We continue to get a fair number of companies asking for our perspective on outsourcing the sales function and whether we are talking about independent reps or outsourced call centers, our answer remains the same and it is based upon experience. It make sense if:
Your product is well known – If the market knows your product and will be asking the reps for your product, there is a higher chance of success since the reps don’t know your product that well, they tend to sell what is being asked for, particularly in the case of reps that carry other products.
Your product is not complex – When a product requires strong domain knowledge or there is a long sales cycle associated with closing new business, then the outsourced model is problematic, because it is difficult to transfer that type of knowledge to a third party, with VAR’s being the exception.
You don’t need to be close to your customers – If the product is mature and detailed feedback from customers is not required, then the outsourced model might work, however this is not the case for many start-ups where the product management team needs to be in very close contact with customers to gather feedback critical to the evolution and improvement of the product.
You don’t need to own the customer relationship – If follow on business is a big part of your business and this requires relationship development with customers, then it serves to have that in-house where you can control the development of the relationship and handle matters like staff turnover. Conversely, if most of the sales are one-off, then an outsourced model can work.
When branding is less important – It can be difficult to control the brand and reputation of the third party selling your product, and your message may get watered down, particularly if the third party seller is representing other brands. Plus in many cases, particularly call center type sales models, you don’t actually know who will be selling your product. This may or may not be an issue depending on your business.
You don’t need complete visibility on activity – Depending on the outsourcer, you may or may not get detailed or timely insight into sales activity and calls. If you want that market data, it needs to be part of your arrangement with the third party seller.
You need trained salespeople quickly – Notwithstanding any of the issues mentioned above, going with an outsourced sales model can be attractive because they take care of hiring, training and managing the sales reps so you can focus on your business.
I have seen a lot of disappointment with outsourced sales models, but I have also seen it work well. Your business and sales plan dictates whether it will work for your organization.
To your success!
Eliot received his B. Comm. from Carleton University and has been honored as a Top 40 Under 40 Award winner.
He co-authored Sales Recruiting 2.0, How to Find Top Performing Sales People, Fast and provides regular insights on sales team management and hiring on the Peak Sales Recruiting Blog.
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