Outsourcing has become a significant theme for small, medium, and large companies today. Companies’ outsourcing of business processes usually borders on the area of expertise, cost comparisons, and market dynamics. These dynamics have led to a steady increase in the global outsourcing market.
Outsourcing the sales department involves contracting a third party to take on a sales quota. The process can either be full outsourcing or partial outsourcing based on the set plan. The sales outsourcing company takes on the responsibility of hiring and training a sales team. They then proceed to act as an extension of your company in relating directly with your customers.
Outsourcing is a way to bring in some dynamism. It allows you to test different concepts and ideas. Are you set to plunge into the outsourcing market for expertise and manpower?
Here are a few things to consider before proceeding to hire a sales outsourcing service.
Factors to Consider Before Outsourcing Sales
Before bringing in a third-party sales team, it is important to have clarity of purpose for the outsourcing operation. The following are factors to be considered by sales leaders before hiring a sales outsourcing service.
1. The Vision of the Company
The agency you decide to bring in as a third-party sales team must understand and be ready to represent the values of the company. The vision of a company speaks about its purpose for existence. You should consider the following:
- Will the external sales service team represent the full interest of my company?
- Have they learned our policies to give us the best representation before our customers?
Your outsourced sales support should agree to the terms and the ideology of your company being expressly communicated. This team will be in direct contact with your customers. Therefore, it is essential that you get the best representation possible.
2. Area of Expertise
Expertise is a factor to consider before outsourcing sales. Research the sales outsourcing company’s area of expertise and work experience in handling other companies’ business projects.
The decision to delegate sales to a third-party company emanates from your estimations as to whether such a project can be executed internally. You should know if there is a need to outsource the sales project for more expertise in handling.
You can check for reviews and ask for previous work experience. Do so before linking up your business with a sales outsourcing service.
There are three types of expertise to consider:
i. Level of Expertise for SME Businesses
Small and medium scale businesses might be great at producing good products and services but lack the expertise to market products well enough to convert to a positive sales margin. Expertise level is a factor to be considered when deciding on hiring an outsourced sales force team for your business.
ii. Type of Expertise Needed for New Markets
Companies try to break into new markets beyond their present geography from time to time. They sometimes need to contract a sales outsourcing service to enter an international market, for instance. They might be faced with challenges such as language barriers, and non-familiarity with the technical nuances of the geography. Engaging a sales outsourcing company with experience in dealing with international markets can help cover up for the business’s shortcomings.
iii. The Need for Sales Specialist Experts
This level is for companies who already have an internal sales team but are not too impressed with sales results. You might feel the need to bring in sales specialist experts to work with your internal team on a contractual basis to develop strategies or pass on key information on demographics, etc. In the long run, the company’s team might be able to evolve their process and rake in better results.
Sales specialists are brought in to focus on a specific task – the key part of the project in need of a better performance metric. They develop CRM and generate quality leads that can convert to sales. They can induce new motivation and help improve the performance level of your internal team.
3. Cost Comparison for Outsourcing Sales Development
The hiring and training of an internal sales team can be an expensive expenditure. For SMEs, the cost of assembling and retaining an employee list can prove pricey. Unless the business can avoid such expenditure regularly. If not, outsourcing might be the way to go.
A company in need of rapid lead generation can bring in an experienced third party to manage the sales development on their account. This strategy is useful if you have new products or seek to break into new markets.
Factoring sales development outsourcing into your budget should not be done in haste. But, the truth is you would have more expertise while cutting costs in comparison to having to hire and remunerate an internal sales team.
4. The Type of Business Sales Model
The sales model of the host company is an important fixture in deciding whether to outsource sales to a third-party company. The two kinds of business sales models where outsourcing can be useful are:
- B2B sales company
- B2C sales company
i. B2B Sales Company
B2B means business-to-business sales. This situation is when a business buys merchandise from another business.
For example, a tire manufacturing company sells tires to a car manufacturer. When dealing with B2B outsourced sales, it may require expertise to sell product ideas and close contracts for interested buyers.
In B2B, the terms of negotiation are sometimes based on contractual agreements. It is different from selling to an end-user (individual customer) and requires expertise. A business can contract a third-party sales team to handle a large volume of sales transactions between themselves and another business venture.
ii. B2C Sales Company
B2C means business-to-customer sales. It involves selling to the end-user. It might not require as much technicality, just the experience of selling. However, an outsourced sales specialist team can be brought in to carry out market research operations.
The sales agency will aid your company to scale up results faster.
5. Ease of Communication Channels for International Clients
Another factor to consider in outsourcing revolves around the international market for a company that seeks to expand into different markets. The manpower, resources, and expertise may not be available at the time, especially upon sudden demand for your products and services from other regions.
For example, a company in the USA that has a growing customer base in Asia can decide on outsourcing sales to an agency that has experience in dealing with Asian customers.
It will allow for faster channels of communication between client and company. Outsourcing international sales breaks the limitations on timezones.
6. Ability to Keep to Deadlines While Delivering Efficiently
All businesses thrive on time and efficiency. It is better not to hire any sales agency that cannot guarantee meeting deadlines. Therefore, you must research the agency’s background and antecedence.
Deadlines may involve:
- Rounding off a sales quota
- Submitting a sales report
- Analysis of sales operation over a stated period
Cost-saving is only as effective as the deadlines being kept. Seek to understand if your outsourced sales force has backup plans in the case that they miss a deadline.
7. Ability to Work Under Minimal Supervision
Trusting your outsourced sales force is a prerequisite for a good partnership. You must be able to ascertain the agency’s credibility in handling your company’s sales profile.
Once it is ascertained, you’d have enough time on your hands to engage other facets of your business. Your outsourced sales service should be able to function without much supervision.
8. Customer Protection and Data Privacy
Data privacy is one of the biggest concerns in today’s business world. Companies are taxed by law and consumer protection acts to prevent diverging customer data privacy.
A leak in the customer database can cause harm to your business. Customers will lose trust in your business, making you lose credence and get negative publicity.
Therefore, your customer’s information must be protected as you share sensitive information with a third-party agency. Check to ensure your outsourcing partners keep up with industry standards and regulations on privacy.
9. Terms of Contractual Agreement
The terms of the contract should be documented in writing. It is the conditions that legally bind a particular sales trade and the parties involved.
You must see to that before you hire a sales agency to handle sales on behalf of your brand. The terms of the agreement must be well understood and they must be documented on a legally binding contract.
Outsourcing sales has some elements of risk. After all, the third party will be in direct contact with your customer base. However, with proper documentation, you should be fine.
A contractual agreement improves the trustworthiness required for the partnership to work.
Questions like ‘Who leads the team?’ and ‘What sales tactics to deploy?’ must be included in the contract. The contract is settled once the terms of the agreement are well spelled out.
You can hire a lawyer for this purpose. It will help you avoid ambiguity as the quality of service you’d be getting will be spelled out.
The global outsourcing market has grown in leaps and bounds over the years. Companies use it to bring experts to boost their sales network. It is also a cheaper alternative to hiring and maintaining an internal staff. With outsourced sales comes innovation. You get to bring in people with new ideas that can evolve your business process.