Increasing the Reach and Performance of B2B Inside Sales
BEST PR ACTICES Increasing the Reach and Performance of B2B Inside Sales Many companies have set up B2B inside sales teams to help reduce sales costs. Too often, those teams are not delivering all they could. Inside Page 4 Working with a Partner When working with outsourcing partners for B2B inside sales, there are several best practices that companies should consider Page 5 Case Study: Contract Renewals By segmenting customers based on the value and complexity of transactions, an inside sales group increased renewal rates Page 6 The Virtual Sales Rep A virtual workforce gives inside sales organizations greater flexibility—which then supports enhanced business continuity Long experience with inside sales has enabled Convergys to identify a number of leading practices to help these operations reach more customers with increased efficiency and effectiveness, and take on a broader role in the sales process. When properly equipped and managed, B2B inside sales teams make the outside field sales force more effective, boost sales, strengthen relationships in indirect channels, and help the company understand and target customers with increased precision. By employing these practices, B2B inside sales teams can be a vital driver of reduced costs, increased customer satisfaction, and growing revenues. BEST PR ACTICES Increasing the Reach and Performance of B2B Inside Sales Work with numerous companies has shown that with the right tools and techniques, inside sales teams can play a bigger role in driving increased sales to business customers. Today, companies operate phone-based inside sales organizations as a way to mine specific business-to-business (B2B) markets without incurring the higher costs of an outside field sales force. Yet many of these companies are not getting all they could out of those organizations. A pharmaceutical company increased annual sales by $2.35 million—well over the goal of $1.75 million. In addition, the inside sales group won the company’s prestigious President’s Club Award two years in a row for its impact on overall sales. Too often, B2B inside sales is given short shrift, and a narrow mandate to bring down the cost of sales. But the potential of these groups is far greater. When properly equipped and managed, they help extend the company’s reach, drive increased revenues, increase customer satisfaction— and still bring lower costs. A pet food company saw a 10-year run of year-over-year increases in sales—including a 10 percent increase in 2008, despite the economic downturn. Meanwhile, zero percent turnover in sales reps helped strengthen relationships with customers. Many companies are missing these opportunities, however—and they are doing so in an era when improvements are more important than ever. Economic upheaval and cost pressures have forced many companies to cut back on the field sales force. Competition for customers continues to grow. And, says Helena Lawson, senior vice president of Specialty Operations at Convergys, “this is a time when companies are trying to turn over every rock they can to increase revenues.” Convergys has been working with clients to support B2B sales for more than 25 years, and this body of experience has shown that by rethinking their approach to inside sales, companies stand to reap significant benefits. For example, in Convergys’ inside sales engagements: A packaged-goods company grew sales by 40 percent over eight years, reaching about $600 million in annual revenue, while reducing the cost of sales by 90 percent. 2 From these and other experiences, Convergys has developed a number of best practices for strengthening inside sales, making it a key component in overall sales efforts. Partner with the field sales force Inside sales is a more or less stand-alone operation, selling to its own distinct set of customers. Convergys has found that it can be a powerful complement to the field sales force. Inside sales is effective in supporting outside salespeople by helping them with time-consuming administrative work— important, but non-value-adding tasks that are vital to the overall sales process and typically involve a level of sales skills. For 10 Key Questions To get the most out of B2B inside sales, executives should assess current operations and potential opportunities by asking several key questions: example, in the retail industry, this could involve writing and following up on orders or working to coordinate merchandisers’ activities in setting up in-store displays. In telecommunications, inside sales could help with the provisioning and set-up of service. And in the technology industry, it could be scheduling maintenance and re-enrolling customers in service contracts. Inside sales can also work with the outside sales organization to extend that group’s reach. “The field sales organization might touch the headquarters of the customers they are calling on, and then the inside team could touch all of the flanker locations in branches and remote offices, with the work of the two groups being carefully coordinated,” says Patty Lillge, Convergys director of B2B Specialty Operations. In all these activities, it is a good idea to align the inside and outside groups from an organizational perspective. A company might have an inside person matched up to three field people as their “territory,” for example. Such an alignment would allow the inside person to be involved in planning meetings and forecasts for that specific area and to build