To hire an in-house sales team or an outsourced sales team? That is the question.
Consistent sales are the name of the game. Customer acquisition drives both revenue and growth. With that in mind, hopefully you have your eye on the prize: gaining your next customer. Should you hire an in-house sales development team, or should you consider outsourcing?
On the one hand, an in-house sales development team is a good option as they’re right there for you, and likely, they’re a team handpicked by you. However, not everyone has it in their budget to hire a full-time in-house sales development team and provision them with the technology, data, and support needed to optimize performance. Considering outsourced sales development? Well, you’re in the right place.
Why choose outsourced sales development?
Consider the old saying time is money. While there are quite a number of reasons to choose outsourced sales development for your lead generation needs, the right team can help you save both time and money.
An outsourced sales development representative (SDR) company can provide appointment setting in an end-to-end setting. Outsourced SDR companies offer omnichannel approaches to lead generation and ultimately, appointment through conducting services such as cold calling, LinkedIn outreach, email outreach and more. Their teams conduct outbound outreach, qualify inbound leads or a combination of the two with the focus on driving efficient and effective outcomes.
Related: Ready to hire an SDR? Learn what goes into an SDR playbook to make sure you have the most informed sales reps.
Outsourced sales development vs. in-house sales development
Considering outsourcing your sales development? You’re not alone. In fact, many departments, including engineering and marketing, tend to outsource at least a portion of their needs. So why not outsource sales development as well?
As with everything, there are pros and cons to both outsourced sales development as well as in-house sales development. Understanding what those pros and cons are can help you make a more informed decision on what may be right for your company. After all, every company is uniquely positioned and there is no one size fits all answer.
The three main reasons business owners and executives seek to outsource their sales development needs are time, cost and effort. Let’s break it down a bit more and look at some of the pros and cons for each.
Outsourced sales development
First, let’s discuss outsourced sales development. Some typical scenarios in which business owners/executives may outsource their sales development needs are, for instance, when they look to expand into new markets or even to offload tactical SDR work leaving in-house sales teams to focus more efforts on selling versus finding and qualifying leads.
Here are some of the pros and cons to outsourcing:
Pros of outsourced sales development
Cons of outsourced sales development
- Experience: Outsourced teams come fully trained with a plethora of experience to ensure that the job gets done right the first time.
- Cutting-edge technology: Technology can be expensive. Outsourced SDR teams typically have access to the latest and greatest in technology to help streamline the SDR process. By outsourcing, you’re saving significantly on any technical debt or recurring charges to maintain any subscription software.
- Lower cost of sales (money): By outsourcing, you don’t have to budget for recruiting, benefits, cost of training, management and technology costs, leading to a much lower cost of sales.
- More focus on strategic initiatives (time): Outsourced SDR teams provide you with appointments with qualified leads. By outsourcing, you’re able to focus more efforts on strategic initiatives and closing sales.
- Market expansion: Entering into new markets often means lengthier times to see conversions. With an experienced, outsourced SDR team you can greatly reduce the amount of time and effort spent diving into these seemingly unchartered waters.
- Ideal customer profile (ICP): If you don’t have a clear understanding of who your target market is and have communicated that to your outsourced SDR team, it could hinder their ability to perform.
- Disconnect: While an outsourced SDR team provides regular reports, suggesting changes can be challenging to convey in real time.
- Lose learnings: SDRs are a critical part of the feedback loop. For instance, if prospects are routinely commenting on a software integration they’d like, this information would be great for the company. However, while outsourced SDR teams say they’ll provide this information, they are not obligated or incentivized to do so.
In-house sales development
Next, we’ll discuss in-house sales development. No matter which direction you choose to go, building a pipeline and setting appointments is integral to the success and growth of your organization.
When considering whether to build your own in-house sales development team, there are a lot factors that might come into play. For instance, if you’re working with a larger budget and have the luxury of time, an in-house sales team may benefit you more.
Let’s look at some of the pros and cons to an in-house sales development team:
Pros of in-house sales development
Cons of in-house sales development
- Control: One of the biggest draws to building an in-house team is that you’ll have control over everything from training to making on the spot adjustments in real time. Company leadership will have a direct working relationship with the team.
