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Increasing Inside Sales Effectiveness
Many banks are looking to build their inside sales capabilities in an effort to establish profitable servicing models for small businesses. Unlike “infield” sales, inside sales teams rely on phone calls to cross-sell treasury products to small businesses. This scaled approach to selling typically starts in the branch, where branch staff build a referral list of companies too small for infield staff to serve profitably. (Depending on the bank, this referral list can target businesses anywhere from $1 to $10 million in revenue.) Once the inside sales officers receive the referrals from the branch, they pursue and complete all parts of the sale, from prospecting to pre-implementation paperwork.
Inside sales people earn much less than their infield counterparts—40% less according to averages from GCI’s Treasury Sales Benchmark. However, benchmark data also shows that inside sales can be highly productive—almost as productive as infield sales. The average inside salesperson generates 90% of value booked by infield business bankers. As a result, average ROI for inside sales people is 46% higher than it is for infield ROI. The clear scale benefits of inside selling have led many banks to expand their inside sales force. In one recent case, our research helped a top-20 bank repurpose generic call centers for more specific cross-sell opportunities.
As a scale operation, inside selling works best with high deal volumes and low deal values. The data below indicate that above-median ROI inside sales people close over two and a half times more deals that their below-median ROI peers. While above-median sales people close smaller deals, the difference in deal volume makes up for the difference in deal size.
In order to achieve these high volumes, above-median inside sales people must complete deals quickly. The Treasury Sales Benchmark finds that those with above-median ROI sell simple add-on products, not complex bundles. Above-median inside sales people sell more wire, online banking and check return services than the average business banking sales officer. These simpler products have shorter sales completion cycles, which allows above-median ROI inside sales people to complete 2.3 deals per business day. By contrast, below-median ROI inside sales people complicate more of their deals with product bundles, which leads to a longer sales completion cycle. Below-median inside sales officers close less than one sale per day, and over the course of a year, that productivity difference adds up.
Since inside sales people cost less than traditional business bankers but generate similar revenues, an effective inside sales team is a great place to look for more efficiencies in serving small businesses. To make the most of this opportunity, banks should focus inside sales officers on simple add-on products at high volumes. For more insights on inside sales or other issues related to treasury salesforce effectiveness, contact Ryan Cope.