RPM
If you’re reading this then chances are you’re considering an outsourced sales team, or at the very least, you’re asking yourself, “Is outsourcing sales a good idea?”
Hiring an in-house sales team versus partnering with a sales outsourcing company has been an age old debate that has yet to die. However, we believe that it’s not a matter of choosing one or the other, but rather using a combination of both depending on your business’s situation.
Nowadays, sales is a broad term that encompasses: sales development reps (SDRs), account executives (AEs), business development reps (BDRs), full-cycle sales reps, account managers, appointment setters, etc. This is even more nuanced when you consider selling in a B2B (business-to-business) or B2C (business-to-consumer) context. For the sake of this article, we will refer to a “sales team” in the general sense that includes any and all of the mentioned roles unless specified otherwise.
Below are reasons why you should augment your business with an outsourced sales team.
1. You want to move FAST
This is the #1 reason why our clients outsourced their sales team. They have a sellable product or service and want to get it to market as fast as possible or have reached the growth/scale phase and the business leaders can’t grow the sales org fast enough on their own.
For most businesses, growing a sales team takes time, and making the first few successful hires (whether that’s SDRs, closers, or even a VP of Sales) can take 3-6 months, if ever, to get right.
The hard truth is that most of the time, the first few sales hires don’t work out. And that’s because of several reasons that we will discuss later on in this article, but the bottom line is that there is a lot of drag that slows businesses down when it comes to building a proper sales team.
By working with an outsourced sales company like RPM, you can take advantage of several things:
- We already have a network of experienced sales people to choose from
- We have experience in building sales teams
- You don’t have to remove focus from your core competencies to screen, interview, hire, and train sales hires (more time, overhead, and costs)
- Faster ramp up period - 30 days vs the typical 90 day average
2. You can’t justify the cost of an in-house sales team right now
Traditionally, sales is not cheap, if you do it right. Read that again. Sales is not cheap, if you do it right. It’s supposed to cost money because it’s supposed to make (a lot of) money.
But it doesn’t have to be expensive either.
In most cases, sales outsourcing can reduce costs by up to 60% or more depending on your needs.
For example, in 2024 in California, the minimum annual salary for exempt employees (white-collar, salaried employees such as salespeople) is $66,560 or $5,546.67 per month. And that does not include any additional overhead such as insurance or benefits.
New York state has very similar figures, which is to be expected from states like these.
Here’s a snapshot of current national average salaries for salespeople:
- National Average SDR (sales opener): $55,018 not including commission or bonus
- National Average AE (sales closer): $79,325 not including commission or bonus
For SDRs, add an additional 25% in bonus compensation, and for AEs double it. It’s common practice for AE’s to receive half their income as a base salary and the other half as commission, so that $79k becomes $158,000 assuming they hit their targets.
Also, these figures don’t include additional costs such as insurance or benefits.
Another thing to note is that the cost to recruit a new hire ranges from $4,700 to upwards of 4x the role’s salary. That’s a costly sum to hire just one person, let alone a sales team of 10 or 20 people, and you’re still at risk of the new hire not working out.
Remember, sales is the lever that funds the rest of the business, and if you do it right sales will be a profit center. But you can build it much more cost effectively by outsourcing the sales team.
3. You Don’t Have Sales MANAGEMENT Experience
Sales is tough. Sales management is even tougher. And if neither you nor someone on your team has real sales management experience, you could lose an entire year of progress in your business from making mistakes and “learning on the job”.
There are several aspects of sales management that most business leaders ignore, underestimate, or just don’t fully understand such as:
- Managing the teams emotions and egos (spoiler alert: there’s A LOT of that in sales)
- Setting proper “stretch-but-doable” sales targets
- Creating a scalable process for each segment of the team (the “Sales Playbook”)
- How to properly interview/hire salespeople appropriate for your product and growth stage
- All the latest and greatest sales tools (there’s a million of them)
When you outsource sales to an expert partner, you’re essentially getting all the years of experience, wisdom, intuition, and domain expertise instantly. This saves you A LOT of headaches and wasted deals, and at the very least it saves you from leaving money on the table, which is very common with inexperienced sales managers.
4. You Don’t Want HR Headaches
This is a key benefit to outsourcing sales, but it’s also a key benefit to outsourcing in general: You get to offload HR overhead and responsibilities to your sales outsourcing partner. This is important for several reasons:
- You don’t have to worry about compliance and labor laws for your outsourced sales team
- You don’t have to track payroll and deal with all the sick, vacation, holiday, paid time off, lunch, break time, over time, etc. policies
- You can size up or size down the team as needed
- You can let go low performers without putting in place a lengthy PIP (performance improvement plan) or review process like you would in-house, which could keep an unwanted resource around for months
5. Your sales people are quitting (or not joining) your team
This is a subtle, yet critical one. If your in-house sales people are quitting or candidates are just not taking the offer, chances are you’re doing something wrong. It could be the compensation package (usually not structured properly) or something related to your and/or your hiring manager.
This is closely related to #3, but it gets to something deeper… Great players want to pay for great coaches. The truth is, there are A LOT of options for great sales people, and if your management team and/or product isn’t on par with the other options in the marketplace, you’re going to have a hard time recruiting and retaining great sales people.
By using a nearshore sales outsourcing partner, you get great quality sales people who otherwise would be out of your hiring realm. Also, your outsourcing partner acts as a third-party source of credibility for your company, especially if your company isn’t “Big Co” or “Hot Brand of 2025”. This gives you huge leverage as your outsourcing partner acts as the bridge between your company and great talent that you otherwise would not have.
Conclusion
When it comes to outsourcing sales, taking a “combination approach” can work wonders. For many businesses, combining their in-house sales team with an outsourced sales team is the right balance for maximum output with maximum efficiency and cost effectiveness. For other businesses, a completely outsourced team could be the right fit.
Most of all, not all outsourcing partners are equal. You must work with a partner who truly understands your business and has aligned interests or else you’ll end up throwing money at an endless money pit, which is often the reason why many people are hesitant to outsource in the first place.