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DON’T Outsource Your Sales. Its Too Expensive!

DON’T Outsource Your Sales. This is the most popular argument we are presented with when speaking to heads of companies. It’s not unreasonable either; fees for outsource firms range in the thousands of dollars per month.

Companies that have never used these kinds of services, or haven’t for a long time believe it will cost them a fortune, and that an in-house team will be less expensive with greater control.

“DON’T Outsource Your Sales?” Let’s Challenge This Assumption

The reality is quite the opposite. According to most surveys, cost savings is the primary reason for outsourcing. Especially as the TRUE, unforeseen cost of running an in-house sales development unit is often only realised when it’s too late.

Interesting data from leading job sites like Glassdoor and Indeed suggest the average Sales Development Reps (SDR) base salary ranges from $50K to $65K. With a lead generation specialist  fetching $64K

This is in line with data from Payscale’s Average Business Development Representative Salary in Australia report which also reports On-Target Earnings (OTE) inclusive of commissions/bonuses of $85,076K.

None of these costs usually factor in software, hardware, or other typical overhead — often 25% of salary. And the least factored part of in-sourcing is the allocation of management time, money, and resources. Figures, all-inclusive of these hidden costs, can easily run into the six figures.

annual expenses for in-house sales development graph

It gets worse… In 2018, the SDR position largely serves as a short-term launchpad of a sales career (or brief foray into the land of rejection in a job many cannot handle).

If you’re hiring phone sales staff, then the average hire comes with less than 12 months genuine experience and has an average tenure of under 15 months (including ramp time). It’s rare to find organisations allocating human resources costs for the endless treadmill of hire, train, and retain required for insourcing.

In other words, companies spend 26% of their time on training, which takes a manager’s time and efforts resulting in positive productivity for less than a year..

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Here’s one more thing to analyse, when you consider sales outsourcing. Along with cutting costs, companies usually try to estimate qualitative ROI using the following criteria:

  • – Freeing the time of your in-house employees (usually sales account execs)
  • – Improvement of analysis and planning (consistent opportunity creation)
  • – Acquisition of knowledge and experience
  • – Strategic value (building pipeline)
  • – Innovation

Basically, employees with less than a year of experience shouldn’t be expected to bring innovation and strategy to your company. Their first year on the job focuses on learning.

Insourcing comes with a multitude of costs, most of them hidden. Outsourcing, on the other hand might appear expensive, but costs will always be obvious and the companies are usually better equipped to deliver a successful outcome, and a better ROI. Be sure to run a thorough either/or analysis before drawing conclusions on which is truly most expensive.

Evolved Contact provides companies with dynamic outsource pricing to ensure you always get the best service for your needs, and never pay for costs you shouldn’t need to. DON’T outsource your sales to overseas providers. Speak to us.

References & Resources – PayScale, Indeed, Glassdoor, Hubspot, Saleshacker