Sales outsourcing can be a good way for businesses to increase lead generation and sales without investing in recruiting and the cost associated with full-time sales reps. There are important things to consider before outsourcing any part of your sales, including familiarity with the product/service, your business model, and your company’s views on cold calling.
Sales outsourcing — outsourcing in general — isn’t new. However, many companies are still very cautious and reluctant when it comes to trusting a core business activity like generating new business to a third party.
1. Your Business Model Won’t Work
This is the major reason you shouldn’t outsource sales development. If you are B2C, B2B2C, or B2C2B, it’s highly likely your business model simply won’t fit an outbound model. Much of this comes down to your product pricing. It’s unlikely an Average Contract Value lower than £1,500 will be able to pay for outsourcing sales development.
Other indicators of a poor match are short sales cycles. Essentially, where the individual buyer is less important than simply reaching lots of people, as outbound prospecting isn’t the most efficient method to attract broad swaths of new clients. In these cases, businesses are wise to invest more in marketing, advertising, and freemium product strategies.
2. You think sales outsourcing is too expensive
This is the most popular objection we hear over the phone. Fees for outsourcing agencies are often close to the salaries for a single internal lead generator.
Companies that have never used these kinds of services believe it will cost them a fortune, and that an in-house team will be less expensive with greater control.
Costs comparison
The reality is quite the opposite. According to most surveys, cost savings is the primary reason for outsourcing. Interesting data from leading job sites like Glassdoor, Indeed, and AngelList suggest the average lead generation or Sales Development Representative (SDR) base salary ranges from £22k to 26K.
These costs don’t usually include in software, hardware, or other typical overhead — often 25% of salary. And the least factored part of in-sourcing is the allocation of management time, money, and resources. Figures, all-inclusive of these hidden costs, can easily run into the six figures.
It gets worse. In 2018, the SDR position largely serves as a short-term launchpad of a sales career (or brief foray into the land of rejection in a job many cannot handle).
The average recruit arrives with less than 12 months experience and an average tenure of under 15 months. It’s rare to find businesses allocating human resources costs for the endless treadmill of hire, train, and retain required for insourcing.
In other words, companies spend 26% of their time on training, which takes a manager’s time and efforts resulting in positive productivity for less than a year.
Here’s one more thing to think about, when you consider sales outsourcing. Along with cutting costs, companies usually try to estimate qualitative ROI using the following criteria:
- Freeing the time of your in-house employees (usually sales account execs)
- Improvement of analysis and planning (consistent opportunity creation)
- Acquisition of knowledge and experience
- Strategic value (building pipeline)
- Innovation
Employees with less than a year of experience shouldn’t be expected to bring innovation and strategy to your company. Their first year on the job focuses on learning.
Insourcing comes with a multitude of costs, most of them hidden. Outsourcing, on the other hand, might appear expensive, but costs will always be obvious. Be sure to run a thorough either/or analysis before concluding which is truly most expensive.
3. You think cold calling is dead
There are a lot of arguments that cold calling and emailing are dead. Without a doubt, an ever-increasing challenge of targeting leads than ever before. Especially as pointed out by those promoting social selling or similar agendas.
Part of this is based on the belief that cold outreach is an unpleasant, unsavoury, and unproductive use of time.
Direct engagement is stronger than ever
The cold reality of cold outreach is it’s the only way to guarantee direct targeting must-win brands that matter to your business. It’s one of the reasons Account-Based Marketing and Account-Based Sales are such trending topics over the last few years:
Account-Based Marketing and Sales are a broad market response towards the ever-greater and more sophisticated use of outbound tactics.
Each of the 20 fastest growing B2B SaaS companies has implemented outbound outreach. Each B2B company to issue an IPO in 2017 has embraced outbound. This is a successful, productive go-to-market strategy practised by the fastest-growing companies in the world.
According to a study on the most popular sales myths by the RAIN Group, the earlier your outreach occurs in the purchase process, the better. And by earlier, this often means before buyers even understand what they really need.
4. You think you won’t have control over an outsourced sales development team
Understandably, when it comes to sales, control is a top reason for not outsourcing. Lead generators are people who contact your potential clients directly. You don’t want them to present your brand in a positive light.
Furthermore, you want to be sure that they don’t waste their time and avoid cold calling, as some might make the case this is the most unpleasant part of any salesperson’s job.
How much control do you really have?
Having a sales rep who’s constantly out of sight looks like a total loss of control. This is partially true. But only if you think of control as 100% supervision over every action your staff makes with your oversight, which isn’t an effective option in a distributed world.
We believe an effective SDR should be a self-manageable entity, capable of doing at least 90% of the work on their own (if not more). As it stands, the work itself is pretty much a solo endeavour.
There’s an argument to be made that teamwork matters too. And doing rejection-filled work all day, every day requires moral support only peers can give. At Virtual Sales Team, our callers work side-by-side and provide the type of moral support that simply isn’t possible in small or divisional organisations.
Having a dedicated team, such as pairing lead generators with Sales Researchers, working across blocks of other teams, plus Customer Success, QA, and management oversight are nice checks and balances to any fears of control loss.
Not to be overlooked are shared goals. Any outsourced sales agency worth its salt only succeeds when clients succeed.
As such, monitoring of minutes, activities performed, and advanced analytic charting of progress should always be part of the equation. We know that properly organised communication and reporting are the best way to supervise and manage sales reps:
Setting points and criteria for monitoring of lead generators in an outsourced model will often deliver greater visibility than even in-house methods.
And guaranteeing something insourcing will not — enabling your sales team to spend more time on more valuable tasks than research and prospecting, such as analysis, planning, account management, and closing deals.
5. You don’t want feedback from your market / You don’t know how your product stands out
Alarmingly, we’ve met many companies with this opinion. They didn’t understand the value of their product and how they are different from the competition – and they often didn’t see any value in further investigation. In a purely inbound model, these blind spots aren’t always glaringly obvious. Marketers rarely have to deal with objections.
And that’s the reason why such businesses don’t match a sales outsourcing model.
The value of your product/service becomes a focal point of conversations SDR’s start with prospects. This requires researching a lead’s business first to see how an offer can fit and help.
Good lead generators will always do their homework first, to understand why any prospect will even care. Then they’ll keep the conversation going by bringing relevance to bear to any appointments they set.
Market learnings are some of the most valuable things a sales outsourcing team can bring you. Hence every response is reported, and you’ll get to know what your potential buyers think about your product, your competitors, and their own needs — some of which you may not like or want to hear.
Think of the beneficial perspective on how your business and your product looks from a potential customer’s point of view — but only if you’re prepared for the unvarnished truth.
Summary
It’s easy to take a casual view of sales development outsourcing as something that doesn’t fit your business. It’s rather easy to dismiss the merits of an outsourced approach without digging in – after all, the status quo is usually the safest place.
However, challenging assumptions on reasons not to outsource sales development may make you think differently about your business and, perhaps, even make you a candidate to grow through outsourcing.
