You’ve decided that it’s time to get serious about growing your business. However, between your client meetings, project work, team training sessions, and everything else you have to handle each day, you barely have enough time to take a breath—let alone focus on sales. It’s time to enlist some extra help, and you have two options: hire an internal sales team or look outside your company for an outsourced sales team.
There are many factors to consider when choosing the right sales option, but your budget may be the most important. How much money can you set aside for your sales program? Which option will give you the best return on investment? Can you even afford to focus on sales right now?
To help you make the best choice for your business and budget, here’s a thorough rundown of the costs, benefits, and challenges of hiring an internal team and outsourced sales development representatives (SDRs).
If you’re new to B2B lead generation, you might be wondering: What exactly is an outsourced SDR? In short, outsourced SDRs handle the first steps of the sales process on your behalf, typically for a monthly fee. These third-party sales experts are responsible for finding potential customers, sharing information about your business, and setting sales appointments with the most qualified opportunities.
Unlike internal sales reps, outsourced SDR teams don’t work for your business, which means you don’t have to pay their base salary, training costs, benefits, or commissions. You get to skip the learning curve and upfront costs associated with hiring your own sales team. However, for many, the drawback of outsourcing SDRs is the lack of direct control. You have to hand the reins over to another team and trust them to act as the face of your company, which can be a difficult transition.
To bridge the gap between you and your sales team, many outsourced B2B lead generation companies offer frequent meetings, access to their customer relationship management (CRM) platforms, and several other tools to increase transparency. You don’t just pay for people—you pay for data, labor, technology, and much more.
Here are some of the things you might gain from an outsourced SDR partnership:
- A list of promising prospects in your target area, complete with thorough and accurate information about their company
- A guaranteed number of appointments each month
- A team of SDRs dedicated to your account
- Custom marketing collateral designed to support your sales program
- Check-in meetings (these could be weekly, monthly, or every two weeks, depending on the company)
- A landing page for SDRs to include in sales emails
In addition to the concrete benefits you get from an outsourced SDR team, you also get perks that are harder to quantify. For example, you may not be able to afford an experienced sales rep’s salary. Additionally, it might take them years to nail down a structured sales strategy that gets you consistent results. With an outsourced sales team, you gain expertise, experience, and a process built on years of trial and error.
Of course, not all B2B lead generation companies are created equal. If you choose the wrong partner, you could end up with a glorified cold calling team that doesn’t care if your leads are qualified. Make sure you know what you’re signing up for before you choose your lead generation partner.
Now that you know the basics of outsourced SDRs, it’s time to get into perhaps the most significant deciding factor: cost.
When you hire an internal sales team to represent your business, the upfront expenses add up quickly. These costs include:
- Labor associated with recruiting, interviewing, and hiring new staff members: It can take months of searching to find the right team members for your company. Someone has to take time out of their day to manage job postings, call potential hires, handle scheduling, attend interviews, and manage paperwork. Depending on how long the process takes, you might end up spending thousands in labor before your new sales reps reach their first day.
- Posts on job sites: If you want qualified candidates to find your job listing, you need it to appear on the platforms they visit most frequently. Depending on the websites you choose, you may end up paying a few hundred dollars per post or a set amount per click.
- Training: Training Magazine found that the average company spent $1,111 on training costs per employee in 2020. Combine this with the hidden costs of training new employees—labor costs for mentors, instruction materials, learning management systems, and lost productivity—and you could end up dropping a few grand to train your new sales team.
- Salaries: According to Glassdoor, the average SDR makes almost $50,000 a year. After your first month with a small sales team of three employees, you would pay over $10,000 in salary alone.
- Taxes, benefits, and bonuses: Salary isn’t the only way you compensate employees. You most likely contribute to various employee benefits, including medical insurance, life and disability insurance, and 401(k) retirement plans. You also pay payroll taxes for Social Security and Medicare. On top of all that, sales jobs typically include some type of supplementary income, which means you could be spending a few extra thousand on bonuses and commission each month.
Without factoring in the automation tools, software systems, and sales databases you would have to purchase for your team members, an inside sales team can easily cost you six figures each year.
It’s difficult to put an exact dollar amount on each outsourced SDR you hire. Every outsourced lead generation company charges a different amount for its services, and your monthly bill depends on several factors. For example, you might pay a little extra for a lead generation program that includes sales collateral and email marketing on top of B2B appointment setting services.
