Businesses around the world continually look to streamline their operations, with the ultimate goal of saving money on overhead costs. Cost-effective strategies can improve profitability, and nowhere is this more important than in sales. Outsourced sales operations are being adopted by companies of every size and type, allowing them to reach new audiences, reduce risk, and generate leads. With this cost-saving opportunity, an outsourced sales team can transform sales operations, leading to improved revenue streams and new customers by leveraging the power of a dedicated staff.
In this guide, we’ll explore the concept of sales outsourcing, including outsourced telemarketing services. Then, we’ll investigate how this practice can save money, improve efficiency, and stimulate business growth.
Sales Outsourcing: An Overview
In simple terms, sales outsourcing is turning over the sales operations (or a part of them) to an outside agency or individual. There are many outsourcing service providers, each with their own unique way of conducting these operations. Such providers have extensive training and protocols, and many employ advanced technologies to track customer engagements, providing detailed data to the clients they are working for.
Can Third-Party Resources Really Improve Sales Processes?
When one thinks of using a third-party sales resource to improve the operation, many companies tend to misunderstand the value inherent in this type of arrangement. Trying to revamp the sales model without farming out to a third party can often lead to trouble. Examples of potential pitfalls companies may experience when trying to save money on sales costs include:
- Utilizing indirect sales providers and services, such as product/service resellers or so-called “solution partners”.
- Handing over inside sales to employees not qualified or experienced enough to handle the unique tasks. Imagine what would happen if your product engineers also handled sales functions, including reaching out to potential customers – doing so could be a recipe for disaster.
- Trying to create new opportunities by adding commission-only professionals or agents to the mix.
In a loose sense, the above examples are forms of outsourcing, but the reality is that these three examples are situations a smart company will avoid whenever possible. Effective providers have the experience, the tools, and the tactics needed to handle the most critical aspects of operating a business: Engaging with potential customers.
The Sales Picture: Changes and Challenges
Regardless of the company, many small business operations struggle with the challenges of reaching new customers. The process of sales – attracting new customers and converting contacts into transactions – is already challenging enough. Small companies can face significant hurdles in this department. These hurdles may stem from a lack of experience on the sales team, especially in lead generation, or may require expenditures a company and its staff are unprepared for.
Advances and shifts in technology can also create complications in the sales arena. New technologies and ever-changing practices become available on a constant basis, and these new features may force a company to adapt its selling approaches quickly. For example, changes in communications tools or evolution of customer preferences may necessitate a revised sales practice to leverage successfully, and many companies simply do not have the flexibility or experience needed to do so. Social media marketing is an illustration of shifting consumer preferences; using social media platforms effectively has been difficult for many business operations unfamiliar with the tools and techniques needed to succeed in this arena.
Costs represent significant challenges companies face in selling. Overhead costs are always a concern, regardless of the size of the business in question. Doing more with less has become the mantra in the modern business world, and this has dramatically altered the sales landscape. Unfortunately, without careful evaluation and overview of practices, costs can run out of control. The direct costs associated with in-house, particularly the cost per lead generated, can harm a company’s profitability, especially as these costs increase over time through inefficiency. It is clear that a solution is needed to rein in costs and to improve efficiency. That solution is the outsourcing of inside sales.
Are There Drawbacks in Using Outsourced Sales to Grow Businesses?
In any sales venture, there are advantages and drawbacks to be aware of. The same applies to the concept of outsourced sales. It is important to note that the advantages of outsourcing sales greatly outweigh the potential drawbacks, but business owners need to understand that certain pitfalls may negatively impact business prospects.
The first drawback is that outsourced sales are not a dedicated resource. Larger, more established businesses typically have their own sales departments and processes that have been refined over time. It may not make sense for these companies to use sales outsourcing models but still may provide benefits. Smaller companies, particularly startups, do not have this drawback and are not typically equipped with experienced sales professionals. Sales outsourcing service providers, then, provide great value for these ventures.
Another drawback lies in the methodologies used. In-house sales teams may have developed tactics and strategies over time, and these strategies produce the desired results. An outsourced sales team may apply different tactics, and sometimes these do not mesh well with the methodologies already in place. To overcome this potential drawback, it can be beneficial for the two entities to meet and to learn each other’s’ methods to ensure continuity.
Which Companies Can Benefit from Outsourced Sales Strategies?
It can be argued that any business can gain the benefits from sales outsourcing. This system tends to improve efficiency, reduce costs, and leverages sales expertise. Still, there are certain business categories that receive greater value from the outsourced sales model than others. These include:
- Emerging growth and start-up companies
- Technology firms
- Medical device
- B2B business ventures
- Financial Services etc…
Each of these business types do not typically have a focus on sales. For smaller ventures, a lack of experienced sales staff or staff focused on daily operations can sometimes get in the way of business growth. Taking on sales initiatives can prove overwhelming. For these companies, outsource sales makes a lot of sense and can produce the desired results at a fraction of the costs of an in-house sales team.