- Gain learnings: The feedback loop provides valuable information and building an in-house team can ensure that the pertinent information is shared with company leadership.
- Loyalty: While an outsourced SDR team would be loyal to your organization in that they would fulfill their obligations to you, an in-house team would work solely for your organization. They would also be familiar with your company’s mission, vision and values and would embody your company’s culture.
- Performance evaluation: An in-house team means more eyes on performance and ability to evaluate the full parameters of skills, training and performance of the sales development rep.
- Cost: Having an in-house sales development team means acquiring costs such as recruiting, training, benefits, risk of mis-hiring, promoting and management. It also means that you’ll need to spend on the various software and other technologies that are necessary to set your team up for success. The technology portion alone can have a pretty hefty price tag.
- Less focus: From building a pipeline to qualifying leads, setting appointments and conducting sales presentations to convert prospects, your in-house team would have less focus on selling as they would need to balance their time between all of those.
- Experience: It takes both time and money to teach your team the ins and outs of sales. More often than not, when hiring an in-house sales team, it takes time to get your team up to speed on your mission and to start seeing conversions from their efforts.
Cost of outsourced sales development vs. in-house sales development
As we’ve already discussed a bit, one of the biggest influencers in determining whether an in-house or outsourced sales development team is right for business owners comes down to money. Let’s compare some of the costs to get a good feel for what some of the costs are.
This is an idea of the cost of a lone in-house SDR and does not take into account having to hire any management or additional personnel.
- Salary and bonuses: $74,000/annually (Glassdoor)
That $74,000 price tag does not include any additional costs, such as:
- Employer taxes
- Software licenses
- Human resources expenditures
- Training costs
Realistically, you’re looking at a price tag of about $150,000 – costing your company double what their salary is. Check out the annual price tags on a few types of sales software:
- Hubspot: $14,000 (for 10 users)
- InfusionSoft: $3500+ (10k contacts)
- Salesforce: $3,500 (per user)
- LinkedIn Sales Navigator: $1100+ (per user)
- Outreach: $1200 (per user)
Outsourced SDR companies have numerous clients which helps spread out the cost of training, onboarding, software licenses and technology. While the actual price tag of an outsourced SDR team will vary based on the needs of your company, you could be looking at around $45,000 annually. In that $45,000 you can typically expect:
More than one SDR working on your project, including:
- Sales specialists
- Account executives
- Sales managers
- An experienced team, fully trained and ready to go
- Cutting-edge technology to ensure the success of your sales needs
12 benefits of outsourced sales development
It’s no secret that without enough high-quality leads your sales pipeline will dry up fast. Without a sales development team – whether in-house or outsourced – you’ll likely find yourself struggling to grow your company.
While time and money are two of the biggest influencers for business owners and margin-minded executives, there are many other reasons to consider outsourcing your company’s sales development.
Here are 12 of the main reasons you should consider outsourcing your sales development needs.
1. Sales specialization and experience
Outsourced sales development companies have expertly trained SDRs that specialize in sales. By bringing in an outsourced sales development company, you’re not just gaining the knowledge and experience of a single SDR, you’re gaining the knowledge and experience of an entire team. Each member of that team typically has years of experience in sales.
2. Faster entry into new markets
Diving into a new market can mean lengthier times to start seeing conversions. However, by outsourcing, you have the ability to dive into new markets without sacrificing core sales. What that ultimately means is that while simultaneously running your core sales, an outsourced SDR could also scout and test new markets, introduce products and help you to expand into new regions and new markets. This process decreases the amount of time to conversions when venturing into new markets.
3. Access to cutting edge sales technology
Did you see those price tags laid out above? Technology can be expensive. Put the words “cutting edge” in front of that and you may as well add an extra price tag to it as well. Fractional and full-time SDR teams have access to cutting edge sales technology. By outsourcing, you’re not only gaining access to a team, but also to their technology, which further reduces any licensing costs and the cost of training anyone to use the technology.