relationships and learn the territory. Instead of getting a big calling list and divvying up the work randomly, the work becomes very structured and focused. This partnering approach frees up costly outside sales resources to focus on selling and helps increase overall sales productivity. It also helps engage and motivate the inside team. “Being a partner in the whole process makes people feel empowered to deliver and creates a greater sense of ownership for results,” says Lillge. Is our B2B inside sales organization driving the revenue that we expect? Are we able to effectively reach lowervalue customers at the right cost-toserve? Use inside sales to strengthen indirect channels In many industries, B2B sales relies heavily on indirect partner channels, such as distributors and resellers, to drive sales. This approach can create a number of challenges because the company does not touch the customer directly. Channel partners may have varying levels of ability and motivation. And, handling a portfolio of products from a variety of companies limits their ability to focus on differentiating any single offering. “Inside sales can be used to bolster those indirect channels and augment partners’ efforts to give companies more control over their destiny,” says Gregg Hough, executive director, Global Operations, at Convergys. The inside sales team can be used to enhance communications with channel partners and increase their awareness of product improvements and new promotions. Much like supporting the direct field sales force, the inside team can also help indirect channel partners with billing, fulfillment, and other administrative burdens—tasks that partners are often not equipped to perform, and which they may regard as barriers to working with a supplier. Are we using inside sales to make our field sales force more productive? Are our partner channels producing as much revenue as they could? How can we use automation to enhance our inside sales efforts? Do we have the flexibility and business resiliency we need in our inside sales group? Do our inside reps have the depth of professional sales skills they need? Are we doing all we can to manage the performance of inside sales to deliver results? Does our customer segmentation process truly help our inside sales group focus the right offers on the right customers? Are there sales-related processes across the company that could be better handled by the inside sales group? At the same time, the inside team keeps in touch with end customers served through the indirect channel, helping them understand product features and benefits and ensuring timely delivery, while referring them to the 3 Working with a Partner As companies focus on their core competencies, a number have turned to outsourcing partners to handle B2B inside sales. Experience has shown that there are several best practices to consider when taking this approach. Draw on the best of both worlds. In-house and outsourced sales teams should be viewed as complementary, rather than competitive. It is possible to retain the company’s strategies and basic processes, while at the same time adding on the outsourcer’s best practices and technologies to enable sales growth and greater efficiencies. Consider pay-for-performance. Some outsourcers will offer flexible pricing and shared-risk-and-reward plans, which helps reduce risk and aligns with the pay-for-performance culture of an effective inside sales team. Build chemistry. The outsourcing of B2B inside sales is different than simply outsourcing sales, especially when channel partners are involved. Communication and cultural alignment are especially important, so establish shared policies and procedures, include inside sales in overall planning efforts, and ensure that there is adequate management support from both sides. Plan for success. Effective inside sales operations can be leveraged across the organization in a wide range of activities. As a result, it’s important to look ahead to potential expansion, and consider factors such as global footprint and operating models, multilanguage support, and scalability of operations when outsourcing. 4 channel partner for actual purchases. “This lets you establish direct contacts with end customers and create greater continuity in your communications with them, without undermining the partner,” says Hough. “You’re basically enabling that channel to work more effectively.” Bring greater granularity to segmentation efforts As with any sales effort, the segmentation of customers helps ensure that B2B inside sales teams are able to provide the right offers to the right customers. Segmentation also lets companies ensure that sales reps have the knowledge and skills needed to serve specific types of customers. Standardize and centralize Quite often, B2B inside sales teams are fragmented and decentralized, having been set up in small groups within departments and divisions. In most cases, these groups should be linked and managed centrally. Doing so can provide more cohesiveness and consistency across inside sales efforts, and help to reduce the need for costly, redundant infrastructure, especially when sales reps are consolidated into physical facilities. At the same time, companies should establish consistent standards and processes for use by all inside sales teams, and as much as possible, those should be the same approaches used by the outside sales teams. Though this may sound obvious, it is not unusual to find disparate and disjointed processes in place in an inside