Lead Generation: The Key to Success in Outsourced Sales Strategies
The generation of leads is a critical component of any sales venture. Locating and targeting potential new customers is always the goal for businesses that wish to enjoy continued growth. The process of lead generation, unfortunately, can be expensive in terms of funding as well as in time, and that is where outsourced sales providers can provide distinct benefits.
According to HubSpot, 85% of B2B marketers say that lead generation is the most important goal. Over 60 percent of all business owners indicate that generating traffic and leads is the biggest challenge they face in their operations. How can sales outsourcing produce the leads needed to thrive in competitive marketplaces? There are three factors that influence lead generation:
- Outsourced sales providers are adept at cold-calling and appointment booking initiatives.
- Sales providers typically have proven strategies for producing leads, and these strategies have been honed to produce the best possible results time and again. The best service providers will share their results and histories with potential clients.
- Many companies simply do not have the resources to establish an in-house sales team. Outsourced sales providers take the headaches out of the equation, providing the expertise needed to identify and reach new customer bases in the most efficient manner possible.
Boosting Efficiency While Reducing Expenses
Inside sales outsourcing can improve both lead generation and execution for businesses. Highly-trained professionals use the latest tools and technologies to improve efficiency. An outside sales team is just that: a team working for a company that manages these practices all day, every day. With that kind of focus and that blend of training, tools, and results-driven performance, handing over sales to a third-party provider begins to make a lot of sense.
The first cost-saving advantage lies in this capability; while inside sales units in a given business may need to experiment with techniques or strategies as a sales campaign begins and before the desired goals are achieved, an outsourced provider is ready to produce results right away. This slashes overhead costs, particularly when ramping up a new initiative.
Tracking & Tools
Leading service providers also use rigorous tracking and reporting tools as a means of providing detailed sales information to their clients. This is a tremendous advantage in terms of direct costs such as cost per lead. In-house teams sometimes suffer from an inability to pinpoint leaks in the sales funnel, or may not be able to understand why certain leads are lost at different points of the campaign. The outsourced team, such as an outbound telemarketing team, collects and analyzes data to improve customer touches and generate leads efficiently. A related advantage is the safety net of responsibility: in order to succeed, an outsourced sales provider must produce results, and that means bringing in new customers and closing deals. To achieve these results, the provider takes on a significant portion of the risks involved in sales, and is thus responsible for delivering results.
There are many more advantages companies can enjoy when choosing to farm out sales to a third-party provider. To summarize the many advantages of outsourced inside sales practices, the benefits include:
- Time and Cost Savings – outsourcing teams are equipped with the tools and knowledge to get campaigns up and running quickly, ultimately saving money over in-house operations.
- Reduced Risk – by outsourcing some or all of its sales, it is also outsourcing some of the responsibility to a third-party provider. This can be an effective risk management strategy, especially for smaller businesses in competitive market sectors.
- Improved Performance – outsourced telemarketing professionals and teams have the experience, the focus, and the training to deliver results.
- Market Expertise – there are many third-party providers that have unique insights into specific markets, giving them an advantage for specialty sales. These insights can spur new ideas and new ways of connecting with customers in a given market niche.
- Safe Business Growth – many smaller firms simply do not have the budget or the resources for a dedicated in-house team. By engaging with an outside provider, they can gain the advantages of a dedicated team without the overhead and training costs associated with creating their own department. This can help the business grow safely, without unnecessary risks or expenses.
Choosing the Right Outsourced Sales Provider
Now that we understand sales outsourcing and have explored a few of the many advantages of adopting this model, the question becomes: How does one choose a provider?
Different companies have different needs and varying goals. Some companies may benefit from outbound telemarketing options, while others need a full suite of inside sales services. Many companies can benefit from a dedicated customer service department tied to the sales operation, such as a call center.
Identifying Sales Needs
The first step in evaluating a service provider is to take a close look at the specific services the outsourced sales companies offer to their clients. Some may offer customized sales solutions, while others may incorporate a range of services into one package. Make sure that whichever provider you choose for your company’s growth has the services you need to make the sales operation as efficient and as effective as possible.
Some outsourced companies specialize in specific fields, such as healthcare, technology, agriculture, or defense contracting. These providers can be invaluable in taking sales to an entirely new level, and have industry knowledge that is critical in connecting with customers. If your company occupies a unique niche in your market, it is a good idea to seek out specialty providers, if available.
Capabilities are the most important consideration, yet too many companies focus solely on the costs associated with outsourcing sales. While settling on the lowest-cost provider sounds like it makes sense, the reality is that budget-oriented service providers rarely have the technology, the experience, or the mastery to achieve the desired results. Remember: it is more important to partner with a provider that can deliver.
Create A Partnership
Finally, understand that in order to achieve the results you want from your sales services provider, it is important that the provider is able to create an active partnership. Demand interaction from your provider, especially in terms of regular data collection and reporting practices. The stronger the business relationship, the more capable and successful the partnership between business external provider.
Contact SalesFish today to speak to a sales expert.