Evan Lamolinara Building top of the sales funnel: In-House or Outsourced
Every small and mid-sized business cares about one thing: a consistent flow of sales. Every time you close a new customer, your company drives revenue, fueling your company’s growth and expansion. After each close, management asks itself, “How do we find our next best customer?”
What does a Sales Funnel need to Survive?
It goes without saying that a sales funnel needs high-quality sales leads. But those who put those leads into the funnel are your sales hunters or SDRs that are skilled at industrial prospecting and cold-calling strategies. However, that’s still not enough to feed the sales funnel in today’s economic environment. You will need to add precision targeted data, training, technology, sales automation, and those that are experienced or certified to use these tools.
The Cost of Building the process
Now it’s time to put some numbers to the tools and people needed to fill the sales funnel. This is separate from the cost of marketing and their programs. How many hunters or SDRs do you need and what is the consistent time commitment they will perform outbound calling efforts week after week? In addition to calling, if the hunters or SDRs are to manage the deals, quoting, or sales admin-oriented tasks, you know the number of outbound calls will go in cycles. What will that do to the sales funnel?
So the decision must be made: Do you hire a dedicated in-house hunter team or do you outsource the efforts to a company that specializes in the field?
Building the In-House hunter team
Let’s discuss the costs associated with building an in-house team of sales hunters or SDRs.
Finding the Right Talent – In a low or high unemployment rate, finding the right talent is like finding a needle in a haystack. Now add the need for experience in the industrial or manufacturing environment, and you’ve narrowed your talent pool to very low numbers. If you use a staffing agency to help place new talent, you can expect to pay 10-20% of the SDRs annualized salary, typically $5-15K. That’s always a cost most forget to include.
Salary, Benefits & Commissions – Let’s say you found a few to fill these positions. Add the salary, benefits, and negotiated commissions, and work from home, you have a bit of a hefty bill to pay every two weeks. Let’s not forget, they will need training and software in order to do their job. That’s always a cost most forget to include.
Software Tools – It is worth mentioning software as its own line item. To effectively hunt and communicate with prospects, you need a CRM. There are many choices in the market, everything from free to $15k for the year. Let’s not forget our favorite social media tool for professionals, LinkedIn. You can use the ‘free’ version, but most want to use Sales Navigator, which includes another $1k for each person on your team. These are the main software tools, but if you use a bulk email sender or other tools, those are cost factors as well.
List Development – It’s imperative that before you get your hunters or SDRs on the job, they will need clean, quality lists. These lists will need to contain the right level of contact, with title, email, and most importantly, cell phone numbers. Everyone works from home…right? Every time the hunter or SDR makes a call and the person is no longer there or the phone number doesn’t work, that just costs you money.
So now you need to get a list that is high quality for your new rep. Do you know where to go? Have you used that list before? What was the quality? These questions are imperative to understanding the cost of purchasing a new list, and the cost of using an old list.
Acquiring quality new data can range from less than $1k to tens of thousands of dollars.
Outsource: The caution first
Let’s first address the caution. Not all outsource lead generation companies are the same. Time, effort, and discussions need to happen in order to know if you have the right company. Many outsourced business development agencies specialize in specific verticals, like software, financial, or manufacturing. First, do they have the right industry experience for you? Just don’t take ‘yes’ for an answer, get a reference or two…and call.
Next, understand their process. The more transparent, and the more they prove their process by ‘doing’ the more you’ll gain confidence in their ability to deliver pipeline. Again, calling a couple of references and asking their right questions will help reveal their true experience.
Finally, the Terms of the Agreement. Are they asking you to sign a contract for the next year for over $15k per month? Or do they have smaller, more flexible packages that allow you to “dip your toe in the water” while mitigating risk if KPIs and deliverables are not met? Yes, these terms do exist.
Outsource: The Benefits
Now that some of the common pitfalls are out of the way as you know what you need to do to validate them, let’s get to some of the benefits.
- Streamline sales efforts and time. Now, it is always good to have a portion of the sales rep’s time on their own calling efforts, but outsourcing will allow their time to be more productive as they are working on identified and qualified deals.
- Internal bandwidth. While there is typically an initial onboarding process with outsourced business development agencies, over the long term you have the option to determine how involved you want to be in your program. However, you don’t have to worry about the day-to-day management, oversight, and training of SDRs. Any reputable outsourced sales agency will have developed a basic understanding of your current and future initiatives and will assist you in anticipating and implementing any changes to your program seamlessly, with minimal attention required from you.
- While you’ll get more inexperienced talent that may or may not stay for more than a year, you have no worries. Outsourcing companies take that responsibility off your shoulders. In addition, good outsourcing companies retain their talent for the long term as they have a better understanding of what the job takes to be successful and accommodates accordingly.
- Eliminate the highs and lows with a steady stream of qualified sales leads ready to enter the funnel. When done right, the outsourcing company knows your perfect customer and targets those with the right pitch to get them to move today, or be nurtured and move forward for future sales.
What’s the Next Step?
Decide which direction is best for you, and how much or little you want to outsource. A good outsourcing company will help you through that process. Those good ones are in it to win it. So grabbing too much business may mean short-term dollars. Those that work and communicate effectively will be around for the long term.
Learn more about outsourcing with SalesLeads’ Prospecting Services.
About the Author:
Evan Lamolinara is president of SalesLeads, Inc., a company that has been around for over 60 years, generating high-quality sales leads dedicated to sales & marketing professionals in the industrial marketplace. Mr. Lamolinara, an entrepreneur and competitor, purchased the legacy company in 2014. Since then, he’s redeveloped its core software delivery platform and grown the company by over 400%. Evan graduated from Mount Union College with B.A. Business Management and honed his competitive skills as a three-year letterman on the College football team.