sales operation. Centralization and standardization create operational consistency that makes it easier to share information, roll out new sales tools and processes, and “learn” as a sales organization. It also enables companies to reallocate salespeople as needed and makes it easier to transfer work from one team to another to handle spikes in workloads, new product launches, or business disruptions. Moreover, it provides a consistent face to the customer company as it touches different aspects of the sales organization. Today, inside sales operations can use analytics tools to take a more granular approach to segmentation that looks beyond macro factors, such as customer revenues and specific industries. Companies can begin with a base segmentation, says John Georgesen, senior director of Analytics at Convergys, that essentially assesses the value of the customer to the company. “Here, you’re looking at things like how long a company has been a customer with you,” he explains. “How much do they buy from you, what types of things do they buy from you, how valuable are they to you?” With that base segmentation in place, additional analyses are used to dig deeper and develop a specific understanding of the products and services that customer segments want, as well as the way that they want to be treated—how they want to purchase, what channels they might use, etc. Such analyses also let companies predict future customer needs and behaviors and identify their potential to support growth. And analytics can enable companies to spot trends and changes in behavior that indicate increased potential or greater risk—things that might call for a shift in sales strategy. In all, a more granular approach lets inside sales work with segments that are practical, measurable, and actionable. Such an approach makes it possible to tailor sales processes to each segment and invest in sales efforts that are most likely to pay off. C A S E S T U DY Growing Your Business Through Lifecycle Management The Inside Track on Contract Renewals In the late 1990s, a global technology company was concerned with low rates of renewal on service contracts and wanted to bolster that business. In particular, the company wanted to improve its ability to renew contracts with its numerous lowervalue customers while keeping the cost of sales low. The company worked with Convergys to create an inside sales group to handle renewals among U.S. customers. In staffing this group, Convergys focused on hiring, training, and retaining sales professionals and instituted a pay-forperformance system. Source: Convergys relationship management,” says Lillge. For example, when establishing self-service channels, it is important to integrate those with the live representative channel, so that customers can easily move from one to another as they desire. Take a balanced approach to technology and people Automated self-service channels are an effective, low-cost way to reach various market segments—especially relatively low-dollar and low-profit customer companies that do not warrant significant attention from representatives. Such systems can provide a good customer experience and should be an integral part of the inside sales operation. Inside sales, though, is a field that relies very much on human interaction. As a result, companies need to take a balanced approach that encompasses both the technology and the inside sales team. “You need to leverage the combined sales professional and automation options to optimize the business process, blending and balancing self-service and ‘live’ Technology helps sales reps be more effective in selling. Like outside sales groups, B2B inside sales needs to have CRM systems that let them access customer information, track customer interactions, and stay in step with customers. Similarly, online knowledgebases enable the inside sales organization to capture and use information that is kept in sales reps’ heads, with varying degrees of accessibility to others in the organization. A knowledgebase housing information about products and policies, best practices, approaches to problem solving, and a range of informal information, based on reps’ experience, can be very useful when shared across the organization. In particular, Convergys has found this to be especially effective in capturing the practices of top sales performers and incorporating those into the knowledgebase—because, says Lillge, “sales is as much an art as a science.” At the same time, Convergys developed a systematic process for generating contract renewals. Customers were segmented into groups based on the value and complexity of their transactions, such as “low-value/simple” transactions and “midto high-value/complex” transactions. The Convergys inside sales team focused on the low-value group, while the company’s sales force worked with the high-value group. Another Convergys team provided administrative support to both sales teams. These teams have now been in place for more than a decade. Today, the Convergys administrative group supports about $4 billion in sales through the company’s sales force. Meanwhile, the Convergys inside team’s role has been expanded to include high-value customers, collaboration with channel partners, and support for the company’s presence globally. Currently, the inside group’s cost of sales runs in the low single-digit percentage range. Contract renewal rates are consistently in excess of 75 percent, compared to the 30 percent rate seen at the time the group was set up. And the group currently books some $2 billion in renewal sales for the company. 