Skip to content
Growth Hub
Sales

Sales Outsourcing – Transforming Your Business Model for Growth

Sales Outsourcing – Transforming Your Business Model for Growth

Key Takeaways

Sales is vital to a company’s survival and growth. 

However, as the B2B buying process goes digital in a massive way, it has also become an area of complexity. 

The easy availability of quality information through digital channels has made it unchallenging for buyers to gather information independently. 

But at the same time, the set of options and solutions that buyers have on offer are also expanding. These factors have made it harder for sellers to influence a buyer’s mind. 

In a Gartner survey, more than three-quarters of the customers described their purchase as very complex or challenging. 

Such complexity stands as a formidable barrier to sales organizations, especially startups and expanding ventures who find the opportunity costs of building or scaling their sales efforts too high. 

While building sales teams and resources from the ground up can be a costly affair, organizations can leverage their existing resources through sales outsourcing. 

Without much ado, let’s look at: 

  • Why and how does outsourcing sales can work in your favor? 

  • Which specific business functions should you consider outsourcing?

3 important reasons to outsource sales

#1. Cost efficiency

For startups or companies on a growth trajectory, widening the difference between the top line and the bottom line is critical. 

Hence, such companies must strike the right balance between maximizing their sales revenue and minimizing investments into their sales activities. 

Building in-house sales resources from the bottom up involve costs of hiring and remunerating sales teams, purchasing sales technologies, as well as incurring management costs. 

Outsourcing sales can bring in cost efficiency by augmenting sales capabilities at fixed and affordable costs. 

#2. Lack of expertise

In-house sales teams may often lack familiarity or expertise in dealing with dynamic markets. This lack of knowledge can prove costly when organizations need to ramp up their sales efforts. 

Hiring the necessary talent or training existing reps in such situations can involve time and resource costs that companies cannot afford. 

Sales outsourcing companies can provide access to top-tier talent with the necessary experience and skills. 

#3. Scalability

Companies that are in a rapid growth phase must always be careful that they are not growing at a pace faster than what their sales teams can manage. 

Rapid growth can be disastrous leading to significant drops in customer experience. 

However, outsourcing sales operations in the growth phases can help cut down the risks of expansion and growth by immediately augmenting capabilities without adding on headcount. 

Now that we have seen three compelling reasons to outsource your sales operations, let’s look at which business functions you should consider outsourcing. 

The top 5 sales functions to outsource

#1. Lead generation

Lead generation is the process of identifying potential business opportunities and developing early interest. 

It is a top-of-the-funnel activity aimed at generating marketing-qualified leads. 

This may involve email, social media, event marketing, pay-per-click advertising, and content marketing. 

Lead generation is the bedrock of the sales process as sales conversations can quickly go awry if not conducted with relevant leads. 

Lead generation helps companies narrow down and focus their sales activity on a few quality leads instead of spreading themselves thin across too many unsatisfactory prospects. 

It requires a clear understanding of the ideal customer profile, identifying the right sales triggers, and determining the most effective lead attributes. 

According to a study, 62% of B2B professionals believe that generating increased lead volume is a top priority for them. 

As a specialized, time-consuming, and labor-intensive activity, lead generation is well suited for outsourcing as it provides sales organizations with: 

  • Dedicated technologies 

  • Specialized and experienced team members 

  • Quality and relevant leads

#2. Appointment-setting

This is the process of getting the sales team through the door to deliver the pitch and finalize the deal. 

While lead generation focuses on the top of the funnel, appointment-setting focuses on the middle of the funnel, converting leads to prospects. 

It involves working on warm leads to identify and contact decision-makers and schedule meetings with sales reps. 

While appointment setting is the first step in making a sale, studies show that this is an activity most sales reps struggle with. 

Companies specializing in appointment setting services have advanced techniques, highly experienced staff, and the right technology tools to generate high-quality appointments. 

They utilize particular skills for identifying and contacting decision-makers, qualifying prospects, and setting sales appointments. 

Such expertise is crucial as first-touch interactions with potential customers set the tone for the rest of the steps in the sales cycle and the buyer’s experience. 

#3. Sales execution

In some cases, outsourced services may include sales execution or closing the deal by partner account executives. 

At first glance, this may seem like an excessive ceding of control over the sales process to outsourced partners but there are contexts in which it can prove to be useful. 

When a company expands into a new geography or market, its in-house sales teams may not possess sufficient knowledge of the cultural and behavioral particularities of the new ecosystem. 

In such cases, it is wise to contract out for local or domain expertise to help make the sale. 

Similarly, new products or services can call for shifts in sales strategies to which the in-house teams may not adapt quickly. 

Rather than losing out on costly opportunities while waiting for teams to train and catch up, specialized sales execution vendors can become extensions of the organization and carry out sales on its behalf. 

#4. Pipeline management

Pipeline management involves developing visibility into the sales pipeline to optimize and restructure sales processes for efficiency and effectiveness. 

The process allows organizations to prevent sales cycle sprawl, remove bottlenecks, and prevent deals from stalling at different stages. 

According to the infographic below from Vantage Point, effective pipeline management can increase revenue growth by 15%. Yet, most organizations struggle with this vital task. 

 Effective Sales Pipeline Coaching Pays Off

Effective outsourced partners come with proven methodologies, tested strategies, trained sales reps, and quality data and analytics, allowing companies to keep a clear view of the sales pipeline and constantly update and develop their strategies and methods. 

#5. Renewals management

Thanks to the rise of the subscription economy, sales is no longer a one-time activity in which customers are held hostage by the high fees of switching products. 

Today, retention is the lifeblood of many companies, fuelling a significant proportion of revenues. In a recent survey by Regalix, 77% of the respondents said that over 40% of revenue was generated from product renewals or service retention. 

As per this article on customer success team planning and cost benchmarks, outsourcing renewals allow companies to reduce the burden of costs of in-house customer service teams which can drain between 5-20% of ARR. 

Performance-based outsourcing models also incentivize partners to improve on-time renewal rates thus improving the cash flow of organizations. 

Finally, a limited in-house team may be forced to focus only on high-value customer segments and forgo the long tail of lower-value customer segments that can contribute significantly to revenues. 

Outsourcing can overcome this scalability problem. 

Bottom line & takeaways

While sales remain a crucial business function for any organization, rapidly shifting market conditions and growing customer expectations make it difficult for companies to keep pace and sustain their sales efforts. 

The benefits of outsourcing sales operations are umpteen as it offers a low-risk, cost-effective way to rapidly augment capacities without straining the company budget or overburdening in-house talent, and resources. 

This allows the organization’s existing teams to specialize in the most strategic and vital activities that would enable it to grow and scale to new levels of success. 

If companies choose their outsourced partners wisely and structure their outsourced sales programs effectively, they are sure to crush their quotas and achieve their sales goals. 

On this Page