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In the current business climate, more and more companies are considering outsourcing certain sales tasks. There are many benefits of outsourcing sales, such as cost savings, increased efficiency, and gaining access to a larger pool of talent. However, there are also some risks to consider before making the decision to outsource sales. This article will explore 5 reasons to consider sales outsourcing (or not).
What is Sales Outsourcing?
Simply put, sales outsourcing is the contracting of a company’s sales operations to an external service provider instead of having an internal team do the job. The service provider assumes responsibility for managing and executing all or part of the company’s sales activities, from lead generation to closing deals. Sales outsourcing can be used to supplement an existing sales force or to replace it entirely.
5 Reasons to Consider Sales Outsourcing
For businesses of all sizes, the decision to outsource sales can be a difficult one. There are many factors to consider, and it’s important to weigh the pros and cons before making a decision. Not going to deny, however, that there are some definite advantages to outsourcing sales. Here are five reasons to consider sales outsourcing for your business:
1. Internal SaaS Sales Teams Have a High Churn Rate
Internal SaaS sales teams have a high churn rate for a number of reasons. First, the sales process is often times complex and requires a high level of understanding of the product which makes it difficult for sales teams to grasp, especially if they are not familiar with the product. Also, the sales process can be lengthy. This eventually leads to boredom and attrition. Not forgetting to mention that the pay structure for internal sales teams is often times commission-based, which can be a significant source of stress for employees.
Outsourcing sales operations can help to mitigate these issues by providing a team of experts that are familiar with the product and the sales process and relieving the company of such responsibilities. In addition, outsourcing can provide a more stable pay structure for sales teams, which can help to reduce stress levels and churn rates.
2. Sales Outsourcing Reduces Costs
There are a number of reasons why sales outsourcing can be a cost-effective solution for businesses:
- Businesses can save on the costs associated with hiring and training sales staff. When businesses outsource sales operations, they can avoid the costs of advertising and interviewing candidates, as well as the costs of training new hires. In addition,
- Businesses can benefit from the increased flexibility and scalability that outsourcing provides. Outsourcing sales operations allows businesses to scale their sales efforts up or down as needed, without having to make a long-term commitment to a specific number of sales staff.
- Businesses can save on the costs of maintaining a sales office. When businesses outsource sales operations, they can avoid the costs of rent, utilities, and other overhead expenses.
3. Step into New Markets Quicker
Sales outsourcing helps companies step into new markets quicker by allowing them to focus on their core strengths and outsource the sales process to experts. This allows companies to quickly enter new markets without having to invest in the infrastructure and resources required to build a sales team from scratch. Additionally, sales outsourcing provides companies with access to a larger pool of potential customers and a more efficient way to reach them.
4. Increased Scalability and Flexibility
Sales outsourcing helps companies increase scalability and flexibility by providing a flexible workforce that can be adjusted to meet changing demands. By outsourcing their sales processes, companies can gain access to new markets and customer segments, as well as to a more flexible and responsive workforce. This can help them to boost sales and to better meet the needs of their customers.
5. Lack of Resources
If a company lacks the resources to support an in-house sales team, it is a valid reason to outsource sales. This includes not having enough money to hire and train salespeople, or to support them with marketing and administrative staff. Additionally, a company may not have the product knowledge or industry expertise to support a sales team. In these cases, outsourcing sales can be a cost-effective way to generate revenue.
When NOT to Outsource a Sales Function
Now that we’ve gone through when it is best for your business to outsource its sales operations. Let’s explore when you should reconsider the decision and stick to an in-house sales team.
1. Your business model won’t work
If your business model is not viable, then it is unlikely that outsourcing your sales function will make it more viable. In fact, it is likely that outsourcing your sales function will simply add another layer of complexity and cost to your business, which is the last thing you need if your business model is not working.
2. You think sales outsourcing is too expensive
Sales outsourcing can be expensive, and if you’re not careful, it can eat into your profits. However, if you do your homework and find a reputable, experienced sales outsourcing company, it can be a cost-effective way to grow your business. Just be sure to get proposals from several companies and compare their fees carefully before making a decision.
Here are some tips on how to keep your costs down while still getting the best possible results.
