Should you outsource cold calling?
Deciding whether to outsource cold calling is not a quick decision.
Identifying how to implement and manage your cold calling efforts requires you to determine the needs of your ideal customers and your sales team, review pros and cons, and research how outsourcing cold calling has or has not worked for other businesses.
After working with sales professionals, sales organizations and outsourced sales providers for years, we have identified the key factors you need to consider.
Before you decide to outsource cold calling
The first thing that any organization looking to outsource cold calling should do is try it in-house for at least a month. If you’re an early-stage startup, then the founder or CEO might be the one doing it—I refer to this as founder-driven sales. If you’re an enterprise, then the task might fall to an existing unit or sales group that services a different vertical. The key is to gain insight on what it takes to do cold calling.
This will give you an idea of the cold calling services you need and arm you with information any cold calling service provider will ask for. And once you’ve tried it for yourself, you’ll be better able to gauge the pros and cons of outsourcing by understanding what you might gain or lose.
Why outsource cold calling?
One of the benefits of outsourcing cold calling to a trained contractor is the ability to free up time for your existing salesforce. Regardless of the size of your sales team, meeting the demands of a great cold calling process requires a lot of time and attention.
With an outsourced cold calling team, you can ensure that phones are ringing 6–8 hours a day with more than 10 prospects being called per hour. Depending on the volume of prospects you want to reach out to, outsourced sales prospecting teams can make hundreds of calls per day per rep, and ensure a high reach rate when they use technologies like predictive dialing.
This enables your in-house sales team to focus on more high-impact work. Outsourcing cold calling allows employers and sales professionals to concentrate on their primary skill sets and frees up the senior team to close larger projects and work on strategic tasks that have a greater effect on the bottom line.
Besides the time savings and increased productivity for your team, the benefits of outsourcing your cold outreach include:
- Dedicated cold calling experts
- Reduced training and hiring costs
- Avoidance of new technology costs
All of these things are valid reasons to outsource your cold calling efforts. But outsourced cold calling comes with a few drawbacks as well.
The disadvantages of outsourcing your cold calling efforts include:
- Lack of integration with in-house sales team
- Lack of brand control and message ownership
Who should outsource cold calling?
A recent sales study conducted by The Bridge Group found that the average SDR could do about 45 dials per day. For the last decade, 50 dials per day has been the standard expectation for effective cold outreach.
If your SDR team is struggling to reach this number, then your organization is likely a perfect candidate for outsourced cold calling. That’s not to say you’ve created a poor environment for your SDRs—it’s just that they’re doing more than cold calling, when a more focused approach could help move the needle.
As Mike Hawkins once said:
You don’t get results by focusing on results. You get results by focusing on the actions that produce results.
Thus… sales teams that are not primarily focused on cold calling are likely the best suited for outsourcing this function. By doing so, you’ll be able to give your best account executives the chance to focus on upsells, and allow your SDRs to focus on nurturing qualified relationships.
Does it cost more or less to outsource cold calling?
One of the biggest mistakes that sales executives make is underestimating the cost of hiring SDRs. If you look at sites like AngelList, Glassdoor and Indeed for a gut-check, you’ll see that the salary for an SDR can range from $45,000–$65,000.
This is just the base salary.
On top of that base is often commission and other complex variables that hike the take-home pay for SDRs. In the Bridge Group report mentioned earlier, the average SDR compensation in 2018 came in at around $75,000:
And that doesn't factor in office space, laptops, software, onboarding and coaching costs, and perks like team dinners and morale boosters. Of course, every organization's budget for employees and contractors is going to be different. Some organizations will have no problem investing $80–$90K per SDR because they’re a high-growth rocket ship. For others, though, this type of investment could kill profits overnight…
It’s important to keep in mind that most SDRs aren’t limited to cold calling. So even if you outsource cold calling, it’s very possible that you’re still going to have to invest in SDRs; however, as explained above, their time is freed up by outsourcing this function. As a result, you may be able to extract more value from your SDRs by having them shift their attention to deals that are more likely to convert and relationships with a higher value.
Consider both options & do your research
When it comes to deciding whether to outsource cold calling as a sales function or keep the effort in-house, make sure you don’t rush the decision-making process. Discuss it with peers, colleagues and your team. Weigh the facts and figures carefully with the drawbacks of losing the in-house capacity. Talk with your SDRs and other executives in your situation and don’t hesitate to reach out to multiple cold calling solution providers before choosing one. Be sure to ask questions like:
How do you train your team on our sales script?
Would your sales team close more deals with more pipeline?
How do you manage turnover of salespeople?
Do you use a solution like Close for outreach?
What is your pricing model for this service?
Do you follow up with dead leads?
How do you avoid sounding spammy?
How often will we get reports?
All of these questions can help you figure out whether to outsource, and how to choose the right partner. Don’t hesitate to test the waters on a small project before committing—that simple step could pay dividends for years to come.
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