Adopt an increase in internal sales

The role currently undergoing the most dramatic changes in distribution is inside sales.

In a 2022 report titled “The State of the Distributor Customer Experience,” the Distribution Strategy Group found that 22% of end users have never wanted a distributor sales representative to visit the company. About 20% say they would be satisfied with just once a year.

This shows that customers want much less face-to-face interaction with your team.

According to Forrester, the number of B2B sales reps in the field declined by 25% between 2014 and 2020. E-commerce and the development of the inside sales function were considered to be the main drivers of this change.

By 2025, we expect that the typical distributor will employ more internal salespeople than external salespeople.

Historically, distributors have been reluctant to change their traditional sales models. They believe that the removal of a field representative leads to a restriction of activities in that territory. However, according to our research, 80%-98% of customer purchases are products they have previously purchased from a distributor. As long as the replacement is not incompetent, repurchase volume should remain constant.

Many distributors have a sales structure – and associated costs – similar to that of 50 years ago. Field sales representatives still perform many tasks that can and should be performed by less expensive people, such as delivering products to customers, creating offers, and checking prices and availability with suppliers.

Not only is today’s market different, but the data available exceeds what we could have imagined even 10 years ago. Once you understand your customers’ needs by geographic location, market segment, service performance, travel required, how reps spend their time, etc., you can adjust your structure to meet them.

We believe that distributors can reach more customers more effectively and at lower costs than they currently can. We typically find that more than 20% of accounts assigned to an outside sales rep can be moved to another, less expensive function, such as inside sales.

When customer needs are met by an inside sales rep, you can focus your field reps’ roles on creating the market rather than serving it.

In order to clarify: Inside sales is not just another name for customer service representatives. Inside sales representatives can play a much greater and proactive role in supporting customers and meeting their needs. This way, distributors can reach more customers more effectively at lower costs.

Benefits include:

Savings: : PointClear found that an external sales call costs the company $308, while an internal sales call costs the company $50. What’s more, inside sales reps spend 13% more time actively selling than outside sales reps. Inside sales representatives are the best choice for distributors who want to increase sales and reduce costs – especially for mid-market customers.

Consumer satisfaction: : If you use your internal sales resources to focus on customers who haven’t received much attention in the past, these customers will feel more loved. And as the focus of field sales reps shifts to market making activities, larger, high-growth clients will also see their needs met in a more meaningful and value-added way.

More sales: Reaching more customers with more regular touchpoints opens the gate to discovering gaps in how you serve them. Can you let them know what else you can sell? Where else can you support them? Keep them coming back for more?

To evaluate your sales structure, follow these steps:

• Step 1: Compare yourself to industry leaders and determine whether you’re ahead or behind the competition. Evaluate other sales models, including hybrid sales models, and the role digital channels currently play in your business. Talk to your customers.
• Step 2: Determine where you are behind and make small changes to start. Set goals and create actionable steps to achieve them.
• Step 3: Make the change. Find ways to increase engagement. As with any process, there will be resistance, but the secret to successful change is getting your team on board early on. Implementing a CRM system to capture important customer data is a good start and will enable your team – outside sales, inside sales, CSR specialists, technical specialists, sales administrators and more – to stay up to date.

This is all part of an effort to narrow the role of the field representative to one that focuses on new business development and demand creation. Key customer service responsibilities are separated from demand creation, and the skill sets are most relevant to each and they can specialize in what they do best.

Mike Marks is a founding partner of Indian River Consulting Group and a long-time distribution manager.