So, instead of listing all the things you do pay for with an outsourced SDR, here’s everything you don’t pay for:
- Salary, bonuses, and benefits: Though your SDRs work for you in a sense, they aren’t actually employed by your company. You’re not responsible for covering their salaries, commission, afternoon coffee, company-provided gym membership, vacation time, or any other benefits. Additionally, if one of your SDRs hits every sales goal during a given month, their bonus doesn’t come out of your pocket.
- Hiring and onboarding costs: When you sign on with an outsourced lead generation partner, you don’t have to spend any time hiring or training staff members. You immediately get fully trained, experienced SDRs who are ready to start building your pipeline.
- Employee turnover: What many business owners don’t consider when hiring an in-house sales team is the possibility of turnover. Losing a sales hire not only throws off your workflow but also has a significant negative financial impact on your business. In addition to paying the costs associated with hiring a new employee, you lose 40 hours of productivity each week while you work to fill the vacancy. With an outsourced sales team, you don’t have to pay to hire a new employee or lose valuable time—you get a new, equally experienced employee to take over immediately.
- Sales software: It’s nearly impossible to run a successful sales program without an information database and CRM software. These systems usually come with a monthly subscription fee, and the most advanced software can cost tens of thousands of dollars per year. Your outsourced SDRs already have access to advanced software, which means you don’t have to worry about purchasing and implementing your own system.
- A lengthy transition period: When you hire your own sales team, it takes several months to compile data, create a list of leads, nail down a process, and start making sales calls. During that time, you pay your sales team the same amount as you will when they start setting appointments. With an outsourced team, you only have to wait a month or two for your SDRs to get to know your business and start making calls. You typically see results faster and pay less in the interim.
When you partner with an outsourced SDR team, you know what you’re getting for the money: a specific number of SDRs and sales managers representing your account, a certain number of dials per month, weekly or monthly progress meetings, a guaranteed number of qualified sales meetings during a given period, and any other added services specified in your contract.
Fluctuations in sales activity don’t impact your bottom line like they do with an internal sales team. Your monthly payment doesn’t increase during especially productive months. Plus, if your SDRs don’t fulfill the promises in your contract, you get something in return. As a result, smaller companies with less disposable income can often afford outsourced sales, even if an internal sales team is out of their reach.
If you’re trying to decide whether you can afford an outsourced SDR for your company, you should consider your potential return on investment. With the right outsourced sales team, the revenue you add to your business can pay for your sales program multiple times over.
For example, a single six-figure deal could cover your outsourced program for an entire year and leave you with thousands of dollars in profits. You wouldn’t have to use that extra money to cover bonuses or benefits. Instead, you could invest it back into your business.
With an internal sales team, you have to close far more deals to break even on your investment. This is certainly possible if you hire savvy sales talent, but you have to be willing to spend a large amount of money upfront with no guaranteed return. As a result, hiring an internal team may be a good option if you want direct control over your team members and have plenty of extra cash to spend on your sales program.
Both options have an excellent return potential, but the initial investment is far more manageable with outsourced SDRs. That’s why, in most cases, outsourcing is the better option. If you’re a small or medium-sized business owner and you want to grow your business without devoting any extra time to sales, SDR outsourcing is a no-brainer.
Want to hire an entire team of experienced SDRs for less than the price of one internal sales rep? Partner with Abstrakt.
Choosing between an outsourced SDR team and hiring an internal sales team isn’t easy. You have to weigh the various pros and cons and decide what’s most important to you: cost or control. However, even if you don’t take price into consideration, outsourcing is still a better option for many reasons. An outsourced SDR team takes care of time-consuming tasks on your behalf, creates a sustainable pipeline that yields long-term results, and already has access to a suite of cutting-edge sales tools. When you add money back into the equation, outsourcing is the clear winner.
Looking for an outsourced SDR company that sets consistent sales appointments with the most qualified leads in your target market? Look no further than Abstrakt. We offer a full team of experienced SDRs for less than the cost of one full-time sales representative. Plus, we keep an open line of communication between our SDRs and clients, which means you don’t have to sacrifice control.
With over a decade of experience revolutionizing the outsourced B2B lead generation industry, Abstrakt has unmatched expertise you can’t find at any other company. But don’t take our word for it—let our clients tell you why Abstrakt is the best choice for outsourced SDRs.
Ready to grow your business? Get in touch with us today to learn more about our B2B appointment setting services.