Sales Outsourcing Pricing: Expensive Overhead or Wise Investment?

We delve into the real cost of outsourcing sales development…

Faced with increased sales targets and having difficulty recruiting the sales talent you need? Or maybe your inside sales team is not performing as well as you would like? No time to follow up leads from live events? Maybe you’re unsure which technology systems to invest in to support your in-house teams? All of these are common triggers for outsourcing some or all of your sales functions.

In theory, outsourcing your B2B lead generation will ensure a regular flow of leads for your inside sales team to follow up and close. However, when looking into sales outsourcing pricing options, it’s important to remember that unless those leads convert into customers then your great idea could backfire and leave a gaping hole in your budget.

So how can you ensure that your sales outsourcing project proves to be a wise investment rather than an expensive overhead? At Pace, we’ve heard more than a few outsourcing sob stories and we see the same mistakes coming up all the time. 

We’ve distilled our experience to come up with five key factors to help you make wise – and profitable – sales outsourcing pricing decisions.

1. Focus on value rather than activity

Would you rather manage six fully-qualified leads that match your ideal customer profile, or 36 appointments with companies who don’t have a need or desire for your product or service?

The answer might seem obvious, but all too often we’ve seen companies put pressure on their sales outsourcing partner to deliver against arbitrary targets, without investing time to consider what success really looks like.

The problem usually lies in sales or marketing directors looking for a quick fix and agencies willing to over-promise in order to secure their business. To avoid this expensive mistake it is vital to take a step back and think about what you really want to get out of the engagement. 

When considering sales outsourcing pricing, it’s best to think in terms of actual financial value and Return on Investment (ROI) rather than metrics such as the number of calls or appointments.

In the long run, this approach will lead you to find a sales outsourcing company that is willing to become a strategic business partner – and to put some skin in the game by committing to a defined financial metric that leads to a clear ROI.

2. Be clear about what you are looking for before you outsource sales development

This is a vital step to accomplish before agreeing on pricing with an outsourcing sales partner. 

There are many aspects of the sales function that you could potentially outsource, so it’s vital you define a clear requirement. And it doesn’t help that the definitions between different aspects of the sales function have become blurred over the last few years.

To take just one example, it is important to consider whether you are looking for a telemarketing agency or inside sales expertise. Telemarketing tends to cost less than true inside sales expertise, so many people can rush into hiring a telemarketing agency, only to be disappointed with the results. Some key things to remember are that telemarketing is transactional, heavily-scripted, and driven by quantity versus quality.

Inside sales is a more strategic option for B2B lead generation services and focuses on identifying the right prospects, building and nurturing relationships and delivering quality leads. In other words, it is more personal, targeted and interactive and requires the skill-set of a talented communicator who has invested time in understanding the dynamics of your business and market pace.

When considering sales outsourcing pricing remember that a higher number of calls doesn’t necessarily mean a higher quality of calls or the value of relationships established. And it definitely doesn’t take into account the quality of prospects contacted. 

It can take time to reach the right person – a new sales development representative at Pace made 43 calls to a single high-value prospect before establishing a connection. Persistence pays off!

3. Work out how outsourcing fits into your sales strategy

Looking for a quick fix rarely delivers the results we are seeking and this applies to sales outsourcing as much as any other area of life! It really does make sense to spend some time thinking about how sales outsourcing can best add value to your sales strategy, both in the short, medium and long term. 

Do your existing sales processes need some refinement? What feedback have you received from your internal sales team about what they need to succeed? Do you need to build the size of your current prospect database, or cull it? 

This may sound radical, but it’s not all about volume and following up on existing records to qualify them can be a very valuable exercise. Are there opportunities to up-sell or cross-sell to your existing customers?

At Pace, we spend time exploring questions such as these, before we finalise the engagement with new clients. By getting under the skin of your business and developing insights into your sales challenges and market dynamics, a sales rep from our outsourced sales development team is able to create a recommendation that is tailored to your specific needs – and revenue goals. 

4. Don’t be afraid to focus on financial metrics

With 73% of Chief Sales Officers expecting sales budgets to increase in 2022, do not shy away from discussion about revenue goals with potential sales outsourcing partners – it could prove to be the best business decision you have made in a while! After all, if business development is the overall goal, your outsourced sales partner should be able to support your in-house sales team with closing deals, cost savings and overall financial growth in line with your objectives.

We committed to a pipeline of £2.5 M million for one of our customers, within a time span of 12 months. Within seven months, we had £500,000 worth of business due and a further £7.8 million ( 212% increase ) in the pipeline.

5. Don’t forget the opportunity costs

It is important to factor in the opportunity costs when you are doing your ROI calculation. What is the cost of doing nothing? This calculation is particularly important if you are in a high-growth market, or one that is experiencing exceptional demand due to market dynamics. By defining the market opportunity, you can identify the potential for revenue growth. Then ask yourself if your company can really afford to miss out on the benefits of outsourced sales.

6. Outsourcing sales can increase revenue without increasing overhead costs proportionally.

Let’s say the value of a 6-month sales outsourcing contract is £48,000. A common objection at this point can be, “That is the cost of two graduates for a year! Maybe I should consider that route.” 

And that could be a valid option for your sales department, so long as you take into account the recruitment and training costs, the time it will take your new hires to develop the skill-set they need, the time you will need to invest in monitoring and managing their performance and so the list goes on.

When considering sales outsourcing pricing remember that you are gaining access to a fully-fledged team, with a trained, experienced and talented outsourced sales team supported by the senior expertise, mentoring and guidance they need.

 Experience and studies confirm that the ROI achieved from internal teams is typically lower than an outsourced sales contract – so do your calculations and you will avoid falling into a common trap!

7. Invest time in the relationship with your sales outsourcing partner

Finally, remember that you need not go through the entire sales process above on your own. 

Find a potential sales outsourcing partner who is willing to help you weigh up the pros and cons of outsourcing and recommend an option that is tailored to your needs. This can be a great way of testing whether you are a good fit for each other culturally. 

And remember, your work does not end when you reach a sales outsourcing pricing agreement! Be willing to invest time in helping your sales outsourcing partner understand your business and give them the feedback they need to be successful.

Curious to know how much revenue an expert outsourced sales provider can generate for your business? Contact Pace today

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