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What Is the Best Inside-To-Outside Sales Ratio?

Written by Mike Marks on Wednesday, 25 October 2017. Posted in Distribution

The ideal ratio for inside sales to outside sales ranges from 1:1 to around 10:1. To find your ideal ratio, consider the current reality inside your company and that of others in your industry.

First, ask yourself some questions: How are outside salespeople spending their time, what is the value of those activities and how many of those activities are being done? How much of that can you offload to the inside sales team while still meeting customer expectations?

It also helps to look at benchmarking. Most trade associations offer reports that show the staffing ratio in that industry. Just remember that if you are innovating, which means finding ways to add value to customers that they are willing and able to pay for, you don’t necessarily want to copy what’s going on in the industry.

What does all of this translate to? In industries like industrial and construction distribution, the ratio of inside to outside reps may be somewhere between 2:1 or 4:1, depending on the role of counters and how you factor in those counters. In OEM, inside salespeople should often be running the organization, with a ratio of 10 inside salespeople to 1 outside salesperson.

Field sales reps in this 10-1 scenario are hunters that disrupt the competition, but they don’t serve. Because of this driver-style personality they can sometimes be high-maintenance employees, with others in your organization constantly having to support them. So you don’t want to have too many of them.

With inside sales doing so much of the heavy lifting in these scenarios, you may be asking yourself why you even need a field salesperson at all. You need field sales to displace the competition and to make you the distributor of choice, to make the phone ring for inside sales (or digitally, to get customers to visit your website).

For more help determining the ideal ratio for your organization, or for help designing a compensation plan that will align with your sales structure and business goals, learn about our services or contact us directly by giving us a call at 321-956-8617 or emailing info@ircg.com.

About the Author

Mike Marks

Mike Marks

Mike Marks co-founded IRCG in April 1987. He began his consulting practice after working in distribution management for more than 20 years. Over the years, his narrow focus in B2B channel-driven markets has created an extensive number of deep executive relationships within virtually every business vertical in construction, industrial, OEM, agricultural, and healthcare.

Mike has led project teams that improve market access by aligning resources to growth opportunities serving manufacturers, dealers, and distributors. Clients have ranged from small privately owned firms to many of the industry’s market share leaders. Ownership structures have included owner-operators, private equity, ESOPs, and publically traded firms. Mike is proud of the teams work and the confidence clients have shown with additional project work.

He has written extensively, and is frequently quoted on many industry issues. He has substantial board experience on both public and private distribution firms. His contributions to the field include serving multiple terms as a Research Fellow with the National Association of Wholesaler-Distributors, permanent faculty at Purdue University’s University of Industrial Distribution, eight years as Graduate Adjunct Faculty in the Industrial Distribution Program at Texas A & M University, and rendering several precedent-setting expert opinions in contract disputes between manufacturers and distributors.

Prior to forming IRCG, Mike held the position of Executive Vice President at Lex Electronics, an $800 million vertically integrated electronics distributor in Stamford, CT. Mike’s path to management in his early career was through increasing responsibilities in sales and sales management. He also completed a tour of duty as a manufacturer’s representative.

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