When it comes to business outsourcing, I have been on both sides of the table. I have, since 2009, hired 20+ outsourced resources from all over the world for tasks such as data research, web design, translations, voiceover talent and more. I have learned quite a bit about it.
I also run a Consulting company, AltiSales, which has a Business Process Outsourcing component, think Accenture, but purely for SDRs. That means that some of our clients are outsourcing to us. Therefore, I can analyze this topic from both perspectives and share some learnings.
To clarify, the dictionary defines outsourcing as “obtaining (goods or services) from an outside or foreign supplier, especially in place of an internal source.” So let me start by setting the stage.
Outsourcing in your personal life
All of us, consciously or subconsciously are constantly “outsourcing” in our private lives.
For example, most of us plan to forever Outsource certain things. Ask yourself:
- Do you fix your clogged sink or do you outsource to a plumber?
- Do you change your car oil, or do you outsource to a car shop?
- Do you diagnose your illnesses or do you outsource to a doctor?
Here are things that we outsource sometimes:
- Do you cut your own grass, or do you hire a gardener?
- Do you drive, or do you take a Taxi / Lyft / Uber?
- Do you clean your house, or hire a home cleaning service?
- Do you cook, or do you eat out?
How Is Business Outsourcing Different?
Before we dive into the topic, I have an important question for you.
Have you ever been to a restaurant where the dining experience was just terrible, and you promised yourself never to be back?
We all have.
Now, imagine that instead of saying “I’m never coming to this restaurant again” you were to say “I’m never dining out again”… woooow. Extreme, right?
Yet that’s what most people do after they try an outsourcing solution in the business world and fail. Why? Let me add more color with a dining experience example.
What NY Strips can teach us about outsourcing
Imagine you are feeling like eating steak today, and you know that 3 restaurants down the road have NY Strips for $32, $37 and $42… you also know that the supermarket sells frozen NY Strips for $12.
Suddenly, someone approaches you tells you they can serve you a NY Strip for $4.50, and another person offers it for $4.35. They claim it’s as good as any of the premium steakhouses. What would your reaction be? Deal or no deal?
I hope you’re not taking that deal. The NY Strip cut costs $12 at the supermarket… how will they buy it, cook it, serve you and clean after you, all for $4.50 and stay in business?
If you were naive enough to take the deal, you’ll soon realize that they’re actually serving you dog meat, the portion is 1/5th of the other steaks, it comes in a paper plate, and there’s no silverware to eat it with.
You’re also getting food poisoning. No wonder you never want to eat out again…
The Sales Development outsourcing industry is broken for that exact reason. Most companies are competing on price, and when you hear about the $4.50 and $4.35 steaks, most people discard the idea of going for the $32 option.
So, how do we fix this, and more importantly, if so many companies are serving dog meat and calling it NY Strips, how do I know I’m not paying $32 for the dog meat?
How to think about Lead Generation / SDR Outsourcing
In an industry of extreme cost-cutting, constant over-promising and under-delivering, the only way to find good providers is to question the business operations in depth and demand extreme transparency. You need to make sure that the way they are running their business is the way you would run it as well. In other words, figure out where they source their meat, how they prepare it, and demand to see it all, do not fall victim of the “happy ears” syndrome.
You also need to understand that this company needs to make a profit, and beyond the cost of the service, they have a cost of selling the service to you. You have introduced a middle man.
So why wouldn’t you just do it in house?
There are three reasons: Cost to start, time to start, and expertise.
Similar to going to a restaurant, where you can get an incredible well-prepared peppercorn NY Strip with a Ceasar salad and mashed potatoes in a matter of 20 minutes, building your own SDR team, including tools, training, workflows, messaging, metrics, and management can take 6-18 months and cost you ~$15,000 per month for just 1 SDR and data. And you’re no SDR chef, are you?
Your cost of trying to build Sales Development in house is, therefore, $90,000 at a minimum. Most likely with 2 SDRs, a manager, and some consulting, you’re investing $200,000 for an experiment.
As you can imagine, delaying your dinner by a few hours to cook your own steak is no problem, but delaying the building of your SDR team by 6 months can kill your company. A lot more is at stake here (pun intended).
How to evaluate your Lead Generation Provider
Here are some of the key aspects you need to look into. This is the equivalent of kitchen cleanliness and ingredient sourcing. None of these aspects will guarantee you that the dining experience will be amazing, but the lack of good answers to the below questions put your success at high risk. Rats in the kitchen don’t always mean the food is bad, but I wouldn’t risk it.
Dedicated SDRs: First of all, never use a firm that has an SDR work on multiple products/companies at the same time. It’s almost impossible to become good at selling something if you sell multiple products to multiple markets and talk to multiple personas that have different priorities. SDRs will either be constantly confused and overwhelmed, or they will require strict scripts, which means that they will sound scripted. This is dog meat.
