Why to Consider Outsourcing Your Sales Efforts

Letty Gutierrez-BujakBy Letty Gutierrez-Bujak

With economists recently predicting a growing US economy, this could be the year employers can afford to give pay increases. Will that be enough to keep your best sales people? Is keeping expensive employees the right decision for every business? Is there a better way?

Let’s take John, for example, a SVP of Sales for a mid-size company, sees the economy is improving, but is still concerned about paying his people enough as he has already seen some of his top sellers leave for significant pay increases. In retrospect, he knows he could not have competed while still delivering the profit margins required by the CEO. He knows Jane, Chief Sales Officer for a same size company, recently outsourced her sales staff. She tells John it is working well and she wished she had executed outsourcing sales sooner. For Jane, outsourcing makes financial sense; it is faster and more focused.

Overall only you know what is best for your company, however as Jane considered the below in her analysis of outsourcing versus an in-house sales team you should too.

Financial: A watchful eye on expenses is at the heart of every business. There are two key measures that companies, investors and executives rely on—simply put, money in and money out. The cost of acquiring a new customer includes the cost of a seller: the base salary, healthcare, vacation, sick days, 401K and other perks. It’s the norm to pay a seasoned sales executive six-figures. A recently published article reported nearly 70% of sales people are currently looking for a job, hence the overhead of getting yet another sales person up to speed is costly. Another 45% plan to look for a new job in the next three months. The expense associated with maintaining top performers is not only costly, but a risky endeavor. Ultimately a top seller who is producing has the likelihood of leaving for a better opportunity and conversely a seller who isn’t working out has lost a company critical time and revenue plus training another seller to start over.

Faster: Outsourcing is proven. A good resume does not translate to a proven track record. Research shows that a company spends 6-12 months to get a new person up to speed. Coupled with a long sales cycle, onboarding a new sales professional can prove to be a recipe for disaster. Unless you have a dedicated sales manager properly monitoring metrics and communication with prospects, at the end of the day a company can miss out on significant revenue. A benefit of an outsourced sales person is they move more quickly. You should see activity right away and results in a fraction of the time of a sales person.

Focused: An outsourced sales person is 100% focused on only sales. A McKinsey Global Institute Report study notes sales people spend 39% of their time on role-specific tasks. Other day-to-day activities sneak in and while important (and sometimes not), they derail productivity in growing the business. Some of these activities include:

  • Training other sellers
  • Research
  • Monitoring productivity
  • Account work – Although important especially if client is upset can take countless hours away from seller!
  • Operational work
  • Collections
  • Marketing
  • Office politics
  • The famous water cooler conversations

Some of the above activities also take away from the mindset to sell. For example, a seller is knee-deep with a long-standing client who is upset and wants to take business elsewhere. After the back and forth, the client remains, however the seller is now emotionally drained and not motivated to do business development for the remainder of the day. The outsourced seller simply never has to deal with the above distractions and can consistently stay laser focused on results!

Forging Ahead: “In the end, all business operations can be reduced to three words: people, product and profits. Unless you’ve got a good team, you can’t do much with the other two.” -Lee Iacocca

The same holds true for sales. For roughly the same price as bringing a mid-level seller full-time, you can hire an experienced outsourced business developer to expedite and maximize your sales. Keep in mind this doesn’t even take into consideration that a typical seller, as noted above, only spends a fraction of the time actually selling. Plus you still need to train this internal seller! Outsourcing some or all of sales allows the business owner/upper management to focus “on the business” versus “being in the business.” Exactly where everyone needs to be for productivity and continued growth!

In the end, John did consider Jane’s advice in his own company and didn’t fully outsource but cherry picked certain roles to keep in house. He knew he had unbelievable closers, but these sellers did not have the bandwidth to prospect nor set initial meetings. He elected to outsource the prospecting and appointment setting roles and let the closers do what they do best: close. Since implementing this strategy, John has seen an increase in sales with no attrition in his internal sales team as they are focused on what they like and do best.

Letty Gutierrez-Bujak is Founder of The Sales Farm. For over 20 years she has worked in a sales capacity and has developed and closed millions of dollars in new business. If your business is looking to “farm out” some or all of its sales or, if you would like assistance in expediting sales growth, contact The Sales Farm at 512-244-2425.

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Wordsmith Peter DeHaan shares his passion for life and faith through words. Peter DeHaan’s website (www.peterdehaan.com) contains information and links to his blogs, newsletter, and social media pages. Peter DeHaan is the president of Peter DeHaan Publishing, Inc., (www.peterdehaanpublishing.com) the publisher and editor of Connections Magazine and AnswerStat, and editor of Article Weekly.