5 Sharing the Load Virtual Reps, Tangible Results Various industries can benefit from the coordinated partnering of field and inside sales groups to provide a comprehensive, highly effective approach to sales. In customer service, the virtual workforce—that is, sales professionals working from home—has proven to be an effective way to complement the brick-and-mortar-based workforce. And that model is now emerging as a best practice in B2B inside sales. Working at home, sales reps access the same tools used by the on-site workforce, from CRM applications and knowledgebases to performance management systems. This can provide some savings in terms of facilities and infrastructure, but the virtual model’s real value lies elsewhere. For example, it lets companies access a greatly expanded pool of candidates, making it easier to find people with specific sales and account-management skills, as well as any required business and industry knowledge. And these virtual sales reps tend to have higher levels of engagement and satisfaction, leading to increased productivity, reduced absenteeism, and ultimately, stronger customer relationships. The virtual workforce also gives the inside sales organization the flexibility needed to handle workload changes due to marketing campaigns, promotions, and product launches. Work is easily shifted across the virtual workforce since sales reps can be scheduled for just a few hours to cover peak times, as opposed to having them come to a center for a full shift. Such flexibility also supports enhanced business continuity. With a geographically dispersed workforce, it becomes easier to maintain operations in the event of a natural disaster, pandemic, or major outage—which means that vital revenue-producing operations are not disrupted. 6 Source: Convergys take advantage of times when sales activity is slow to hone their skills or pick up new product information,” says Hough. “They can pull up the learning program on the job, rather than having to take time away to attend formal training sessions.” Make learning an ongoing, continuous activity Products, customers, and competitors keep changing, so it is critical that inside sales organizations keep their skills and knowledge current. Today’s online training is very effective in letting inside sales representatives keep learning and in making learning a continuous, rather than an occasional, event. “Online, ondemand learning lets sales professionals Companies can also use “performancebased learning,” which essentially provides very focused learning on an as-needed basis and even allows companies to push the appropriate learning out to individual representatives. For example, if performance monitoring shows that a sales professional is having repeated problems with a particular part of the sales process, the system will automatically provide that individual with the appropriate learning materials that target that specific problem. Again, this can be delivered during relatively brief periods of low work volumes, so that the inside sales representative doesn’t have to take significant time away from selling. “With this approach, you’re managing the learning more systematically, and you’re also able to kick it into gear based on the actual skills that the inside sales representative needs,” says Hough. Leverage real-time analytics in frontline sales operations Analytics tools and technologies can benefit a range of day-to-day operational areas, and inside sales is no exception. In essence, real-time analytics lets companies pull together information from a variety of sources, analyze it, apply business rules to it, and use it dynamically to support frontline sales decisions. For example, a system now in use combines segmentation information with real-time intelligence about a customer company and its situation to help sales reps understand how to best sell to that customer. When the rep is on the phone with the customer, the system will quickly assess the customer’s lifetime value, his or her history from billing and CRM systems, and the seller’s relevant products and marketing activities. It then provides a targeted recommendation for that customer. “The system might let you know that a product that the customer has been using is being discontinued, so you should move them into a replacement product,” says Jo Ann Parris, vice president of Vertical Marketing at Convergys. “Or it might say that there are promotional funds available in six months, so you can tell the customer, ‘You don’t want to miss this opportunity—let’s get a business plan developed now to take advantage of that.’” The customer gets a timely, relevant offer, and companies build segment-based sales policies into the system, rather than relying on individual reps’ judgments in following those policies. With that type of system, customer intelligence can be built into automated IVR and Web channels, enabling them to “know” the customer and be more effective. Companies can also build on this platform to automatically send targeted outbound notifications to individual customers via voice, email, or text, giving them early warning about events such as contract expirations or product upgrades. The customer can follow up through an automated channel, or with the sales rep. Instill a sales mind-set and culture To be effective, inside salespeople need to be managed as career professionals. This begins with recruiting that is focused on inside sales and hiring people