Episode fifty-five

Sales Development: How To Decide Whether You Need to Outsource or Hire an In-House Team

Guest: Kevin Warner, CEO and outbound sales leader at Leadium

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Kevin Warner Featured Image Sales Development Outsourcing

About This Episode

Outsourcing your sales development isn’t necessarily a good fit for every organization. While it has the ability to save time and money for some, it simply doesn’t make sense for others.

Kevin Warner knows this. As the CEO and outbound sales leader at Leadium, he helps organizations engage in strategic sales development activities that bring you qualified leads. From strategy to execution, they provide full-service support.

Kevin boils down markets into three categories:

  1. Enterprises
  2. Mid-market
  3. Small and medium business

These three categories make deciding on in-house vs. outsource a bit easier.

For enterprises, his team doesn’t necessarily recommend outsourcing sales development because it’s a hard game to win. At this point in your business, you’re likely going after different funding goals, growth goals, and you have a lot of stock placed on investment by having headcount. Outsourcing doesn’t usually make sense here.

Outsourcing Sales Development isn't for everyone Kevin Warner Leadium

When it comes to mid-market businesses, you have to consider what is going to be better long-term for your organization. Where are you heading and what tools do you need to get there? According to that, does it make sense to invest in an in-house team or outsource?

Finally, outsourcing is a no brainer every time for small and medium businesses. Kevin has never come across a situation where outsourcing sales development and lead generation in an SMB wasn’t a good, strategic approach.

Sales Development Outsourcing Kevin Warner Time Resources

SMBs aren’t usually in a position to pay salaries to a large sales development team. Some don’t even have the funds to pay sales reps, so Founders do the groundwork. One thing that every business has in common is a need for more customers. Very few businesses are content where they are.

So choosing becomes a matter of how much you can afford. If you can’t afford to bring in a VP of Sales then you probably can’t afford an SDR whose entire job is to create opportunities. You can benefit from qualified leads an SDR brings in. But here’s the thing: If you hire a team member to execute on that goal, making a bad hiring move could cost you a lot in money, effort, and time lost.

If your company is already struggling with not bringing in leads, making one wrong hiring move could cost your business its longevity.

How to Find the Right Outsourcing Agency

Kevin says that the average SDR is only with a company for 1.5 years, and it takes an average of 3-5 months to get them trained (and build their pipeline). He also mentioned, on average, it costs $140,000 to have one SDR employed for one year because of the hidden costs that people overlook. Things like salary, benefits, taxes, technology costs, LinkedIn subscriptions, training time, etc. When you’re not in a position to make that risky move, it’s time to look for an outsourcing agency.  

There are three things you should look out for when vetting an agency:

1. Vendor reputation

An agency needs to be able to execute on what they promise, and that’s hard to find. Because of a low barrier of entry and high margins, you end up with too many subpar agencies in the marketplace.

Our inboxes are inundated with organizations that want to do lead generation and source data and leads for us. So it’s your job to put that vendor through the same process you’d put an internal hire through. Don’t expect it to be a 2-day close. Do multiple rounds of interviews, talk to their former clients, and check out some of their work. You’re adopting an outside team, so take the time to find out who they really are.

2. Strategy

When you get on a phone call with a potential vendor, have them discuss their proposed strategy with you. You’ll know very quickly whether the vendor is just about the margins. Ask questions like: do you have any experience in my market? How would you approach it with us and how is that different from how you approach it elsewhere?

If the person on the phone can’t speak heavily to strategy, it’s a red flag. Don’t go with them because outbound sales and outbound lead generation is 100% about the strategy.

3. Restricted to Databases

If the vendor your vetting only works with databases, what happens when you’re targeting ideal customers who don’t exist in that database? The outsource vendor shouldn’t be limited by a database otherwise they will be limited in what they can deliver.

They should be able to go beyond a database. So find a vendor who’s backbone is data sourcing who are able to apply a strategy to that sourcing. Find the agencies with human researchers who can refine what they look for to fit your exact needs.

Sometimes You Just Need Both

If you’re still not sure whether you should outsource or hire an in-house team, let us challenge you to consider doing both. If you have the resources, don’t choose one or the other.

Find your in-house sales development team, but bring on an outsource team as well at the same time. Why? The outsource team can not only help get your team ramped up but they can also get a headstart on the SDR’s pipeline as you train your in-house team members. In that scenario, no time is lost. It happens simultaneously.

Having both is also a great safety net when it comes to in-house turnover. Remember that stat Kevin gave us: The average SDR is only with a company for 1.5 years. Whether you have multiple people leave at the same time or if you just bring on an outsource team while you ramp up your new team members, the outsource team helps ensure your pipeline never stops expanding.

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About The Podcast

The Sales Engagement podcast is the #1 podcast focused on engaging your customers and prospects in the modern sales era. This show features real-life stories and best practices from revenue leaders doing the job day in and day out, in a casual, radio-like talk show.

Each episode features modern tactics, strategies, hacks, and tips to get the most out of your sales engagement strategy and help you navigate the next generation of sales. You’ll find energetic talks that will provide you with real actionable value around building meaningful connections and creating a better selling experience through authentic conversations that you can measure.

The Sales Engagement podcast is here to help B2B sales leaders, customer success leaders, and marketing leaders innovate and usher in the next era of modern sales by building pipeline, up-selling customers, and ultimately generating more revenue with more efficiency.

Hosted by Joe Vignolo, Senior Content Managing Editor at Outreach, and Mark Kosoglow, Vice President of Sales at Outreach.

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