Should you outsource your SDR team? The 3 most important things to consider.
The Board wants to see an increase in revenue, fast. Your sales team needs more pipeline. Your in-house Sales Development program seems to be going around in circles.
Even if you wanted to make changes, you don't have time to hire, train, equip and manage a group of all new SDRs. What should you do?
These are issues we hear a lot as we work with clients here at Tenbound. Companies need qualified sales appointments and pipeline today in order to hit their aggressive revenue targets. However, simply relying on the production of marketing or the Rolodex of your current contacts, doesn't provide enough pipeline for your sales team.
Maybe it's time to think about getting some help.
Then the critical question comes into play with regards to your Sales Development program...
Should you build or buy?
This question is not without precedent. Engineering departments outsource all the time, and most marketing departments use at least one outside agency or PR firm...so why not Sales Development?
Perhaps you have a Sales Development program but it doesn't seem to be producing enough appointments, pipeline and ultimately the revenue that you need to be able to hit your goals.
You heard from a friend that they use a great outsourced SDR program that's perfect for their industry and is producing great results.
Should you give them a call?
The investment of building vs. outsourcing your SDR team
There are two main arguments to consider when thinking about this problem.
Advocates for keeping Sales Development in-house focus on the long term benefits it can bring to the company. They value hiring, training and keeping high quality candidates who can be groomed for other roles within the organization – such as sales, marketing, customer success and product.
They also argue that the tribal knowledge on prospecting and customers in-house SDRs build up is important, and needs to be tracked and processed into an ongoing Sales Development playbook.
Advocates for outsourcing look at Sales Development by the numbers. They argue that the cost, timing and effort involved is so much more attractive when outsourcing that hiring SDRs makes almost no sense, unless you’re a very profitable and established company. Most people need sales appointments yesterday and don’t have the time, motivation or patience to start and run an in-house team.
When considering building or outsourcing your Sales Development program, it really boils down to investment. We can examine the investment in terms of three factors: cost, time, and effort.
Sales Development is a significant monetary investment. Whether it produces an ROI for your company will depend on many variables. Additionally, if you decide to invest in it, it'll be tricky working out how to allocate resources and what kind of return you’ll get.
In-house teams require salaries, benefits, data, management, and other costs...many of which would not necessarily come out the budget of whoever is responsible for building the team. Additionally, there are computers, desks, lunches, and a slew of other random expenditures that might come from a totally different budget.
Outsourcing is much more straightforward: instead of dealing with a myriad of expenses and convoluted budgets, you simply pay an outsourced company invoice each month. This payment comes out of the budget of whoever is making the purchase, just as would any other contractor, vendor or perk.
Standing up an in-house Sales Development team is not a project to be completed overnight. At Tenbound, we recommend hiring a Sales Development Manager first before even starting a team (if you can afford it). Many things must get done to set it up correctly, such as hiring, onboarding, training, coaching, playbook development and ongoing management. Without these in place, the program will struggle. This takes a long time.
Similarly, getting an outsourced firm up and running takes time, however it's generally shorter than setting up an in-house team. Depending on the outsourced firm, they can take your messaging, target profile, and playbook, and since they already have the people and infrastructure in place, they should be able to move a lot faster.
Starting from zero, you’d have to give your in-house team at least three months to start producing regularly, whereas hiring an outsourced shop should take less than a month to get productive.
There's a common misconception that if you hire an outsourced firm, you don’t have to put in too much effort because they will be doing the work. This is dead wrong.
While the amount of effort might be less in the long term than an in-house team, outsourced companies still need you to provide a tremendous amount of information at the beginning so they have a chance to get going on your target list.
Without that effort, they simply will not have the information they need to be successful. This could cause issues like them sending over appointments that don’t fit your ICP or are not qualified, causing friction with your sales team.
On the other hand, building an in-house team is a long term play and will take sustained effort and care over months and years. We often see that sales or marketing leaders (who are passionate about Sales Development), do a great job running the program initially, but eventually leave the company with no one to take the reins. The program is passed around and all that effort slowly wilts and dies.
Final thoughts on building vs outsourcing SDR
With each day and hour that passes, the need for high quality Sales appointments and pipeline continues to grow. Whether its an in-house program, outsourced program or a combination of both, Sales Development needs to be done.
If you are motivated by building a long term, successful program that will be a feeder program to the rest of the company for years to come, think about bringing or building the program in-house. If you just need appointments and pipeline as quickly as possible and don’t want to invest the time and money into starting an in-house program, go outsourced.
If you can afford it, do both and have them running simultaneously. Get a competition going and see who produces better results at a lower cost.
About the author
David Dulany has built high-performance Sales Development programs for Glassdoor, Cisco OpenDNS, Infer and Act-On Software. At Tenbound, he helps companies start, optimize and turn around Sales Development programs. For more info, visit daviddulany.com and tenbound.com.