There are many levers a sales leader or organization may pull to gain scale, accelerate revenue, drive cost savings, or augment sales team structures. A viable and proven option is handing over some or all of your sales efforts to outsourced sales professionals. In this guide, we cover how to outsource sales
It’s true that outsourcing your sales to a third-party provider can yield favorable results. However, the process may not happen smoothly without preparation and the shaping of expectations by both parties.
- There are many outsourcing companies, but which of them can actually hold a sales quota and get results?
- How can you be sure you’re choosing the right one?
- Will partnering with an outsourced sales provider really impact your top and bottom line?
- And once you select a sales partner, how can you be sure you’re getting the most out of the relationship?
First, we go over the outsourced sales definitions, what and how to outsource, when sales outsourcing makes sense, and when it doesn’t. Then we go into our tips to make sure you select the sales solution provider that best fits your needs, and starts building revenue.
If you want to skip straight to the Do’s and Don’ts of sales outsourcing, use these jump links.
1) DO place more emphasis on capabilities than cost.
2) DO play an active role in the partnership.
3) DO ensure sales and marketing are aligned.
4) DON’T get lost in the selection process.
5) DON’T expect immediate results.
6) DON’T engage with a basic call center. Find a true sales firm.
What is Sales Outsourcing?
Sales outsourcing is when a business delegates parts of the sales process to outside individuals or agencies. This can be done if the internal team lacks the time, resources, or expertise to handle all of their sales processes in house. Outsourcing sales can help increase flexibility and allows sales teams to focus on higher level tactical tasks or strategy.
Reasons to outsource include:
- Lack of expertise and experience in some sales functions (e.g. Lead Generation).
- Scalability issues (you need SDRs only for some campaigns).
- Cost efficiency (e.g. Account Executives doing cold calling).
What sales outsourcing should NOT be:
- Indirect sales channels like resellers, solution partners, etc.
- Opportunistic side bets by signing up some commission-only sales agents.
- Assigning sales functions to other departments (we’ve seen R&D doing sourcing)
Outsourced Sales Equals Flexibility
Changing or outsourcing one sales function leads to changes in other sales functions. And that’s good!
Let me give you an example:
Outsourcing sales development consequently has an impact on your Account Executives. Due to which, SDRs will ask for completely different sales material than your Account Executives are used to having.
Account Executives focus on the conversations in meetings. They present product values and benefits. SDRs focus on securing such a meeting.
If you don’t see this sales outsourcing as strategic, you might not be patient enough to listen to their issues, feedback, and objections. This may push you to turn a blind eye to the different needs of each team.
Can You Outsource Sales?
Surprisingly there’s a lot of external expertise-as-a-service options available! Some functions are obvious (e.g. lead generation), but others are not:
Finding a product/market fit
This is a bigger portion of my own business than I had predicted when we began.
We help businesses realign their existing value proposition to the market specifics by talking to real buyer personas within their Ideal Customer Profile (ICP).
What are their real pains? What alternative solutions (internal and external) do they have right now to ease their pain? How well does your solution fit in there? Is there a dominant competitor? Would the product fit the selected market?
Product/market-fit evaluation is key in every new market you want to enter as part of your Go-To-Market strategy (geographically and target-segment).
Selling successfully in your home country doesn’t always mean that you can expand your business internationally.
Building a repeatable sales model
Sell directly to customers or through various sales channels? Inside sales or field sales? Inbound lead generation or outbound cold calling?
These are all possible options. First of all, what’s the perfect pattern for your business that can be repeated many times successfully? Where do you invest to scale your business? How do you generate predictable revenue?
If you sell directly to the US, it doesn’t automatically mean you’ll sell directly to Germany. There are sales specialists who help you with that in a non-consulting, first-hand, prospect-facing manner.
Systematically generating leads
This is the most outsourced sales function.
You’ll find a number of different lead generation services:
- Inbound lead generation agencies (content marketing, social selling, SEO experts)
- Sourcing services (identifying and prequalifying named target companies and real buyer personas according to your ICP)
- Outbound lead generation agencies (cold calling and email prospecting)
- SDR services (sales development) to qualify, follow up and nurture leads by email and phone and to discover sales opportunities for your own account executives (AE).
Closing the sale or sales execution
Sales Qualified Leads (SQL) can be processed by field sales or by inside sales, depending on the complexity of the product, the target segment, and the related sales process.
Inside sales are sales specialists that can present and sell products over the phone and web conferencing tools.
Field sales (Account Executives) are what you need for high touch, complex B2B sales to larger enterprises where you have multiple decision-makers involved. You see this service often provided by individuals from a particular region and industry.
Why Would You Outsource the Sales Execution Part At All?