- Avoid agencies that charge high fees. There are plenty of great sales outsourcing agencies out there that don’t charge an arm and a leg. Avoid agencies that charge high fees, and instead, focus on finding one that charges reasonable rates.
- Don’t pay for results you can’t measure. When you’re outsourcing sales, make sure you’re only paying for results that you can actually measure. Otherwise, you could be wasting your money.
- Get quotes from multiple agencies. Don’t just go with the first sales outsourcing agency you come across. Get quotes from multiple agencies so you can compare prices and services.
- Make sure you’re clear about what you want. The more specific you are about what you want from a sales outsourcing agency, the easier it will be to find one that can meet your needs.
3. You believe cold calling is dead (or it isn’t adapted to your target audience)
There’s no doubt that cold calling is significantly less effective than it once was. In response, companies have been outsourcing their sales functions to save on costs. However, this may not be the best strategy in the long run.
Outsourcing your sales function can be a good way to save on costs in the short term. However, it can also lead to a loss of control over your sales process. Additionally, it can be difficult to find good quality salespeople who are willing to work on a commission-only basis.
In the end, it’s up to each company to decide whether or not outsourcing their sales function is the right decision. If you do outsource, be sure to carefully vet the salespeople you’re working with to ensure they’re a good fit for your business.
“I don’t think cold calling is dead, but I do think it isn’t adapted to my target audience. I’m in the business-to-business software space, and my target customers are usually mid to large-sized businesses. They’re not going to respond well to a cold call from someone they don’t know.”
So, if you’re in a similar situation, I would recommend avoiding outsourcing your sales function. Instead, focus on other marketing channels that will be more effective in reaching your target customers.
4. You think you won’t have control over an outsourced sales development team
Outsourcing your sales function can be a great way to save time and money, but only if you’re confident that you’ll be able to maintain control over the team. If you’re not sure you can do that, it’s best to keep the function in-house.
There are a few reasons why this could be the case:
- You won’t be able to hold the team accountable for results.
- You won’t be able to manage or monitor their activity levels.
- You won’t be able to provide adequate training and support.
5. You don’t want feedback from your market / You don’t know how your product stands out
By outsourcing your sales function, you are essentially giving up control of how your product is being marketed and sold. This can lead to problems if the company you outsource to does not have your best interests in mind. Additionally, if something goes wrong with the sale, you may not be able to get the feedback you need to improve your product or fix the problem.
It’s important, as well, to have a good understanding of your product and your market before outsourcing your sales function. Otherwise, you could end up with a sales team that doesn’t understand your product or market, and that could lead to problems down the road.
Things to keep in mind when considering sales outsourcing:
- Make sure you have a clear understanding of your sales goals. What are you trying to achieve by outsourcing your sales function? If you’re not clear on this, you won’t be able to properly evaluate whether or not the outsourcing company is meeting your needs.
- Do your research. Not all sales outsourcing companies are created equal. Make sure you take the time to read reviews, talk to other businesses that have used the company’s services, and get a feel for their process.
- Make sure you have a good working relationship with the company. This is important for any business relationship, but it’s especially important when you’re outsourcing something as critical as your sales function. You need to be able to trust the company to meet your needs and exceed your expectations.
- Be prepared to pay a premium. Sales outsourcing can be expensive, but it’s important to remember that you’re paying for results.
Summary
There are a few key things to consider when making the decision to outsource your company’s sales function. The first is whether or not you have the internal resources to support a sales team. If you don’t have the time or money to invest in training and developing a sales team, then it may make sense to outsource this function.
Another key consideration is your company’s core competencies. If selling is not one of your company’s core strengths, then it may be wise to outsource this function. This way, you can focus on what you do best and leave the selling to someone who is better equipped to do it.
Finally, you need to consider the cost of outsourcing versus the cost of maintaining an internal sales team. If outsourcing is more expensive, then it may not be the best option for your company. However, if it is less expensive and will free up your time to focus on other areas of the business, then it may be worth considering.
Conclusion
In this article, we discuss the pros and cons of outsourcing your sales function. We explain the importance of doing your research before making a decision and remind readers that you will likely have to pay a premium for good sales results. You’ll find here the best team for your company.
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