It’s almost a taboo topic among business owners, especially locally, about the practice of sales outsourcing. It still seems risky, even “wrong”. How can you trust your product or service in the hands of outsiders? Shouldn’t sales be a key business component you take care of yourself?
By Lyana Shah
The answer? Yes and no. Never is outsourcing a complete surrender of duty, and sales outsourcing is no different. You still have to take charge of your own sales strategy, but there are many instances where delegating the actual sales and marketing to an outside source can prove more efficient for you, and profitable too. Some companies may have sales representatives working for them as an extension of themselves, while others may combine their own sales team with an outside one (for example, splitting accounts). You may also have sales managers/directors who recruit sales reps and oversee their progress. Just be careful not to flit too much between direct and indirect selling – this can cause confusion among your staff and your buyers, and demotivate your sales reps.
The Why
Typically, sales reps are commission-based, and since that means you pay for what performance you get, it forms a ‘shared risk’ model that can be quite enticing, particularly new, small or inexperienced businesses who want to focus more on their core competencies. It can also provide better ROI value, compared to an equal-sized internal force with full-time salaries and benefits, which is no more guaranteed to perform any better.
Establishes sales representatives would have long-standing relationships with clients you may not have access to, know better who to approach with your product/service and get it to market quicker. These potential clients tend to be much more receptive to listening and responding to them rather than cold calls from a new salesperson. Your sales reps can also garner a greater amount of feedback to help you get a feel for how your product would on in the market, how it performs after launch, and what comments clients have – feeding all this information back to you in the form of regular reports and updates. Sales rep firms with a larger reach may also be useful in taking your product or service global. If you don’t have the people to go out there and make more sales, then this is where they come in.
So just how prevalent is sales outsourcing? Gaining use since the 1990s, it’s still a growing industry that’s been estimated to rake in over $50 billion by the end of 2010. As for the benefits, consider these big names: Sun Microsystems, IBM and Siemens. Just this July, IBM reported 16% year-on-year gains ($15.2 billion to be more exact), with $10.1 billion of its increased sales coming from its Global Technology Services outsourcing group.
Choose With Care
Sounds peachy? While the potential profits are noteworthy, you’ve got to be careful about who you outsource your sales function to – and believe us, that’s just the start of it. First thing’s first: how do you select the right person or firm for the job?
Your representative should serve companies in the same line as you (and certainly not rivals!). Number One, this is so that they will already have access to the kind of clients you want to tap, and they will already be familiar with your market and how your product/service works. In other words, you get the niche or specialisation advantage. Number Two, this can sometimes open up leads for you, with other products and players.
Much like when hiring employees, a certain enticing value can help – better commission rates will draw rep firms to work with you, and help to keep them motivated to do their best on each sale.
Working On The Relationship
You will spend a considerable amount of time initially familiarising the new sales force with your company and your product in the beginning, and this can take anywhere from a few months to a year. They need to be prepared to explain to customers, and receive questions and feedback almost as well as they were one of your own. When faced with a question from a customer for which they don't know the answer, a good sales agent will say, "I don't know, but will have you the answer tomorrow."
You have to be prepared to work with them on providing requested information to be given back to clients, and conversely, they have to be sure to keep you up-to-date with sales forecasts and feedback, perhaps on a monthly or quarterly basis. It’s a delicate tug-of-war once your sales reps are out on the field for you; you want to stay informed of what they’re doing, but you don’t want to end up breathing down their necks either. Establish and agree on an interval cycle to check in with each other, with a bit of room for informal checks every once in a while. Make it a practice also to spread new information throughout your sales channel to strengthen the team.
Successfully outsourcing your sales function very much calls on the basic aspects of any good delegated relationship – trust, commitment, and careful selection! You draw on their experience and established client base so that you can focus on strategy and your core business. |
