10 Questions to Ask Before Choosing Your Sales Outsourcing Provider

What do you think of when you hear Sales Outsourcing?

Outsourcing is not a new trend in the market it’s been in existence since the 1950’s when companies would sell excess capacity on mainframes.  Now companies think about outsourcing not just activities but entire departments and the processes that are associated with those departments.  Business Process Outsourcing has become the outsourcing strategy many top companies have adopted over the past decade.

The market for outsourced services has grown to over $414B in 2001 with an annual growth rate expected to reach 15%.  Business Process Outsourcing is making up over half of all outsourcing dollars spent in the market.  Sales Outsourcing makes up approximately 10% of the total outsourcing revenue with a 30% annual growth rate!

More and more companies, both large and small are looking for outsourcing providers who can bring value by;

  • Reducing the “Cost of Sales”
  • Increase the Speed to Market
  • Improve the Productivity of the Existing Sales Force 
  • Reduce the Turnover Rate
  • Increase Client Acquisition and Satisfaction
  • Shorten the Sales Cycle

In studying some of the most productive sales teams in various industries, a core of key principles, beliefs, skills, and practices becomes apparent with those of the top tier. The best sales teams exhibit an energy, cohesiveness, and structure of process that allows them to dominate.  Here we will examine what choices and decisions you need to make in choosing your Sales Outsourcing provider so your company can focus on success.

  1. What is Sales Outsourcing?
    It is the transfer or development of sales resources, including all overhead expenses, such as recruiting, payroll, insurance, commissions management, equipment, training etc, including the management responsibilities to an outside organization.  The outside organization, the outsourcing provider, has the responsibility to manage the sales team to meet corporate expectations.
  2. How long has it been around?
    Outsourcing has been around for decades.  The evolution of the industry actually started as time-sharing on mainframes.  Then over the past decade IT Outsourcing has been prominent.  Over the past 5 years Business Process Outsourcing (BPO) has become the most effective method of outsourcing, which provides the greatest Return on Investment to clients.
  3. What is causing an increase in demand for Sales Outsourcing?
    “Sales Expertise” – Many organizations are launched by engineers, financial or operations type professionals.  They are able to grow a business to a certain level based on their expertise, but in order to achieve their next level of growth they need to look outside of the organization to find sales & marketing guidance and direction.“Tactical Revenue” – Sales Outsourcing solutions, which range from advisory services to outsourcing services, focus on developing Tactical Revenue Plans that will help companies achieve the next level of growth quickly.“Cost of Sales” – If an organization looks at the true cost of building, supporting and managing a sales force they would be surprised.  Many companies can’t tell you what the true “cost of sales” really is.  Sales Outsourcing offers clients a “fixed” cost of sales solution.“Speed to Market” – Another factor is time to market, it’s much quicker for an outsourcing provider to have a well trained and managed sales team out the door making and closing business than to organically grow a team.  Outsourcing providers are constantly recruiting and have Sales processes in place and can produce results with “feet on the street” in 45 days.
  4. How does a business owner know it’s time to look at sales outsourcing?If you currently don’t have a sales force in place and decide it’s time to grow or if a company has gone through too many Sales Managers and Sales Representatives with constant turnover and stagnate revenue.Or if an organization needs to roll out a new service or open a new territory, Sales Outsourcing solutions provide a much quicker solution.
  5. What are some of the indicators or reasons that suggest a company may need to look at Sales Outsourcing?
    • Stagnate Growth
    • High Turnover Rates
    • High loss Ratio
    • Low Margins
    • Speed to Market
    • Market Share
    • Require Flexibility in Sales Staff
  6. A buzzword in the industry is BPO?  What does that mean?
    BPO stands for Business Process Outsourcing.  With the evolution of outsourcing, companies have recognized a greater Return on Investment (ROI) if they outsource the entire responsibility of a department.  Unlike ITO (Information Technology Outsourcing) where a company would outsource desktops across the company, BPO includes outsourcing the desktops, but also the resources in that department and the management of that department.  It’s not just technology it’s the entire department.
  7. How large or small can a company be to implement BPO?
    Most small and mid sized companies require assistance in generating tactical revenue strategies.  Large organization, Fortune 500 companies, also need the speed and flexibility of sales outsourcing where they can launch a sales force in a new territory in less than 45 days then grow or shrink the resource pool based on the success or customer base.
  8. How do companies that are sold to react to sales by an outsourced group?  In a true Sales Outsourcing Model, Sales Agents only represent one client when they’re selling. Sales Outsourcing is a one-to-one relationship with Sales Agent to Client’s product or service, unlike a Manufacturers Rep that has a one-to-many relationship, whereby one Sales Agent will represent multiple products. The Sales Agents only carry the business card of the client and therefore the fact that they are an outsourced sales agent is transparent to the end user.
  9. What differentiates Sales Outsourcing companies?
    Sales Outsourcing is still a growing industry that is becoming more and more crowded with new competitors.  It’s important to verify that the organization has had success in the development and launch of several sales teams.  They should have a minimum of 3 years experience in growing companies.  The Sales Outsourcing provider should have expertise in the clients business, not just sales experience but should have a clear understanding of vertical industries and the knowledge of differentiating between selling products and services.If a technology services company needs to launch a sales team the Sales outsourcing organization needs to have a strong understanding of technology and solution based selling techniques before they can effectively build and launch a sales force.They must also possess strong sales organization development capabilities and have their sales processes well documented along with a solid launch process to get the team moving quickly.
  10. What are some of the services provided by Sales Outsourcing Companies
    Most organizations will launch sales teams, however, quality companies will guide their clients through the development process, so after the sales outsourcing engagement the client has the processes and knowledge to continue managing the sales force independently.Building, Training and Managing the Sales Force for immediately revenue requirements and to build a strong company for the future should be the focus for all Sales Outsourcing Companies.

 

Conclusion

Given these essential requirements for success, what benefits should the business owner expect?

In today’s super competitive environment, building a successful sales force depends on a partnership mentality between the company and the provider.

The Business Owner should expect;

  • Rapid Market Share Acquisition
  • Exclusive Representation of Product or Service
  • Fixed Cost of Sales
  • Flexibility of Sales Staff
  • Industry Knowledge
  • Manageable Service Level Agreements
  • Quality Sales Professionals
  • Documented Sales Processes
  • Predictable Forecasting Tools

On the other side of the table, the employer has a responsibility to provide the tools and support necessary to give a motivated and talented sales team the means to turn their hard work into results.  

There are many alternative solutions in the market today.  Companies have options available to them that weren’t available over the last two years.  

The common denominator among successful companies is that they are process-driven and always FOCUSED ON SUCCESS!