Businesses have their eyes set on driving revenue and scaling. While there are many different ways to go about doing this, one of the effective ways to do this is to outsource some or all of your sales process. By outsourcing, you’ll work with sales experts, and have access to the best in class technologies which can help drive your business forward. Though, it takes effort to make it work for you.
Read on to know what sales outsourcing is, why you should do it, the do’s and don'ts, and many more.
What is Sales Outsourcing?
Sales outsourcing is when you delegate a part of your sales process to a third party. This is done when the internal sales team doesn’t have the time, resources or expertise to take care of the whole sales process. Outsourcing helps businesses to be flexible while also allowing them the bandwidth to focus on more complex tasks at hand.
Lead generation, managing the inbound and outbound calls, are some of the activities that the outbound sales team will do.
Why Outsource Sales?
Outsourcing sales may not be the ideal thing to do for every business. The trick is to know when to outsource and when you want to hand it over to the internal team. Below are some of the reasons why businesses choose to outsource:
Sometimes, hiring a third party may cost less than the cost of hiring employees and the other costs that come with it, like the health insurance, office space, commissions, etc.
Lack of expertise:
Your internal team may lack the expertise and experience to handle certain sales functions. In this case, outsource those functions to someone who can get the job done for you.
When your team is small:
When your team isn’t big enough to handle the high volume of leads that are generated, then it’s better to outsource so that the leads generated don’t go to waste.
If you’re looking to scale or enter into a new territory, the hurdles that come with it can be different from what you’ve faced. Adding to it, your team may not be well-equipped to handle it as well. By outsourcing sales to an expert, you have better chances of earning new customers for your business.
Handing over the repetitive busywork to outsourced teams can free up your internal team, and they focus on more important tasks at hand.
When Does it Make Sense to Outsource Sales?
Have a complete view of your entire sales function and see which of it you want to outsource, and the ones you want to keep within the organization itself. Also, if you don’t get a buy-in from your other sales functions, do not go ahead outsourcing sales. It may lead to a situation where emails are not followed by calls, and there’s no technical workshop followed by a demo, which only spoils your reputation.
How Much Does Outsourcing Sales Cost?
At first, an outsourced sales team may look expensive. But comparing the overall expense of setting up an internal team, it'd cost less.
When you set up an in-house team, the additional costs include:
* Training and on-boarding costs
* Insurance benefits
* Commissions and bonuses
* Management personnel
* Office space and services
The average base salary of sales reps including the benefits is around $60,000, and for a sales management personnel, it is $120,000. So this is how your total cost of an in-house team would look like:
$60,000 * No. of Sales reps + $120,000 + Commissions +Bonuses + Tools
When you outsource, it’s possible to have a smaller team and adjust it as and when needed. In general, an outsourced salesperson would charge between $1000 to $5000 per project. And if you want to make them a permanent part of your sales team, the costs can vary considering how big your company is.
Businesses That Benefit From an Outsourced Sales Team
Startups with budget constraints
When you’re a startup, there are high chances of you running your business with minimal budget. With this, investing in a quality sales team can be a difficult task. Instead, if you hire an outsourced sales team, they can help you reach your sales goals quickly, and in an effective way, considering that it’ll be a team of experienced sales people. In this way, you can also enter new markets quickly. Further, invest in an in-house sales team after you’ve the budget to hire the right people.
Businesses with complex products
Prospects now spend a lot more time researching about your product, and compare with your competitors. As a result, the sales process has become lengthy, with many people getting involved in decision making. Prospects require a lot more nurturing to make them move through the sales funnel, and this can be challenging if you’ve a small in-house team. It only gets even more difficult if you don’t have the tool to handle a sizable number of leads. Meanwhile, an outsourced sales team would’ve the required tools & experience to handle the leads, and ensure that they aren’t lost.
Businesses looking to enter new market
Entering into a new market and establishing a presence there can cost a lot of time and effort for your in-house sales team. Involve someone who already is familiar with the market you’re entering, so that you can speed up your sales process and not waste time in getting used to the new territory. Their expertise, connections, and the established relationships can benefit your business. You don’t have to waste your resources in ways that aren’t efficient.