Usually, sales teams at lean organizations lack the time and resources to manage their pipeline, execution, and follow ups. This is especially the case when organizations want to expand into new geographies and markets, and the sales teams haven’t yet added headcount to accommodate the extra workload.
Other reasons may involve lack of modern sales execution skills to pitch new products and services.
Luckily, in most cases, there are plenty of service vendors who can become extensions of your sales team, allowing you to scale your sales pipeline with the company’s growth without having to add headcount.
How Much Does Outsourcing Sales Cost?
Hiring an outside team may seem expensive, but you’d have to balance that with the costs of expanding your in-house team to fulfill the functions you’re considering outsourcing. These in-house costs can include:
- Insurance and retirement benefits
- Commissions and bonuses
- Management personnel
- Sales tool stack subscriptions and limits
Let’s say the average salary of a sales rep plus benefits is around $60,000 and the average salary (plus benefits) of sales management personnel is $120,000.
Your added (and fixed) internal sales team costs would look like:
FIXED In-house Costs = ($60,000 x Team Size) + $120,000 + Commissions + Bonuses + Tools
When outsourcing some of your functions, you can maintain a smaller team size while dialing up or down your outsourced sales expenses on an as needed basis.
Typically outsourced sales professionals charge about $1,000 to $5,000 per project, or if you want a dedicated extension of your team, you might be looking at $8,000 to $15,000 per month (or more if you’re enterprise).
For roughly the same cost as adding an in-house sales manager to your team, you can get a full sales team taking care of the functions you outsource to them.
When Does it Make Sense to Outsource Sales?
Get a big 30,000 foot view of your overall sales process. Then see which parts you must keep in-house, and which parts can be done as a service by an external provider.
Don’t outsource parts of your sales if your other sales functions are not committed to it. Because not following up with calls after emails or not doing a technical workshop after a demo will hurt your business. You don’t want that kind of bad reputation.
Typical reasons and triggers to outsource parts of your sales process include:
- Drastically changing your sales model (introducing SDR/AE split, Account Based Selling, etc.)
- Introducing a new product/service that requires different sales skills.
- Entering new markets (geographically or target-segment).
- Challenging your own sales force.
- Increasing your total sales results.
Sales outsourcing agencies tend to outperform your own team with:
- Proven experience in exactly the sales functions they offer.
- State-of-the-art processes.
- Optimized reporting and analysis.
- Matching skills available in a scalable business model.
When NOT to outsource a sales function:
We’ve seen companies with very nice products and glossy sales materials without a product/market fit. They’ve already tried out many different approaches in their sales motion but always ended up with prospects that say: “Your product looks really cool but currently our top problems are in other areas where your product doesn’t help. Let me get back to you in X months.” You’ve heard that too?
There’s not a lot you can do here except pivot to a completely new direction.
Pro tip: Outsource a sales function only if you get the impression that the partner understands the outsourced function(s) much better than you do! Make sure you have clarity on what their reporting and KPI structure looks like.
How to Outsource Sales: 6 Do’s and Don’ts
1) Do Place More Emphasis On Capabilities Than Cost
When you select the low-cost option, you sacrifice expertise, leadership, and the ability to execute. Is it more important to save a few dollars on a subpar partner or invest in a specialized team that possesses the expertise in a particular channel?
There are many factors you should consider as you assess potential partners for augmenting or extending your sales team.
- Clearly define what you need, especially in terms of outcomes.
- Understand the capabilities of the partner you choose to align with.
Maybe you’re looking to augment your in-house sales team with lead qualification or renewal management. Perhaps you are expanding into the SMB space and have not been able to gain a measurable return.
You might need a team to handle your entire sales process in a new region. Once you know exactly what your business needs are, it’s critical to understand how a potential sales provider’s processes, expertise, and tools can benefit your particular scenario. Ask them to prove it to you.
Questions to ask your future outsources business partner during screening:
- What are your core sales competencies? Eg, consumer sales, B2B sales-specific, or other?
- Can you outline your organization’s sales expertise in my particular vertical/channel and demonstrate that depth of knowledge?
- Can you illustrate your firm’s proven track record of selling in the enterprise, mid-market, or SMB segments?
- How will your company support and enable expansion into a new geography or market segment? (Go To Market Strategy)
- Does your team possess the depth of experience to have executive and decision-maker business conversations?
- What tools and technologies do you leverage for successful sales acceleration and why?
- What level of return can I expect from our engagement, and are you willing to share risk relative to results delivered?
2) Do Play An Active Role In The Partnership
Once you select an outsourced sales provider and complete the onboarding process, you can’t assume that the ship will drive itself.
That’s a recipe for failure. Success comes from a fully engaged and vested partnership. Devote your time and energy to build better business relationships with your new sales partner(s). Continued communication as the partnership advances benefits both parties.
