A good sales team plays a pivotal role in the survival of a company. With changing times and customer expectations, businesses need to update their approach to communicating with the customer to survive in the long run. Sales nowadays is not just a matter of ambition, it’s a matter of strategy and the ability to adapt with the customer’s shifting expectations without any hindrance.
But the question that has put companies in a bad situation is what to opt for. Should they invest in building an in-house team by hiring and training people according to their needs, or should they hire a sales outsourcing company with a specialized outsourced sales team, which will have experienced and efficient team members?
To understand what’s better for you and your company, in this blog, we will thoroughly evaluate both models on different parameters, like advantages, limitations, cost, etc.
What is an In-House Sales Team? Its Pros & Cons
An In-house sales team is a traditional approach to sales, where a company hires employees for the specific purpose of bringing in clients or customers for the company. Many organizations prefer this sales approach, as this allows them to have complete supervision over the team and their work. Having an In-house sales team has its own set of pros and cons; let’s discuss both to provide you with a clear picture of the same.
Pros
- Easier to manage the workflow of the team
When the team is working under the supervision of a senior employee, the company can be assured of the completion of targets and consistent work. - Deeper knowledge of the product or service
Regular interaction with the product or service makes the employees more familiar with the business, which in turn helps them to sell it better. - Immediate cooperation within departments
Due to the proximity within the internal teams, cross-department collaboration and co-operation become easier. - Higher chances of cultivating leaders for the future
Long-term employees may evolve into managers or strategists, or even department heads, with time and experience.
Cons
- Hiring and training of the employees takes time and a huge capital
The capital utilised in hiring and training salespeople is huge, with almost every employee having a ramp-up period of at least 2-3 months, during which the productivity is pretty low - Poor performance
Not every hire is a good hire, not all of them perform consistently, there are always some weak links among the teams, which at first glance may seem harmless but are loss-making in the long period of time. - Harder to maintain 24-hour coverage
Modern customers expect always-on responses from companies these days, and with employees working on fixed schedules, it’s not possible to provide so. - Limited flexibility and scalability
When hiring employees, you have to follow a set of unwritten rules, and you cannot contract or expand the team, as per the organization’s needs.
Although some benefits make the in-house team approach seem more lucrative, the limitations that come with it overshadow them.
What are Outsourced Sales Teams? Its Pros & Cons
An outsourced sales team is a team of sales experts and specialists hired on a contractual basis by a company through a sales outsourcing company. These specialists are responsible for every sales-related operation that is needed to obtain optimum results. Business owners prefer to outsource sales reps teams, as these teams are not only filled with highly qualified experts but also don’t need regular supervision. But even outsourced sales teams have their set of pros and cons, so let’s understand them.
Pros
- Easy access to experts
With an outsourced sales team, your company gets immediate access to a highly skilled salesperson, who will not only help you more about sales but also give you the desired results. - High Scalability, Zero Burdens
Once you have hired an outsourced team, all you need to do is provide them with your plans and demands, and the rest of the process will be handled by them within your requested deadline. - Cost efficient
The most prominent reason for outsourcing a sales team is its cost efficiency. According to a study by Sellout, companies can save up to 40% by outsourcing a sales team. - Lower Risk, Higher Accountability
Outsourcing is a result-driven method, where any delay or missed target can cause a loss of contract to the providers, which makes them cautious and diligent towards your demands.
Cons
- Lack of Control
An outsourced sales team would not be under your supervision, even if weekly or monthly reports are provided. Because at the end of the day, you will only be able to know the results and not how they were yielded - Long Onboarding Period
Although a one-time thing, an outsourced sales team takes time to be fully familiar with your product before they start to design a sales strategy for your company.
Cost Comparison: In-house vs Outsourced
In business, most of the decisions are based on one factor only, i.e., cost. The same goes for a sales team, so we will break down the cost structure of both options we have.
In-house Cost Structure
The number of expenses when building an in-house sales team is a lot, but to bring out an average amount, we will discuss only the prominent and essential ones. Below is a list of primary and hidden expenses that come with an In-house sales team.
- Recruitment Cost
- Training Period Expenditure
- Tools & Software Subscriptions
- Equipment & Infrastructure Costs
- Salaries & Yearly Bonuses
- Turnover aligned losses
- Sales Incentives
- Cultural Expenses
Although when accounted individually, they seem less expensive, and when accumulated altogether, the costs may reach up to 200k to 300k USD.
Outsourced Cost Structure
From a company owner’s perspective, the cost structure of an outsourced sales team is easier. Because there are no hidden costs behind the scenes, and you will know what you are paying for, as the contractual fee is discussed before the handover of the project.
Companies opting for an outsourced sales team have the option to select the sales outsourcing services they need, which on average cost between 70k to 100k USD. Although the price can vary with your needs, the relative cost difference between the two approaches remains the same when compared.
Conclusion
As a company, if you prioritise supervision over capital or have enough resources to sustain an in-house sales team, then you can build your own sales team from scratch. Whereas, if you prefer to lessen your financial and managerial burden while growing your sales and revenue, then you should prefer outsourcing sales team that will work for you around the clock, without the need for regular intervention. The choice depends upon your business goal and what they prefer to move with.
