Let’s be direct, you would never recommend that someone cut their own hair right? Why? Because it’s not what they are experts at doing, and they can’t see things from the perspective a barber or Stylist can. So what do you do? You hunt down the right person and it saves you time, money, embarrassment, and you look really good! That’s outsourcing. Why try to do something yourself that isn’t your specialty when you can find someone who can do it for you better than you could do it yourself.
As companies are looking toward Q4 and 2022, leaders are looking for different ways to create flexibility, scalability and drive overall performance. The progressive leaders are asking the question: How do evolve and thrive in this new world? Outsource sales is becoming one of the BIG answers.
Outsourcing Sales – At A Glance
Like numerous other business processes and departments, sales can be outsourced either entirely or partially. This business practice has a ton of advantages for companies, for example reducing costs. But first let’s level set on a couple of types of outsourcing sales.
There are two primary outsourced sales models. Within these two main pillars exists a variety of options but for now we can keep the 20K foot view.
1. Holistic outsourced sales model
This is a model where the outsourced provider creates and manage the entire sales process from lead gen to closure. Holistic is great for start-ups especially technology companies that have no time/budget to hire an in-house team.
2. Hybrid outsourced sales model
This is a model where a company entrusts a certain part of a sales process to an outsourced provider. There are several types of a Hybrid model:
Sales funnel is divided into 2 parts (stages), one managed in-house the other one externally. As a rule of thumb, the top of the funnel (MQL to SQL section) is the responsibility of the outsourced partner who then passes qualified leads, demos, or appointments to the internal sales team.
Outsourced lead generation is ideal for a rapid go-to-market, as well as companies with seasonal changes in sales, for example, firms that generate leads predominantly at the live events. It feeds internal teams with high-quality leads enabling them to focus entirely on selling.
Companies have both internal and external teams that operate simultaneously. They can share one market or divide territories depending on the overall targeting of the company.
This strategy is popular with companies who are growing quickly, expanding new markets, testing new products, and sales strategies. A horizontal mixed model is believed to create competition and thus motivate the internal team to do their best.
Benefits of sales outsourcing teams
1. Financial benefits of outsourced sales
Cutting costs has always been the number one reason, why companies decided to outsource. With the 2020 economic recession, this necessity becomes even more crucial.
There are several financial benefits associated with sales outsourcing:
Sales Rep’s salaries are the first thing that people talk about when discussing cutting direct costs. However, the expenses on managerial work necessary for building and running your own team are even greater.
Sales outsourcing teams reduce them by picking favorable locations with lower wages. One more way to reduce expenses is to assign several sales project to one manager. Finally, because they have large sales teams, it allows the creation of hierarchical structures with junior and senior reps and build a sales cycle that enables to manage and control work more efficiently and easily.
- Rent & office
Location gives a possibility to significantly reduce rent costs, hardware, and office support. In a world gone virtual many companies are stuck with high lease options or property costs. Offsetting this with outsourcing is a huge savings. Finding an outsourcer who is fully virtual can mean even more savings and better talent.
- Hiring & training costs
The average ramp time of a sales development rep is 3-6 months and the tenure is less than 2 years. Internally SDRs are rapidly promoted to AE positions, if they are good. This leaves internal SDR teams struggling for tenure and experience which directly impacts performance. Outsourcing Sales Dev allows for maximum tenure, experience and superior performance.
Meanwhile the average onboarding period for outsourced sales companies is 2 weeks to one month (depending on the scope of work, the complexity of product, etc.)
- Tech Stack
The providers of sales managed services have up-to-date software. They cut costs by purchasing subscriptions in bulk (for large teams) or sharing one account between multiple reps. This enables a reduction in costs for company, support expertise and that turns into a lower cost per sales person on the overall P&L. Big win for the Sales Prevention Department (accounting).
2. Flexibility & Scalability
Being extremely important, scalability is the sales’ Achilles heel. There are many ways to scale sales, but at some point, in growth to sell more you need to hire more professionals which requires time. And don’t forget Price’s Law where a small percentage of any group do 50% of the production. Sales outsourcing gives you an opportunity to scale almost immediately.
However, nowadays with the uncertainty around quarantine and epidemic waves, it is even more important to be able to “shrink” or pivot rapidly. This is next to impossible with internally hired hands. However, it’s a business as usual for outsourced sales.
Expertise comes at a price, but not in the case of managed sales services. There are several areas where you get their expertise:
- Experience with your type of product/service, market, industry, type of clients.
- Providers have the database of clients they worked with before.
- Management expertise
- Sales process: to operate more efficiently, good outsourced providers have built numerous sales processes and trained reps respectively in multiple industries and verticals.
As we mentioned above the hiring and ramping times are high in internal sales. Couple that with high early attrition and the upcoming Great Resignation and things start looking really scary. If you can’t generate sales volume at adequate velocity your entire financial model crumbles.
Sales outsourcing onboards more quickly. In case of churn, vacation, or disease, a rep is immediately replaced by his/her teammates. The working process goes on.
5. Expanding to new markets
Be it a new product, a new region, or a new ICP for your company, a good outsourced sales team can build a sales process from scratch within a short time. Since the costs are low and you can withdraw any moment, you have more opportunities for experimenting and testing a new strategy.
Outsourcing sales is an efficient way to cut costs on the selling process while retaining its quality and the expertise of reps and managers. It helps you test new strategies and market response to a new product. For more information on how Leading Edge Connections can assist your sales needs Click Here.