Choice Point: Should Vendors Expand Inside Sales?

The pandemic showed that selling through inside and virtual sales works. The question is whether to increase capacity even if it conflicts with channel partners.

By Larry Walsh

Inside sales teams, the oft-overlooked and underappreciated warriors of the call center, earned star status over the past year as the COVID-19 pandemic grounded their field sales counterparts. As customers suddenly found themselves working from home, they turned to inside sales channels for their technology needs. And, interestingly enough, the pandemic made every outside rep an insider by necessity.

The question being bandied about by channel chiefs: Should their companies expand their inside sales teams? And if they do, what impact will that have on channel partners?

The concern is that increasing inside sales will negatively impact channel partners, which will see this as competing business, at best, and as a violation of trust, at worst.

This issue was brought up to Channelnomics by one of our CiQ members, who thought the concern and resistance have a deeper meaning and, potentially, a different solution than the conflict perceived by channel chiefs.

Building Pressure on Channel Performance

Let’s face it: Most channel partners aren’t good at sales or marketing. They’re heavily reliant on vendors for demand generation, lead cultivation, and sales support. Getting partners to meet and exceed sales requirements is the top challenge cited by vendors in this year’s Channel Chief Outlook report.

Vendors and partners are feeling pressure on two fronts. On one side, there’s the growing efficiency of inside sales, which was highlighted by the pandemic. On the other, marketplaces are steadily eating into the channel, providing customers with automated and virtually self-serve access to products and services. The larger a vendor in terms of gross revenue, the more pressure it’s under to justify the channel’s value.

The unfortunate reality is that inside sales are an option, and the pandemic proved they work. Inside sales have similar rules as marketplaces in terms of their validation. The marketplace rule is that you get the human out of the sale if the human isn’t necessary. If it’s not a complex process or product, let the call center handle the load for inside sales.

For those wondering whether expanding inside sales capacity is a good idea, the answer is affirmative – at least for 2021. The pandemic conditions won’t roll back quickly, even with expanded access to vaccinations. Live events and business travel won’t likely return until 2022. Even then, many sales motions will shift to new channels – including inside sales and marketplaces.

Behind the Resistance

Not all inside sales are direct. The temptation to make them direct, particularly with commodity products, is there. In some cases, vendors should take sales direct with inside or field sales expansion. Simply put: Partners aren’t always necessary in the go-to-market equation. And, in truth, partners aren’t very good at sales, as we mentioned before.

In this year’s Channel Chief Outlook report, vendors say their top challenge is getting partners to meet or exceed sales targets. More than one-third say they’re struggling to get partners to adopt new products and business models. According to our Channel Forecast report, partners concur, with struggling to meet sales expectations as their top challenge.

Expanding inside sales is a threat not just to partners but to channel professionals as well. If you can sell more product through inside sales and marketplaces, what need is there to invest in and support channel operations, marketing, and support? What happens to all the jobs and careers built on the premise that the channel is paramount to sales and revenue effectiveness?

It’s simply human nature to resist change and disruption. Many a strategic shift in the technology market has stalled under the weight of internal resistance to change. The idea of shifting more sales away from the channel will be met with friction.

From Channelnomics’ perspective, shifting product sales – particularly of commodity products – away from the channel isn’t a bad thing. It could spur a reinvention of the channel. Many partners are adapting to changing market conditions and customer demands by bulking up on application development skills. In services and marketplaces, partners could play a vital role in delivering persistent customer support that facilitates positive experiences.

Ingram Micro’s Kirk Robinson is famous for saying that we should “get comfortable with being uncomfortable.” Even if it creates friction with partners and disrupts channel organizations, expanding inside sales is a trend worth considering.

Larry Walsh is the CEO, chief analyst, and founder of Channelnomics. He’s an expert in the development and execution of channel programs, disruptive sales models, and growth strategies for companies worldwide. Follow him on Twitter at @lmwalsh_CN.