Value proposition is what starts a company, maintaining proper customer relationships makes it grow and revenue generated from sales keeps a company running.
Sales is a domain in which even people with no experience can succeed and at the same time people with years of experience may sometimes struggle. For a company optimizing its sales channels, it is of paramount importance and is a process that takes years to build and even after that time is always a work in progress. There is another way with which companies try to achieve their sales targets and stay on a growth trajectory. Outsourcing sales is not a concept unheard of but is something that is highly debated and scarcely used. A part of the reason is lack of knowledge regarding the pros and cons of outsourcing. Another major reason is lack of reliable partners in the industry that can be trusted with the all important task of bringing in sales for your company.
Let us try and address the first issue and see if outsourcing sales is a good option or the traditional method of building a team from the ground up is the smart way.
Let’s start with resource costs-
In House –
Salary – Fixed and variable salaries, bonuses, ESOPs (company shares), retention bonuses, joining bonuses, relocation bonuses are some of the costs that go into your salary account.
Hiring – HR appointments, reaching out, connecting and interviewing potential candidates and sometimes even buy out cost of the existing company are the few costs that a company faces
Training and Onboarding – Before a sales person is ready to start generating revenue they need to be trained in your company’s product line, way of business, culture, processes and general sales acumen.
Infrastructure – Office space with the addition of electricity and general expenses, travel and rental costs, phone bills etc. are the common expenses that an in house team brings in
Time – Time is Money and in house teams can sometimes take a while before producing results as training and education apart, hands off experience is a different ball game altogether. Also, there is always a chance of an employee underperforming and requiring additional training or even just becoming a sunk cost.
Salary – Most of the time outsourcing is done on a contractual basis. There may be a component of variable payout depending upon the type of contract.
Hiring – One time cost of selecting the right outsourcing company
Training – Product training needs to provided as and when necessary
Infrastructure – Little to no additional cost
Time – This can both go for and against your company’s requirement. An outsourcing company, once they understand their product can be up and running in no time but at the same time as they work for multiple clients, your product might not get as much of their time as you’d like.
WInner – Outsourcing
Now let us have a look at the access to resources you get through both ways –
In House –
Knowledge – In house team might cost you more in training, hiring etc., but these people can understand your product and your customers better over time.
Tools – Getting tools to track and manage your sales operation, tools for analytics and data monitoring all come at an additional cost and might require specialized people to manage.
Data – You have to either buy leads or generate them in house. Apart from that, every data set from customer contact details to industry trends all have to be built from the ground up. Not only can this be a costly affair but can also prove to be very tricky at times.
Knowledge – As these people work with multiple clients across various domains, they acquire vast knowledge about the market and develop a deep understanding of what works when. They can even counter the destructive self-belief that is sometimes developed in a company.
Tools – Generating and converting leads is bread and butter for these companies and therefore they generally possess best in class tools, sometimes curated for them and sometimes those used widely in the industry based upon their requirements. Some even have a dedicated analytics team to maximize revenues.
Data – They have access to huge amounts of data generated over years as well as that acquired for their clients. This can lead to the optimization of results.
Winner – Outsourcing
Resources and costs apart, what about personnel? Let’s see where each stands in this regard.
In House –
Personal – For a relatively smaller or growing organization, salespeople might be juggling multiple tasks. This can be cost-effective but can also limit sales generation.
Mindset – Hunter mindset, a must in sales is a rare attribute, which can be difficult to identify and sometimes can even get lost when a corporation picks up growth.
Quality – Quality of people and work is easier to track as the team is available with you at all times.
Management – Additional tasks of team management, HR functions and admin requirements are to be faced, which can sometimes lead to counterproductive work.
Culture – They are aligned to your company’s culture and provide you with the additional strength every organization needs.
Personal – Have people with specialized skills for every task leading to optimization of time and resources.
Mindset – As they are largely paid based on their performance, these people tend to keep their hunter mindset and in some cases even go on to become more and more driven.
Quality – Quality of people and work is difficult to track as the team is not available with you at all times.
Management – No additional tasks of team management, HR functions and admin requirements are to be faced, allowing you to focus on your core strength.
Culture – They are not aligned to your company’s culture and for some organizations trusting someone else with their name could be strict no.
Winner – Tie
In conclusion, both have their merits and demerits and depending upon the specific needs of each organization, their requirements can change.
If possible the best way would be to try out both methods but be patient as the results of the in house team might take time to reflect while outsourcing can provide you very quick scalability or downsizing as per the need.