When NOT to outsource Sales Functions
Sometimes, companies have products that look good, along with glossy sales materials, all these without a proper product/market fit. In this case, no matter what a business try, you cannot sell the product as the customers are more focused on solving their other major problems. Here the businesses are left with no choice but to take an entirely different approach. And if you’re an outsourced sales team, ensure that your partner has complete clarity on what they sell, and what their reporting and KPI structure looks like.
The Do’s and Don’ts of Sales Outsourcing
1. Place More Emphasis On Capabilities of Sales Team
You consider a lot of factors when it comes to hiring an outsourced sales team, and cost is just one of them. You cannot place more emphasis on it, and if you do you, you may miss hiring the experienced folks who actually can get the job done for you.
Here are the factors which you must take into consideration:
* Define what you expect from your outsourced partner in terms of result
* Ensure that your partner has the capability to help your company grow
* Get to know what their areas of expertise are. (Consumer sales, B2B sales, etc)
* The depth of knowledge they have in your vertical of business
* What their proven track record is, and the kind of enterprise, mid-market, or SMB companies they’ve worked with.
* When you want to enter into a new market, what would be the contribution from the outsourced team?
* What tools does the team use to accelerate sales.
* The kind of return you can expect from the investment.
When you reach out to a third party, have absolute clarity on what your needs are as a business, and why you want the help of an outsourced sales team.
2. Play An Active Role In The Partnership
You cannot expect the sales process to go smoothly once you’ve hired an outsourced team and completed the onboarding process. You’ve to be completely involved in the partnership throughout. Ensure that you actively communicate with your partner, and invest the necessary time to make it worthwhile.
To maximize the engagement with your partner:
* Have regular meetings with your outsourced sales team and stay-connected with them through weekly touch-base meetings to discuss the gap in performance, and other key initiatives.
* Ensure that they’re involved in your internal meetings as well, where you discuss forecasting, strategy etc.
* Set clear goals to your outsourced sales team. They should be aligned with it and both the parties should know what success looks like.
3. Ensure Sales and Marketing are Aligned
When you hire an outsourced team, it can get difficult to make them aligned with the overall marketing process. It’s important that this doesn’t happen, as both the team have to be in alignment to achieve your overall business objective. They mus always work together, so that they can be of help to each other in reaching their individual metrics.
To ensure Sales and Marketing are Aligned:
* Your marketing team should regularly interact with the sales team. The insights from the sales team can be very much valuable to your business.
* Develop buyer personas so that both the teams have their eyes set on the same set of audience. Ensure that both the team have the right understanding of whom your targets are.
* Make your sales team share their data to the marketing team, which can further help marketing improve their process during lead generation/qualification.
4. Don’t Get Lost In The Selection Process
There’s no doubt that you’d want to partner with the best in the business. But dragging the selection process would only cost you time and money. You’d miss the opportunity to reach your revenue goals as well.
Consider the below questions while selecting an outsourced sales team:
* Do you and the partner align on the KPIs? What are the evaluabtion tools and metrics they consider to measure results?
* Do they really offer innovative solutions to reach your sales goals or just answer to what you had asked for?
* What will be the ratio of sales reps to managers?
5. Have Patience with Results
When you hire an internal salesperson, you give them the time to learn before expecting the results from them. Similarly, the outsourced sales team would also need time to learn as well. In general, it takes around 90 days for them to get to know about your value proposition, business strategy, and to deliver results.
For a seamless onboarding of your sales team:
* Create an open communication channel so that your outsourced team can contact you whenever they need to.
* Give your reps the necessary training and provide them the materials on your products and services.
* Have a variable compensation model in place which rewards the reps based on their performance. In this way, they’d be driven to deliver the results as well.
6. Don’t Choose a Basic Call Center
You’ll come across some call centers that impersonate outsourced sales teams, but there’s a difference between both. Call centers generally provide customer care and support, while sales teams drive revenue.
Here’s what you should expect from your outsourced sales team:
* Sales team that are carrying quota
* Cover new geographies and areas that you you didn’t have access to
* Helps better your current sales process
* They do forecasting and analysis adding to just reporting
* Set process that drives predictability.
Outsourcing sales can give you a competitive edge in expanding your revenue and while entering into a new market in an effective way. You’d have better access to the right talent, technology and tools, while setting up an in-house team can come with its own constraints. Follow the above mentioned do’s and don’ts to make the most of outsourcing your sales process, and make the partnership a long-lasting and successful one.