Just as you constantly interact with and guide your internal team, you need to be an active participant in your newly formed sales partnership.
How to maximize engagement with your new partner:
- Understand their selling process—from generating leads to closing deals.
- Train the extension of your sales team as you would internal hires. Make sure they are educated on your business’s strategies, processes, goals, and KPIs.
- Provide the team with relevant and available sales enablement materials, so they don’t waste valuable time searching for or recreating content.
- Meet with your outsourced team on a regular basis, and challenge them and their activities, objectives, and results. Participate in weekly touch-base meetings to stay connected on performance, gaps, and key initiatives.
- Loop your outsourced sales team management into internal meetings that cover forecasting, business strategy, and key sales/marketing objectives.
- When you set goals, hold the outsourced team to them. Evaluate the reality of those goals often. Work closely with your outsourced team to drive alignment on what success looks like. Don’t do this only once a quarter.
3) Do ensure sales and marketing are aligned
It is imperative that you have constant alignment with your extended sales team. Also, it’s important to connect them and insert them into your marketing processes. If you didn’t previously have an in-house sales function before adding an outsourced sales arm, your new team can easily become disconnected from your company’s marketing strategy.
Sales and marketing must work together to achieve the same goals. They can help each other reach their individual performance metrics more quickly.
How to align your internal/external sales and marketing teams:
- Invite key members of your marketing team to regularly interact with your outsourced sales team. Insights from the frontline salespeople who have more customer interactions than most will become a valuable asset to your organization.
- Work together to develop buyer personas to ensure that both teams are targeting the same audience. If your marketing team has already developed buyer personas, have them present the data to sales in order to ensure consistent understanding.
- Encourage your sales team to regularly report their findings to marketing. For example, sales can inform marketing on what makes a lead higher quality and why. Marketing can in turn use this information to improve their lead generation/qualification process.
4) Don’t Get Lost In The Selection Process
With so many options in outsourced partner sales, it’s easy to get lost in the process of analyzing the best fit.
While you don’t want to rush into selecting the wrong partner, dragging out the selection process is also a deterrent. It will essentially burn your opportunity to generate revenue faster than your ability to impact your top and bottom line.
Questions to consider during the selection process:
- How well does the provider drive thought leadership and creativity during the proposal process? Are they just speaking to what you asked for or are they providing innovative ideas for how to reach your sales goals? This is a good indicator of what you can expect from a partnership.
- What would my sales team look like and what is the ratio of managers to reps? Who will be managing them?
- Does this provider understand my needs and specialize in the area of sales that I need help with? If you need expertise in selling to the SMB space, do they have current teams actually selling to SMBs?
- Are we aligned on KPIs, and does the sales partner have the right metrics and evaluation tools to properly measure results?
5) Don’t Expect Immediate Results
Just as you account for a learning curve period with internal hires, you should also allow your outsourced sales provider appropriate time to learn your business.
While it’s true that you’ll save a lot of onboarding time by plugging in an as-a-service sales team, the process isn’t turnkey. In general, it will take a new team around 90 days to learn your value proposition, hone their pitch, create sales sequences, build a pipeline, and begin to deliver results.
How to onboard your outsourced sales team smoothly:
- Use a variable compensation model that includes some level of fixed compensation, as well as a way to reward success. This gives sales reps stake in the relationship and incentive to deliver results.
- Thoroughly train reps up front on your products and brand and encourage your provider to use the information to actively coach reps.
- Establish an open channel of communication so your outsourced sales team feels comfortable contacting you when needed.
6) Don’t Engage With A Basic Call Center. Find A True Sales Firm
There are many consumer-facing call centers masquerading as experienced professional sales providers. The difference between a call center and a sales center is that a call center typically focuses on inbound general customer care or technical support, whereas a sales provider is trained to directly drive revenue.
Expect your vetted sales partner to:
- Have active sales teams that are carrying quota.
- Have the ability to either scale or augment what your internal sales teams are currently doing.
- Cover new geographies or time zones that you didn’t previously have access to.
- Provide an integrated lead development process that feeds you opportunities, not just warm leads.
- Have established sales methodologies that simplify the level of complexity of the modern-day sales motion
- Have processes in place that drive quota attainment with predictability.
- Provide a sales stack that is innovative, but flexible enough to incorporate your own proven tools.
- Provide analysis and forecasting—not just reporting—to guide strategy.
Outsourced sales is a thriving and proven trend that involves: hiring, onboarding, coaching, process development, and high-yielding sales expertise.
A partnership with a third-party sales provider has the potential to boost current revenue and create new revenue streams faster and more efficiently than you can from scratch.
Whether you’re considering augmenting your existing in-house sales team or completely outsourcing your entire sales process, follow the do’s and don’ts above to get the most return out of your partnership.
Also published on Medium.