To verify, ask: “Is my SDR dedicated to only my account? If so, can I call my SDR anytime during the day and speak directly with them?”
High-Quality SDRs: Make sure that whoever is assigned to your account is actually capable of doing the work, and doing it well. You should ask in advance about the expertise of the SDR, and their compensation structure. Most companies will tell you that their SDRs have many years of experience, but experience doesn’t matter as much as expertise. A great SDR, most likely isn’t working for $10/hr. This is also somewhat reflected on how much you’re paying for this firm? $4.50 NY Strips… be skeptical.
To verify, ask: “Before we get started, will I be able to have a quick video-chat with the SDR assigned to my account? I want to know who’s joining my company”
Be Careful with Bait & Switch “Trials”: Too many companies will offer a trial and give you their best SDR for 2-3 months. As soon as you sign a long-term contract, they switch you to an entry-level SDR.
To verify demand: “I want the agreement to specify that whichever SDR we use during the trial, will continue to work with us if we sign a long term contract”
Ensure Quality Conversations: Results matter, and activity matters, but you also want to make sure your company is properly represented in conversations and that you can ask the company to adapt how pushy they are with messaging.
To verify ask: “I need to have control over the quality of conversations. Can we make sure all calls are recorded where legally allowed, and have access to those recordings anytime?”
Ensure Quality Training: When you spot any mistakes in messaging, objection handling, or how to react to competitors, there should be someone training the SDR, and the training should be good.
To verify, ask: “Can we either get recordings or, at a minimum, email summaries of all the trainings that my dedicated SDRs participate in?”
Avoid Spammy Practices: Make sure that the company you use, is not sending a ton of templated emails or using auto-dialers to spam the market. Not only will they annoy your prospects and make you look bad, but they might also risk your URL reputation if they’re using your email. I recommend keeping SDR emails at a maximum of 3000 per month or 150 per day, and make sure that autodialers are only used for SMB campaign. You don’t want to annoy a C-Level executive at a 100+ person company with an autodialer where the change in ambiance noise, and the frequent dropped calls make you look bad.
To verify, demand: “I need to have access to the system that sends emails and the phone dialer, so that I can check the daily volume of work being done. Will you provide that?”
Manager Ratios: Make sure that your SDR has a healthy management ratio. Without a good manager running 1:1’s and helping him, their turnover will be high. You wouldn’t run a team of 20 SDRs with just one or no managers right?
To verify ask: “I’d like to meet the manager that will be in charge of helping my SDR perform. How often can I speak with them if I need help with my campaign? Can I have a direct dial to them?”
Performance Metrics and Analytics: You also need to make sure that you know how much progress is being made week by week, how many emails are positively responded to? How many are “unsubscribes” or “remove from your list”? How about calls? How many people actually listened to your calls, what were their objections?
To verify ask: “Beyond the meetings set and activities, what other metrics will you share with us on a weekly basis?”
Strategy Lead vs. Follow: Another important aspect is the amount of time it takes to manage this team, and the effort required to adapt messaging when needed. Make sure that the team is self-sufficient and brings the expertise in messaging.
To verify ask: “Will you come up with your own messaging, or do we need to give you a script and email sequence? If you are building your own, what does that process look like?”
Data & Bounce Rate: You also want to ensure that the data being used is high quality and you minimize your bounce rate to protect your email reputation.
To verify ask: “Do you source your own data, or do we need to provide you with that? If you source your own, what vendors do you work with?”
Cost Distribution: The final test for any company to pass is to have a reasonable explanation of their fees and how those are distributed. Similar to the steak, if it costs $4.50, what’s your cost of the meat, and labor to prepare it?… follow the same logic. Don’t fool yourself, if the costs look way below market… something is fishy and you’ll be served dog meat. Trust but verify!
To verify ask: “Your monthly fee is $X. Can you approximately share what the SDR Salary, manager salary, cost of tools, cost of overhead, and profit margins look like?”
You can also ask further questions about their ability to execute tasks on Linkedin. How the SDR social profiles will look like, the number of leads they will burn through per week, the process for deciding what’s the minimum acceptable title they will book for a meeting with, their ability to follow up with tradeshow scans or other leads, and so on. The above questions are just the tip of the iceberg to make sure you don’t get yourself dog meat, but when it comes to creating the perfect strategy for your company or product, feel free to add more questions as well.
There you have it. Hopefully, this article will help you err on the side of caution, instead of the side of over-trusting. By asking all the questions above you will guarantee yourself a high-quality team.
Also, remember, if you can’t afford to go out and eat steak, and you don’t have the time to learn how to cook, see what you are willing to compromise.
A “NY Strip” for $4.50 is just not going to cut it.
Also published on Medium.