Believing These 4 Myths About Sales Outsourcing Keeps You From Growing
Debunking Sales Outsourcing Myths
For many companies, sales outsourcing has become an incredible way to grow revenue organically. Some companies choose to outsource their entire sales function to a company that specializes in sales. Others use outsourcing for test marketing, launching new products, or expanding into additional geographic areas.
If you've been thinking about trying sales outsourcing but are still hesitating, you might want to check out the following myths and see if one or more of them have been keeping you from taking your company to the next level.
#1 My Company Can't Afford It
Concerns about cost keep a lot of companies from even considering outsourcing their sales. What they often don't take into account, though, is the whole financial picture. Understanding everything that a sales outsourcing company does is vital to creating an accurate assessment of whether outsourcing is right for your business. Just as important is comparing the projected return on investment to the cost outlay. If the numbers add up, outsourcing your sales might be an excellent option for your company.
Another thing to keep in mind is that you are not choosing between paying a sales outsourcing company to sell for you and spending nothing on sales. If you choose to keep your sales function internal, your company will bear all the costs and HR burden of building a sales team. It's wise to create an internal model for costs and returns on sales and then compare your internal model with the proposal offered by a sales outsourcing company. Often you'll find that the costs for building an internal team are similar to or even greater than the cost for an outsourced team, especially when you take into account the cost in time and resources of building something from scratch rather than outsourcing it to an expert.
When building your sales model, be sure to include all of the associated expenses, including costs for recruiting, drug tests and background checks, salaries and commissions that are competitive for your industry, sales support personnel and infrastructure, ongoing training and management, and office space, laptops, and other hardware. If you're not sure where to start with making a comprehensive financial model, ask the outsourcing company you are considering for a financial breakdown of services and then compare it to your internal expenses for the same infrastructure.
#2 I'll Have More Control If I Do It Myself
On the surface, it seems reasonable and even self-evident that if you build an internal sales team you will have more control over it than an outsourced sales team. However, control of the sales function involves more than simply being the one who calls all the shots. Controlling your sales process, and more importantly your sales results, is a matter of expertise in several areas, including recruiting reps with the right profile, incentivizing them properly, implementing effective sales training, keeping the correct metrics, providing appropriate sales support, and creating and troubleshooting the sales process for maximum results.
If these sales-related functions are not core competencies for your company, you may find that you actually gain more control over your sales function by outsourcing it. When you outsource your sales, the sales outsourcing company provides you with a liaison who is responsible for implementing your plans and changes. Instead of having to deal with all the minutiae of personnel problems, unexplained sales slumps, or sales process improvements yourself, you have an expert to deal with them for you. And ramping up or scaling down a program is always just a phone call away.
An outsourced sales team is built to your specifications by experts in the industry who know how to translate your objectives into results. You specify the sales message, approve all training materials and techniques, and receive regular updates on program metrics and results. In addition, you are always welcome to attend training meetings or ride-alongs to make sure that everything is functioning the way you want. You get control over the process and results, while avoiding the necessity of fixing every little problem yourself.
#3 Outsourcing Is Risky
As with any business partnership, you should make sure to do your due diligence before entering into a relationship with a sales outsourcing company. While many sales outsourcing companies maintain high standards of conduct and performance, there are a few real lemons out there. As you evaluate companies, pay attention to details. Find out how long the company you are considering has been in business, and read some of their case studies (no case studies available? That's a red flag right there). Do they hire their reps as W-2 employees or 1099 contractors? The W-2 route is far more reliable.
You can gain a lot of insight from a company's website. Is it professional and clearly written? Does it include a page listing the executive team? If the executives of the company have significant experience and inspire confidence, the company is worth looking in to. Another important element of due diligence is to call the company. Nowadays it's easy to set up a website with an automated phone system. Do you have to wade through layers of an automated spiel, or does a real person answer the phone?
Also consider your alternatives to outsourcing. Many of our clients here at Netpique sales outsourcing come to us after getting tired of throwing time and money at problems within their internal sales program. Trying to build a sales program from the ground up can be risky if you don't have the expertise to set it up correctly or the bandwidth to manage it efficiently. Finding a reliable sales outsourcing company can be one of the most reliable and least risky ways to increase your sales productivity.
#4 I Don't Want to Pay Before I See Results
Well, this is more of wishful thinking than a myth. Wouldn't it usually be nice to get stuff before you had to pay for it? Unfortunately, though, especially in business, new initiatives tend to require some financial outlay. A sales outsourcing company that offers to get you sales with no money upfront is probably not going to put forth the type of time and resources necessary to set up a reliable sales program that will get you good long term results.
Some less solid sales outsourcing companies hire a steady stream of 1099 contractors, paying them nothing but commissions on sales made. In theory this seems like a perfect way to get something for nothing upfront. In practice, it often has a sort of "revolving door" effect on the sales team, with many reps staying on for only a few days and weeks. The constant attrition makes it difficult to maintain a coherent brand message and ensure quality representation, let alone get consistent sales results.
More reputable sales outsourcing companies hire their reps as official W-2 employees and pay them an industry-appropriate salary and commissions. Developing a stable, dedicated W-2 sales team promotes quality brand representation and allows for effective training and management, resulting in a sales function that produces a strong and reliable return on investment over the long haul.
If your company has been considering sales outsourcing, we can help you evaluate your current sales situation and whether outsourcing would be a good option for you.