Jan. 2 (Bloomberg) -- Patricia Sims spent most of the last 20 years selling on the road, pitching products for software companies. Two years ago she traded frequent flier perks for a job that relies on Internet meetings and social media.
“When I started in sales, anyone who did inside sales was thought of more as a telemarketer, someone who would call on consumers and bother people eating dinner,” said Sims, 51, who now works in Charlotte, North Carolina, for ON24 Inc., selling services such as webcasting to businesses. “As time and technology progressed, it’s just made sense to do that big presentation virtually.”
From itinerant Yankee peddlers crisscrossing the U.S. after the Civil War, to Dale Carnegie’s bestselling books on the art of salesmanship, American capitalism has often been driven by new advances in the plying of wares. Arthur Miller’s 1949 Pulitzer Prize-winning play, “Death of a Salesman,” placed the occupation at the heart of the American middle class and its longing for social mobility.
“By the mid-20th century the salesman is really the center of what the country is all about and becomes sort of the archetypal American,” said Walter Friedman, author of the book “Birth of a Salesman: The Transformation of Selling in America” and director of the Business History Initiative at Harvard Business School in Boston, Massachusetts. “Selling became so mainstream that it sort of defined the possibilities of what this country was all about.”
Now, companies from software and health-care providers to manufacturers are trying to fill inside sales positions, shifting from expensive field staff to more affordable employees who use phones, Internet and social media tools to reach business customers. By some estimates, keeping sales people off the road is 10 times cheaper and growing 10 times faster than meeting in person.
“There’s a huge challenge,” in hiring employees for these growing jobs, said Larry Reeves, who helped form the American Association of Inside Sales Professionals three years ago to coordinate training and establish a formal accreditation.
A survey the association conducted last year as part of a conference of companies that are using inside sales, including International Business Machines Corp., Hewlett-Packard Co. and Cisco Systems Inc., said staffing is among the biggest challenges for the industry.
With virtual meeting software like GoToMeeting.com and WebEx, communication tools such as Skype and social media sites Twitter, Facebook and LinkedIn, it’s become easier to sell with few, if any, face-to-face meetings, said Ken Krogue, co-founder of Insidesales.com.
“It’s been accelerating and the definition is changing,” Krogue said. His Provo, Utah, based company provides technology for inside sales departments at companies such as AT&T Inc., Cisco and Dell Inc. Younger workers entering the workforce, who are more comfortable with the technology, also are supporting the trend, he said.
The U.S. will add about 1.9 million new sales and related positions by 2020, including at the retail level, the Bureau of Labor Statistics said in its outlook on job growth, released in March. While the study doesn’t differentiate between inside and outside sales, wholesale and manufacturing will require about 223,400 representatives alone, the report said.
“It’s absolutely shifting,” said Steve Richard, co-founder of Vorsight, a sales training company based in Arlington, Virginia, whose customers include Verizon Communications Inc. and Rosetta Stone Inc. For every one person hired today for an outside sales role, Richard said his data shows there are 10 being brought on for inside sales.
Industry estimates show each contact with an inside sales person might cost $25 to $30 compared with $300 to $500 for a field staff person because of the travel expenses, said Michael Moorman, a managing principal in the Chicago office of ZS Associates, which assists with sales force staffing.
Cutbacks during the 18-month recession that ended in June 2009, helped galvanize a movement already being enabled by high-speed Internet connections and Web-based tools, said Anneke Seley, 54, founder of an inside sales company now called Reality Works Group. She changed the name of the company from Phone Works last year to reflect the diminished role of the telephone as the Internet is more central.
She started her first such group for a major software company in 1985, before the Internet was widely used, to sell programs for then newly emerging personal computers. That department initially only identified customers and didn’t close deals. Eventually, hundreds of millions of sales were done without the field staff, she said. Now many companies no longer bother with outside sales, Seley said.
That’s the route pursued at Act-On Software Inc., said Shawn Naggiar, the chief revenue officer at the online marketing company based in Beaverton, Oregon.
“It is sometimes difficult to find the person with the right skills set,” said Naggiar, who runs a 44-person department selling marketing systems to small and medium businesses. Employees need to understand business and also be comfortable with technology, he said.
The salesman has been evolving with technology for more than a century, says Harvard’s Friedman. Vending machines were thought to eliminate the need for counter clerks and advertising was predicted to mean people would get their information from commercials, not people, he said.
“There’s always this idea that sales people are going to disappear,” he said. “The industry shifts continuously.”
Increasingly, the inside sales staff isn’t even at the office. About 46 percent of such employees are at the company headquarters, with about 37 percent working both at the office and at home and 17 percent working fully at home, according to data compiled by The Bridge Group Inc., a consulting company in Hudson, Massachusetts.
The employees have an average base salary of $53,000 and total compensation of $98,000, according to Bridge data.
Technology was one reason Sarah McMahan said she was easily able to switch to inside sales two years ago after six years of field sales at Corporate Visions Inc., which works with companies such as Dell, Hewlett-Packard and General Electric Co. to improve sales results.
McMahan, 40, said she returned to work after the birth of her third child two years ago and was offered a job to help develop more sales leads, replacing frequent trips to the East Coast from the office in Incline Village, Nevada, near Lake Tahoe, with virtual meetings via Web technology and phone.
“I can pick up my kids at the end of the day and then log on later to check on pending appointments,” she said.
Sims also said her transition to inside sales has been a welcome change. Internet technology, such as the products sold by San Francisco-based On24, makes demonstrations more predictable, and not traveling so much also helps with her personal life.
“It’s easier to eat healthier and work out and get home at a reasonable hour,” she said. “And there less hassle with things like dry cleaning, uncomfortable shoes and driving miles just to shake someone’s hand.”
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