4. More focus on strategic initiatives
“Always be closing.” A frequently used motivational phrase in sales, to be sure. This mantra is for sellers to always be in the mindset of closing, but can they really do that when they’re also the ones responsible for outreach and qualifying leads?
Outsourcing your sales development means affording your team more time to focus on closing and strategic initiatives, while the outsourced SDR does the heavy lifting.
5. Target new and/or underserved markets
Venture into unchartered or underserved territory with an experienced team to help you maximize your return on investment. When targeting new and/or underserved markets, you need to be able to remain flexible and to pivot rapidly. Outsourced sales can scale up or down as rapidly as you’d need it to in order to meet your company’s changing priorities when venturing into uncharted territory with the added benefit of not losing out on your core sales.
6. Adopt a cross-functional business model
A truly effective business model incorporates a cross-functional design, where overlap and communication are key, and outsourcing can provide you with just that. With a good, open-ended partnership between your internal staff and your outsourced SDR team, you will also benefit from the insights and knowledge gained.
7. Omnichannel customer engagement
Reaching out to your potential customers can be a stressful endeavor. By working with an outsourced SDR team, you benefit from an omni channel customer engagement approach to lead generation. From cold calling to email and LinkedIn outreach, outsourced SDR companies typically take a multi-pronged approach to getting appointments on the calendar.
8. Lower cost of sales
With money being one of the biggest decision influencers, lower cost of sales is sure to be one of the most beneficial reasons to outsource your sales.
When you add up the cost of hiring and training an in-house sales team and the cost of the necessary technology, the numbers can be daunting. Reflecting back on the price tags above, you can see that an in-house SDR realistically costs about $150,000, whereas an outsourced SDR team averages about $45,000.
For that $45,000, you’re receiving qualified leads, appointments on the calendar each month and access to the latest technology. When you factor the number of leads received each year over the amount spent, outsourcing is the clear winner.
9. Data insights to increase profits and revenue
Lead generation, really sales as a whole, should not be about trusting your gut, but rather using data insights to help drive conversions and increase your company’s profits and revenue.
By hiring an outsourced sales development company, you’re not only gaining further insights into your own efforts, but you’ll also be gaining the knowledge and insights from the SDRs who are not only familiar with your industry, but also your competitors. This can help you decrease loss and increase profit and revenue by applying lessons learned to your own sales efforts.
10. Focus and no distraction
An in-house sales team is typically responsible for generating the leads, working them through the sales funnel and converting them to customers. That can be a timely and costly endeavor. However, with an outsourced SDR team, you can focus on nailing your sales pitch while they get the appointments on the books.
11. Coaching, training and development
Coaching, training and development all have something in common: they can all be costly and time consuming. No longer do you have to worry about training and mentoring an in-house sales team; outsourced SDR teams are all provided with those at no cost to you.
12. Speed to outcome
Perhaps the biggest advantage is that an outsourced SDR team can help you reduce the time to your desired outcome. Regardless of whether your company is a startup or firmly established business, time is money. An outsourced SDR team can help you decrease your time to market and the speed of your desired outcome.
Through hiring an outsourced sales company, you gain the advantage of being able to dial-in on messaging for specific verticals to help ramp up your sales process in a rapid manner. This can be particularly important when your product or service is rather complex or has a longer sales period.
If time or money play a part in determining whether in-house or outsourced are right for you, outsourced sales development is the clear winner. Though there may be instances where an in-house team would make more sense, if you’re not bringing in your own full-service sales team with the sales pipeline to back it up, the cost benefit just isn’t there.
An outsourced sales development team can assist with not only reducing the overhead expenses, but also reducing the speed to outcome while simultaneously lowering the cost of sales. That’s money and time saved for you to focus more of your company’s assets on strategic initiatives and closing sales.
We can’t forget that outsourced SDRs normally have access to the latest technology in the industry to help streamline the process and further increase your ROI. With access to databases and even automatic dialers capable of calling hundreds of phone numbers in a short period of time, it’s truly an option worth exploring.