.
To find new customers, it is necessary to approach as many potential leads as possible based on a sales list. Therefore, the number of calls made serves as an extremely important evaluation criterion.
Keys to 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 upsell to existing customers.
While these metrics are often associated with marketing or sales departments, they are also utilized in inside sales. Since an increase in the number of orders and the order rate leads to revenue growth, they are adopted as key performance indicators.
Indicator for Effective Communication: Open Rate
If an inside sales team actively employs email marketing, the open rate becomes an important evaluation metric. Email is a crucial tool for providing valuable information to prospects and building deeper relationships, making it 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 audience, is a vital metric for determining whether effective communication is being achieved through email marketing.
Key to Developing Strategic Approaches: Number of Meetings and Meeting Conversion Rate
One of the most frequently adopted KPIs in inside sales is the number of meetings and the meeting conversion rate. This is because, to effectively nurture leads and ultimately convert them into purchases, it is necessary to realize productive meetings within the sales department.
Specifically, the perspective of how many leads provided by the marketing department were converted into meetings and successfully handed over to the sales department is an essential evaluation metric for measuring inside sales performance. Improving this KPI is a critical step in establishing strategies and approaches that directly contribute 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 meetings. This KPI is frequently used because it is directly linked to business success and is important for performance evaluation.
When setting order value as a KPI for 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 the Phase of the Inside Sales Organization
In inside sales, the KPIs that should be set are not constant. They often evolve across three stages: the initial, middle, and late phases of the organization's lifecycle. Therefore, it is essential for corporate growth to understand which phase the company is in and set appropriate KPIs for that specific stage. Below, we introduce the characteristics and points to consider for each of the three periods.
Initial Phase: Targeting and List Building Are Key
In the initial stage after launching inside sales, it is difficult to perform sufficient data analysis or impact measurement, so the priority is to increase the volume of data.
Once a certain amount of data has been accumulated, it is desirable to focus on high-quality leads. However, in the initial stage, it is an effective strategy to provide leads—including those considered to be of lower quality—to the sales department and focus on accumulating data through the feedback received.
Middle Phase: Taking Optimal Actions for Success Through Hot Lead Analysis
Once inside sales enters the middle phase and a sufficient volume of data has been secured, the team should be able to provide a stable number of meetings to the sales department. Starting from this phase, it is recommended to begin analyzing hot leads.
While previously leads of varying quality were provided to the sales department, it is important to shift the policy toward focusing on high-quality leads from the middle phase onward.
To effectively analyze hot leads, information such as company size, industry, business type, lead attributes, and reasons for consideration are generally utilized. Incorporating this information and developing strategies is required to further improve performance.
Late Phase: Pursuing Number of Contracts and Maximizing Results
The late phase is defined as the period after a certain amount of time has passed since the launch of inside sales, where the meeting conversion rate has improved to 70% or higher. At this stage of achieving excellent results, the next point of focus should be the number of contracts.
In an inside sales department that has grown to this stage, many creative and effective measures can be deployed to increase the number of contracts. Focusing on the number of contracts serves as a catalyst for further business growth in addition to improving the skills of the staff.
