Should You Outsource Your Inside Sales?
Sales are the life blood of a company. Without sales, there is no revenue, and without revenue nobody gets paid. When it comes to B2B high technology companies, the sales process is often complex and lengthy, particularly for combined services and high-value orders. It would make sense, therefore, that the individuals responsible for ensuring that there is a steady sales pipeline of well-qualified leads are at the heart of the company where they can develop and maintain their knowledge and core competences.
When it comes to quota-carrying inside sales teams, the feelings run even deeper and stronger: surely sales is the absolute life-blood of any company? Historically, therefore, Inside Sales has always been considered a core competence that must be kept in-house. Surely no-one would outsource Inside sales to a specialist outside agency, right? Well, that depends…
Many articles and blogs have been written about whether or not to outsource the inside sales team (or elements of it) and many companies are coming to realise that the sales process is not necessarily a core competence. The argument for outsourcing inside sales depends on a number of factors, including:
- The complexity of the product or service
- The value : volume ratio of the [inside] sales mix and the nature of the sales cycle
- The target audience (in particular their level of requirement for customisation of the sales process, and their need for in-depth technical reassurance).
- The culture of the vendor company (techy or salesy?)
Particularly in the technology sector, there can be concerns about the ability of an outsourced team to understand sophisticated product knowledge. If an inside sales agent must deal with a tech-savvy audience that may ask detailed questions, vendors worry about putting inexperienced agents on the spot. However, a number of IT Vendors are coming to the conclusion that current sales-processes are too tech-heavy, and as a result they are not cost effective. Too much time is spent on discussing technology, and not enough focus is put on progressing the sales cycle in a cost-effective way. This is where an outsourced inside sales agency can help. The sales cycle is their core-competence, and they can help technology vendors increase sales productivity.
Let’s take a closer look at some of the key influencing factors:
New technology is always complex and expensive to sell and implement, but it is in the nature of the IT industry that products become commoditised over time. As products become commoditised the distribution channel shifts from direct sales to volume distributors, initially via VARs, but ultimately direct to the public. For many products then, it should be recognised that, ultimately, inside sales always ends up being outsourced.
The value : volume ratio and the shifting nature of the sales cycle
There is always a stage in the product lifecycle where dedicated enterprise field-sales is too expensive and commoditised, vendor-neutral distribution is ineffective. This is the ideal time to consider outsourcing your inside sales and channel sales functions. The product still needs both dedicated technical and sales expertise, but outsourcing accelerates the shift to a more cost-effective sales culture, where the focus on sales targets is equal to the focus on expert service. At this stage in the product lifecycle, the target audience tends to become more comfortable buying over the phone, at least for the front-end of the sales cycle, although they may still require face-to-face contact with field sales or a reseller before committing themselves to large expenditures.
The Target Audience
Whilst the target audience becomes more comfortable buying over the phone as a product matures, there is a risk that insourced inside-sales functions can remain trapped in an enterprise mentality which continues to support the view that their product requires high-end experts. This is an expensive sales disadvantage when the end-user marketplace has started to become comfortable with buying the products as a semi-commoditised solution component. Symptoms of this stage are that field sales are still too involved in accounts that should be tele-serviced, or that channel sales are not meeting expectations because the channel feel there’s too much direct competition. This is the time to consider outsourcing inside sales to a specialist agency.
The company culture
Many technology vendors have a culture which (quite rightly) is proud of their technology. This can lead to tech-heavy sales cycles and in-depth meetings and conversations which are not strictly necessary to progress the sale. Outsourcing inside sales to get a specialist sales and marketing outfit is often a good way to help shift focus towards the commercial aspects of the sales cycle. Outsourcing inside sales also helps to clean up lines of communication, and make sales processes more efficient. Once best practices have been re-vamped, outsourced operations are often re-insourced (post the cultural shift) to get the best of both worlds.
Outsourcing inside sales can indeed be extremely effective, but it requires a number of key ingredients in order to be successful:
The outsourced team must be of the highest calibre, fully trained with the latest best practice techniques and conversant in the company’s products and services. Good quality selling has always relied on more of a consultative approach than simply force feeding an opportunity; this is no different for an outsourced team. Any agency engaged should be able to demonstrate the calibre of its team, the training they have undergone and the specific experience of the individuals on board, that way you can rest assured that you are dealing with individuals equipped to manage your audience. The good news is that specialist agencies now exist that can deliver this calibre of service.
Invest in Expertise
There is little point engaging an outsourced agency if they are to be kept at arm’s length from the core strategy. In order for any outsourced inside sales team to be effective, they must be part of the ‘inner circle’ and treated as strategic partners. This way, they can truly be on board with the bigger picture and buy into your longer term strategy, particularly important when representing your messages and positioning with senior executive prospects. This can be surprisingly cost-effective. After the initial training, training sessions can often be reduced to a few hours each month or a day each quarter. This can often be both cheaper and more effective than in-house training because the discipline of regular training slots is inexpensive and encourages regular updates to be remembered and taken seriously. You no longer have to bother with induction training for new staff, as any decent agency should build a “train-the-trainer” knowledge-base which allows them to repeat the training you deliver. This combination of lower cost and higher effectiveness is driven by the outsourcing process, because it encourages clarity, discipline through more formal communication and demarcated areas of responsibility. A great example of this is in the area of quality. If the inside sales team are selling jointly with a field sales head or a channel partner, the feedback on appointment quality tends to be more forthcoming, more hard-hitting and more quickly assimilated by an outsourced operation, whose client relationship depends on fixing any issues.
Obviously it is important to differentiate between basic telemarketing and more sophisticated, professional outsourced inside sales agencies. In a fully outsourced model, agents should be experienced, credible, and knowledgeable about the ICT industry in general, as well as being adept at ferreting out the decision maker inside the target organisation. With the right agency, it should be possible to agree an ideal customer profile target list or a named account list you have developed together and then give them the freedom to manage and deliver pipeline as they see fit, in order to encourage the best and most cost-effective behaviours. Whether you need a steady flow of appointments for your field sales and resellers, or a fully independent, quota-carrying inside sales function, the market has developed to the point where it is not only possible, but in fact desirable and advantageous to outsource your inside sales.