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B2B Sales Outsourcing Is Dicey. Here’s How to Do It Right
I run a European-based sales agency for software and technology companies. In this article, I will summarize what I’ve learned about B2B sales outsourcing.
What is Sales Outsourcing?
Sales outsourcing gives parts of your own sales process to others (individuals or agencies).
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)
When Does it Make Sense to Outsource Sales?
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.
4 Underrated Sales Functions That Can Be Outsourced (Functions You Don’t Normally Think of)
Surprisingly there’s a lot of external expertise-as-a-service options available!
Some functions (e.g. lead generation) are obvious, but some are not:
1) 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.
2) 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.
3) 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).
4) 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?
- Lack of modern sales execution skills to pitch new products/services.
- Low availability on the ground to expand to new geographies.
- Language and culture barriers.
When NOT to Outsource a Sales Function
No product/market fit:
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.
That’s not a sales topic. Nothing to outsource here. Do your homework.
Doing outsourcing as a side bet:
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.
Outsourcing = 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.
It All Comes down to YOUR Business
Sales outsourcing will definitely come to you with some early stage problems like incorrect expectations, lack of transparency, low results in the beginning, etc. Don’t expect that everything runs smoothly within the first 3 months. Have a budget for 12 months—and yes, pull the plug if necessary.
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.
Also published on Medium.