We make specialized pipe fittings. When the company first started, everybody worked at our main site down in the industrial district. Even the salespeople worked there behind a counter. Customers would stop by to pick up parts they needed. They could get answers to questions about problem situations and learn about new kinds of fittings. As we started to grow, some of the salespeople would go out to job sites and talk to customers there. They learned a lot about how customers use our product and what they needed from us.
Gradually more and more of the salespeople spent most of their time away from the corporate office. Some of them even relocated to distant cities so they could serve those customers better. They became a kind of independent business-person because they did everything—they found new customers, educated them, took orders, and answered service questions. Sometimes they even helped design new solutions that required engineering to get involved.
Sales Used an Outside-In Business Model, Everyone Else Worked Inside-Out
In some ways it was like we had two companies. One of them operated from the inside-out, the other from the outside-in. What do I mean by that? Let me explain.
Take the accounting department. In the early days we had a bookkeeper who tracked all the accounting activity—payables, receivables, payroll, and cost-accounting. Over time as we expanded we added people who each specialized in one of these areas. With the division of labor each person became very good at their specialty. We developed a well-defined process for completing the accounting work each month. Each person understood how their work was scheduled to complete their tasks on time. When necessary we would go outside the company for additional specific services like taxes and financing. It’s an inside-out model.
Sales on the other hand operated from the outside-in. We would add salespeople in different regions and each of them essentially had the same job because they each did everything in their territory—prospecting, selling, servicing, and administration. On complicated or unusual situations they would reach into the corporate office to get help on a specific solution design or approval for special discounting.
Of course, sales was the only department that operated this way. Everybody else—production, new product engineering, legal, human resources—operated with an inside-out model.
I think the salespeople liked it. They were all independent types who enjoyed working on their own and running their own small business. Of course, they often made our lives a little too exciting with their requests for product changes, for special discounting, and with the rush of orders they sent us at the end of every month.
The World Changed and So We Changed Too
More recently though, sales has started to change in our company. Two external forces caused this change. One was that more and more customers needed engineering changes for their specific situation. These requests caused both engineering and sales to get bogged down in the solution design and prevented them from completing their other work.
The second change was communication. It just became less and less necessary for the salesperson to visit the customer site. In fact, customers actively worked to prevent salespeople from visiting because it took too much of their time.
To respond to these external shifts, we have begun to make some changes.
First, we added customer service people at corporate to handle all the routine transactions, mainly generating quotes, entering orders and responding to customer issues.
Next we added some inside salespeople. These salespeople do nothing than conduct meaningful selling conversations with customers via phone, email or text. It was surprising how many customers actually preferred talking to the inside sales reps. The calls were faster and they could easily add an engineering specialist to the call if they needed it.
By this time we stopped hiring new field salespeople because so much of the work was being done by customer service and inside sales at corporate.
Some Surprising Benefits from Our Changes
Something else happened that surprised us. It became easier to hire young people out of college. In they past these potential recruits were turned off by the freewheeling sales culture and by the need to work remotely. They wanted to work with other people. Once we we started talking to them about our customer service and inside sales groups, they became a lot more interested.
We began to learn that sometimes inside sales would run up against a technical roadblock with the customer. In these situations we would send a technical field specialist out to the customer to solve the problem. Their purpose was not to conduct critical selling conversations, those were left to the inside salesperson.
More and more of our customer interactions were being conducted by customer service and inside sales. However, we still had some large customers that needed a field salesperson to visit their site. So we have continued to employ field salespeople, but we made one crucial change.
Instead of structuring the work of the salesperson so that they planned and scheduled their meetings, we assigned a business development coordinator at corporate to schedule these calls. The customers loved it because they didn’t have to play phone tag with the salesperson to schedule the onsite meetings. And although the salespeople resisted at first, they began to prefer this approach also because the business development coordinator acted as a kind of executive assistant for the salespeople. The salespeople were relieved from all the scheduling and could focus on their selling activities.
Full Circle: Sales Is Now an Inside-Out Organization
Now we’ve come full circle. Like the other departments in the company, the sales group has adopted an inside-out model. The core transactions are conducted by the internal teams in customers service, inside sales, and by the business development coordinator. We go outside corporate (though still within the company) when we need the services of a field specialist or a field salesperson (business development manager).
We’ve reduced the number of salespeople. Customers are happier and so is the staff. We are meeting our forecasts. And most important, because people are working at corporate in teams, we are seeing many opportunities to improve the process we use to find, win and keep our customers.