with the right attitudes and behaviors for sales. “We believe that we can train them on processes and products—but we want to have that foundation of being oriented to sales,” says Hough. Once reps are on board, training and development should focus on cultivating people into being advanced sellers. This way a company takes what sales reps already know and then builds upon it with selling skills, negotiating skills, learning to sell against the competition, interpersonal relationships, account management, and the like. In short, says Hough, “you hire the right person and then you really train them to build relationships over the phone.” The inside sales organization should also use performance management systems that let managers track quality and results to support coaching and, especially, Shaping the Inside Sales Professional Sales is a “people-oriented” activity, and that makes effective professional development for inside salespeople a critical best practice. This should encompass such factors as: Onboarding. The company should provide a tailored training curriculum specifically designed for new hires, typically delivered in the classroom. This training should be followed by a “nesting” process that puts new hires into administrative roles that support sales, which enables them to understand the full end-to-end process. Sales delivery. Companies should provide salespeople with consistent feedback and coaching through weekly one-on-one meetings with supervisors. This can be done using performance management scorecards with clearly defined outcomeoriented metrics. Ultimately, performance measurements should drive a pay-forperformance compensation model. Quality management. Inside sales groups should track sales techniques and behaviors through call monitoring and quality metrics. Quality processes should focus on providing sales reps with actionable directional feedback and fostering the sharing of best practices across the inside sales team. Training/learning. Ongoing training and coaching should reinforce selling skills and include product and client knowledge and selling skills, such as identifying buying cues, communicating with confidence, effective listening, tailoring the sales presentation, and closing techniques. A blended approach, involving both instructorled training and e-learning, is effective. Working with one technology company, Convergys used targeted training to cover topics such as product knowledge and sales skills, which reduced average time-in-training per employee by two-thirds, and shortened product-specialist certification time by 60 percent. 7 pay-for-performance compensation—a fundamental part of any effective sales culture. Convergys has found that in most cases, compensation should be based on a combination of team and individual performance, weighted toward the individual’s results. “That’s been a key learning over the years,” says Hough. “If we put it all on the individual, we don’t get what we need from the team. If we put it all on the team, we don’t get what we need from individuals. It has to be both.” Meanwhile, performance metrics should be focused on how well sales are going, rather than simply measuring activities such as the number of calls made. Take a broader view of the inside sales role As discussed above, B2B inside sales can play an expanded role in the overall sales process by collaborating with outside sales and channel partners—and that’s not all. Convergys has found, for example, that the inside sales organization is a useful vehicle for supporting beta tests of new products before they are rolled out. Similarly, companies can use inside sales to test the functionality of new sales tools and processes before they are put into use with sales teams across the company. Greater Reach, Less Cost Inside sales teams can also be given full responsibility for supporting the launch of a product or selling a specialized product into a particular market. Once provided with the necessary specialized skills, they can leverage those skills across a large geographic region. “In sales today, you have to do more with less,” says Lillge. “The right approach to inside sales helps you increase your focus on the ‘do more’ part of the equation, while you’re maintaining the emphasis on ‘with less.’” The inside sales group can also act as a repository for institutional sales knowledge. When centralized, such groups are in a position to share and capture lessons learned about clients, selling processes, and the company’s overall sales culture. They can then train new hires in the outside sales force, which is usually widely dispersed and often experiences significant turnover. Corporate Headquarters Regional Headquarters North America Europe, Middle East, & Africa Latin America ~ These types of practices transform B2B inside sales from an organizational afterthought to a powerful driver of sales. An effective team can contact customers more often, reach new types of customers, increase satisfaction, and boost revenues. It can not only achieve success in its own right, but also help field sales and channel partners succeed. About Convergys Convergys Corporation (NYSE: CVG) is a global leader in relationship management. We provide solutions that drive more value from the relationships our clients have with their customers. Convergys turns these everyday interactions into a source of profit and strategic advantage for our clients. For more information, visit www.convergys.com. 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