When is it right to outsource your Inside Sales?
by Johann Edward, CEO of EIMS
The Inside Sales team is usually kept in-house to ensure that there is a steady sales pipeline of well-qualified leads. This is particularly so in the technology sector because of scepticism that an outsourced team will be able to articulate a sophisticated value proposition.
A trend is emerging in the IT sector, where a number of companies are realising that current sales-processes are no longer cost effective. Too much time is spent discussing technology and not enough focus given to progressing the sales cycle. An outsourced Inside Sales agency’s core focus is sales productivity, so it’s worth considering if they can overcome the perceived barriers to success.
So, when is it right to outsource your Inside Sales to a specialist outside agency? The argument for outsourcing depends on a number of factors, including:
• The complexity of the product or service
• The value : volume ratio of the [inside] sales mix and the nature of the sales cycle
• The target audience (in particular their level of requirement for customisation of the sales process, and their need for in-depth technical reassurance).
• The culture of the vendor company (techie or saesy?)
Let’s take a closer look at some of the key decision influencing factors:
Complex new technology is always expensive to both sell and implement, but over time it will become more commoditised. As it does, the distribution channel shifts from direct sales to volume distributors, initially via VARs, but ultimately through direct selling to the public. For many products, it should therefore be recognised that Inside Sales will ultimately end up being outsourced.
The value:volume ratio and the shifting nature of the sales cycle
There is always a stage in the product lifecycle where dedicated enterprise field-sales is too expensive, yet commoditised, vendor-neutral distribution is ineffective. This is the ideal time to consider outsourcing your inside sales and channel sales functions. This is because while the product still needs both dedicated technical and sales expertise, outsourcing will accelerate the shift to a more cost-effective sales culture, where the focus on sales targets is equal to the focus on expert service.
At this stage in the product lifecycle, the target audience tends to become more comfortable buying over the phone, at least for the front-end of the sales cycle, although they may still require face-to-face contact with field sales or a reseller before committing themselves to any significant expenditure.
The target audience
Whilst the target audience matures, the in-house Inside-Sales function can remain in an ‘enterprise mentality’, continuing to support the view that their product requires high-end experts first, and sales skills second.
If buying behaviour shifts but sales behaviour doesn’t, the result is an expensive sales disadvantage. ‘Watch-out’ symptoms include field sales being too involved in accounts that should be serviced on the phone, or channel partners not meeting expectations because they feel there’s too much direct competition. This is the right time to consider outsourcing Inside Sales.
The company culture
Many technology vendors have a culture which is rightly proud of their technology. This can lead to tech-heavy sales conversations and in-depth meetings which don’t progress the sale fast enough. Changing the culture of the in-house team is one solution, but this can be costly and slow, and it doesn’t address historical cost-base issues.
Outsourcing inside sales to a specialist sales and marketing outfit is one good way to shift focus onto the commercial aspects of the sales cycle. Outsourcing Inside Sales also helps to clean up lines of communication, and make sales processes more efficient. Once best practices have been re-vamped, you can in-source once more to get the best of both worlds.
While successful outsourcing of Inside Sales is about timing, it also requires a number of key ingredients in order to be successful. The first is that the outsourced team must be of the highest calibre, fully trained with the latest best practice techniques and conversant in the company’s products and services. There is little point engaging an outsourced agency if they are to be kept at arm’s length from the core sales strategy. This means that in order for any outsourced Inside Sales team to be effective, they must be made part of the ‘inner circle’ and treated as strategic partners.
A cost effective and results-driven approach is also driven by the outsourcing process, because it encourages both clarity and discipline through more formal communication and demarcation of responsibility, which tends to wane over time with an in-house team.
Whether you need a steady flow of appointments for your field sales, or a fully independent Inside Sales function, the market has developed to the point where it is both feasible and advantageous for you to outsource your Inside Sales.