Updated: Feb 10, 2020
Outsourcing can be a great way for Startups to improve their sales. However, there are also a lot of pitfalls associated with outsourcing sales which might deter businesses from trying it out. Should we then proceed with outsourcing anyway despite this? The answer is yes and here is why:
Outsourcing sales is an amazing way for Startups to gain access to efficient sales professionals without going through the arduous task of hiring and training their own. It teaches valuable lessons in cooperation and thinking outside the box. It also helps companies become more flexible and can even save time and money in the long run.
This article will look at several key reasons as to why outsourcing sales is a great idea for Startups and will address the most common objections as well. Towards the end, we will feature a section that explains how we, the PGN, are a great outsourcing option for Startups.
Reasons for outsourcing sales for Startups
Without further ado, let us get started with the reasons why you should consider outsourcing sales for Startups. These reasons are inspired by Diego Pineda's list on cloudtask.com and we consider them to be excellent points.
#1 - Outsourcing sales can save money
The average tenure of a sales rep is 15 months. After that, they need to be replaced. Replacing a sales rep can cost close to $100,000 on average. Furthermore, if you want to maintain an in-house sales team, it can annually cost you over $400,000. That is not a small amount of money.
Many people think that outsourcing will make them spend more for the same thing, but consider the following: working with a managed service company that will provide you with sales reps will cost you around $60,000 a year. That is a significantly lower amount of money and will give you very similar results (sometimes better).
Furthermore, sales teams also need tools to aid them in their work. By outsourcing this work, you will not have to worry about licensing and implementing these tools as they will be included in the deal.
When you look at things this way it seems to be a no brainer: outsourcing sales saves money.
#2 - Outsourcing sales can save time
Hiring sales reps takes time. You not only need to find candidates but also interview them and make sure that they are the right people for the job. When you take into account all the steps of the hiring process, you come close to spending around 1200 hours per year hiring sales reps. On top of that, once you do hire a sales rep, you will usually spend around three months training them, only to have them leave relatively soon anyway (remember, a sales rep's average tenure is 15 months). That means you will have to go through the whole arduous process almost every year.
Meanwhile outsourcing your sales team to another company would take the pressure off of you to handle this process and would supply you with just the right reps.
#3 - Outsourcing sales can compensate for your weaknesses
None of us as an infinite supply of resources, knowledge, and strengths. We are likely to be lacking in some areas. Maybe you lack expertise or experience in particular sales functions, or maybe you are introducing a new product which demands sales skills you have not tried so far. You could also be entering a new country or market segment and thus have the need for quick adaptation.
You could, of course, take your sweet time and waste resources on trial and error until you succeed or fail, or you could outsource your sales and start profiting right away. The choice is yours.
#4 - Outsourcing sales can deliver much better results
Outsourcing sales can be approximately 40% more efficient than using your in-house team to generate leads. This is because managed service companies generally have more expertise, sometimes to the point that they can be twice as effective when it comes to time than your own in-house sales team.
Ipswitch, for example, achieved a 5.2X positive ROI on their overall spending by working with an outsourced sales them which also solved their problem of lacking manpower.
This is only one such example of many. This shows us that outsourcing is not only good when it comes to saving time and money, but is also great in terms of delivering better overall results.
#5 - Outsourcing sales allows you to reach people through different channels
An in-house sales team can often be overworked and simply not have the time to cover all the different channels through which you can reach people. Nowadays sales are not only done in person or over the phone, but also through things such as email, social networks, and live chat.
Live chat, in particular, is an amazing but underused tool because it allows your team to quickly interact with leads while they are right there on your website. This quick response (within five minutes) is essential and can substantially increase the number of sales you end up making.
If your in-house sales team cannot cover all of these fronts, then it is much better to consider outsourcing your sales to a managed service company and have them do all of the dirty work for you.
Objections against outsourcing sales for Startups
To be balanced, we have decided to also include some objections to outsourcing sales for Startups. These are taken from another one of Diego Pineda's outstanding articles, this one on medium.com. The way we will cover the objections is to give you a general idea at to what they are about and then tell you why they turn out not to be valid after all.
1 - You are used to doing everything in-house
This is a fair point. If you have conducted your business successfully so far with an in-house team then there is little reason to think that you should consider outsourcing. However, you should always keep in mind, as we have already mentioned, that outsourcing sales can often save you time and money even if you think that your in-house team has everything covered.
What is more, this is not an either-or situation. You can keep your in-house team while outsourcing part of your sales and using the managed service company as an extension to help you scale.
2 - Your product is too complex
The reasoning behind this objection is that a salesperson needs to know all the technical ins and outs of a piece of software or machinery to effectively sell it. This is simply not true, as what a good salesperson will focus on is not the technicalities, but rather the way a particular product can benefit the client.
Furthermore, the outsourced salesperson can set up interviews with your in-house experts if necessary in order to provide the client with technical info. In this way, you only deal with the qualified leads while the managed service company you outsourced your sales to deals with the rest.
3 - You think they will not deliver the results you need
If you have been relying on your in-house sales team and consider them to be quite good at what they do, it is understandable that you would not want to delegate that over to someone else. However, it is important to keep in mind that there are managed service companies out there who have access to the latest knowledge and equipment which may even escape your experts.
By outsourcing your sales to these able and dedicated people, you will make sure that your company marches lockstep with the most developed and up-to-date organizations (perhaps even overtakes them).
4 - You want your managers to be on hand to manage
It seems to make sense that if we outsource our sales team to another company, we will have less control over the whole process. But this need not necessarily be the case. If you take care to establish proper communication between you and the managed service company to whom you are outsourcing your sales, your management can still quite easily keep track of what is going on.
For example, they can use services like Hubstaff to monitor the work of the outsourced team. With the proper systems set up and regular meetings, your management should still feel like they have supervision over the sales process.
5 - You have outsourced before and were not satisfied with the service
Understandably, a bad experience with something would make us reluctant to try it again, but consider this: just because you once went out with a person and had a horrible time does not mean that there is nobody in the world who could properly love you. Likewise, even if you have had a bad experience with outsourcing before, there are plenty of managed service companies out there that would probably work wonders for you.
This is an opportunity for you to analyze what exactly went wrong that time you had a bad experience and take steps to try and prevent it in the future.
How the PGN can help
If our article has made you consider outsourcing sales as a good option for Startups, then we would also like to point out that we at the PGN (Produs™ Global Growth Network) can help you with this.
We excel at connecting innovative technology with potential business buyers. We offer services to both producers and buyers and bring innovative tech solutions to those who need them. This is why we are an ideal option for a Startup looking to outsource their sales.
So if you are a company looking for a good opportunity to outsource your sales and enjoy all of the amazing benefits that bring, do not hesitate to contact us.
And there you have it. We have given you an overview of both reasons for why outsourcing sales for Startups is good and objections to doing that. We have clarified that all the objections fall short when one realistically considers the situation and hopefully convinced you that outsourcing is very much worth it in terms of both time and money.
Whatever the case may be, we hope that we have shed light on the situation and helped you make a more informed decision when it comes to handling the sales portion of your company. If you have indeed decided that outsourcing is for you, then we at the PGN will be more than happy to work with you. Otherwise, best of luck.