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Buying Guide: Sales Outsourcing

By Duncan C. Client Engagement Manager at Company.com Corp.
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What is Sales Outsourcing?

You don't have to hire a whole bunch of sales people. Why not simply rent a sales department?

It might seem like a strange idea, to outsource your sales process, but there are benefits to doing just that.

Here's how it works—you outsource your company's sales function to a company who puts sales professionals in front of your target customers. That company manages lead generation, some will offer services to coach your existing sales team, or provide statistical analysis of conversion rates. Others will work for you like an in-house sales department, including all the hiring, firing, training and payroll. Many will do it for a fixed fee plus some kind of revenue-based payments. When the salespeople make sales, you get the customer, just as though the salesperson is directly employed by you.

Many small businesses are “started by engineers or by finance people, or they start a company because they brought over one big client from where they were—now they've got to get to the next level.” Said Tony Horwath, CEO at SalesFocusInc.com, in Woodbine, Md., and that's what an outsourced sales department can provide.

Just as you know that you need an attorney to give you legal advice, and you may have already contracted with an IT provider to help you with your company's technology needs, outsourcing your sales function can be a smart way to jumpstart your company's growth.

Usually you will pay a fixed monthly retainer for a sales team, and then you will pay extra for leads and closed sales, and anything else that generates revenue. It may cost more for feet on the street compared to inside sales or telemarketing. If your sales team works exclusively for you, that would cost you more than if the sales team represents you and some of your competitors.

There are so many basic services, with a seemingly endless number of add-on features, that the best way to compare is to figure out what your ideal solution would look like, and shop it around the providers you feel most comfortable with.

SalesFocusInc ask this question: Do you have the skill in your organization to develop, hire, train and manage a sales staff? If you're like most small-business owners, the answer is probably “No.”


Why to Outsource Your Sales Team

Let's imagine that you're the proprietor of a small business.  You do the finances, manage ordering and production, and do all the cold-calling to get customers. Things go well, and soon you have a handful of clients, all of which need to be managed and taken care of. So you do that, too. But while you're taking care of your new customers, who's making the sales calls? Soon enough you're back making cold-calls because there was nothing in the pipeline—and worse, there's no revenue until you convert new leads. You need someone to generate leads while you manage the leads that have converted to customers.

Macoem Business Solutions, a Montreal based sales outsourcing consultancy published a white paper in July 2007, which points out that “the worst acquisition a business can make is an expensive sales recruit who does not sell anything and leaves after six months, resulting in wasted time, effort investment, salary payment and recruitment fees.”

Hiring a talented sales staff is a gamble for many entrepreneurs. When you win, you're not sure what you did right, and you don't know how to do it consistently.

Outsourcing to a company whose only job is to make sales for you is a good way to make sure you win often.

Some companies provide turn-key sales solutions, and many offer assistance with everything from brand management to lead generation to hiring and training the sales team.

Tony Horwath, said, “Larger companies with very strong brands need to trust that the sales people will protect that brand, while smaller companies need someone to help them build that brand recognition.”


Scalability in Your Sales Force

The “best” way to approach customers is always changing.

It's not really so long ago that corporations paid salespeople to go door-to-door, selling everything from encyclopedia to washing machines and vacuum cleaners. In the new millennium there are hundreds of ways to spend your marketing dollars, from online pay per click advertizing to giant billboards, from word-of-mouth social networking to cold-calling through a phone directory.

If you don't know where or who your customers are, it doesn't matter how much you spend on sales—it will be hard to be successful. Hopefully you already have a good idea of where and who your customers are—you just need a little help getting your message to them, or persuading them that you're the best vendor for them. Describing the services offered by his company, SalesFocusInc, Tony Horwath said, “We actually can help our clients to craft their message to build their brand,” and added that, “Larger companies with very strong brands need to trust that the sales people will protect that brand, while smaller companies need someone to help them build that brand recognition.”

You should find a provider which matches your needs now, and has the flexibility to change as your company grows. “Our draw for small-businesses is scalability—the fact that you can increase or decrease the sales team as your business needs [change] is very attractive to small business owners.” Horwath said.

 
What to Look for in a Service Provider

If you run “sales management outsourcing” through your search engine, it will come back with about a quarter-billion results. SalesFocusInc, SalesSurge, WestBusinessServices, Macoem, AllinConsult, SalesForce—and page after page of others. So how do you differentiate between them?

The answer to that question depends on what you need. A company selling handmade jewelry will have very different marketing needs to a company whose core business is industrial machine parts. The first might benefit most from online social networking word-of-mouth, while that strategy wouldn't work for the second. Identifying the right route to market is something that your outsourced sales department can help you take care of.

Tony Horwath preaches learning about the services your outsource sales company provides, and matching them to your needs. “A lot of telemarketing companies have started using the term 'sales outsourcing' to do telemarketing. We have to be careful when we talk to people about what sales outsourcing really is. We're very tactical on our approach—our approach is revenue in the door for our clients.”

What to shop for depends entirely on your priorities. Are you concerned with adding customers at the expense of your brand, or do you want to protect your brand at the expense of adding customers? Those two things are not an either/or proposition. You can do both, but it's a delicate balancing act. And the Wallenda Family doesn't do sales outsourcing.

You should find a company that knows your product and your industry sector. Feel free to ask for testimonials. Call the Better Business Bureau and check credentials. Remember—this is the sales team that be representing your company, so treat it like any other hiring. No, scratch that. You need to take it much more seriously. This is the part of your company that generates income. If you make a bad hire now, it could have disastrous, even fatal, effects on your business.

If your business has a seasonal element to it, or if you're not sure how much of a sales push you need, you should consider the quality of the service relationship with your sales outsource vendor, and the level of flexibility you need in your agreement.

If you think you need to outsource your sales, Macoem offer this advice: “A sales team will always need attention and support to compliment regular ‘reporting’ to a manager or director. A sales team cannot be recruited, trained and left to ‘get on with it’. Sales resources can only be effectively outsourced with sufficient management input from the client.” Yes, even if you outsource your sales function, you still need to be involved. Would you hire a sales manager and just leave them to their own devices?
 
Ultimately, you will get what you pay for. If your needs are being met, that's great. If not, you need to know your vendor is responsive to any changes you need to make in order to achieve your goals.
 
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