September 05, 2023

When Does Outsourcing Your Sales Team Make Sense?

Outsourcing, the practice of using an outside business partner to handle what might otherwise be an internal business function, has become a staple of business-to-business commerce. According to a LinkedIn report, the most common outsourcing areas are business processes, information technology (IT) and manufacturing.

With the rise of software-as-a-service technology (SaaS), most every business outsources in some way, whether it's with a cloud-based accounting software or payroll application, an outside marketing firm, or an office security service.

Sales outsourcing is poised for growth.

While sales outsourcing remains outside the list of most-outsourced business services, small businesses are taking to it with greater enthusiasm than some of their larger competition. Small businesses, according to a Verified Market Research report, outpace medium-sized businesses in adopting sales outsourcing. The same research predicts that the small-business market for sales outsourcing will grow 7.4 percent annually through 2030.

How does sales outsourcing work?

In a sales outsourcing setup, a business retains the services of an inside or outside sales team, or both. A comprehensive outsourcing program could include prospecting, cold calling, relationship management, setting key performance indicators (KPIs), and hiring/training/firing staff. The outsourcer maintains all the technology and tools needed to sell your product or services. Its people get trained in your brand principles, just like your own representatives would be.

The sales outsourcer's compensation is typically based on performance targets. "If the team doesn't hit its marks according to the contract, then its compensation will reflect that," says Michael Hollander, VP of Sales for Fora Financial. "This is one of the core reasons why firms new or established may opt to outsource their sales teams," he adds.

What are the advantages of outsourcing your sales team?

Other key reasons to go third-party with your sales team include:

  1. Get up and running more quickly. For a startup, outsourcing can get you into a new market much more quickly than you could setting up physical offices and hiring sales staff.

  2. Ease management's workload. Without having to hire, train, and manage a sales team, you and your other managers can concentrate on product development, customer service, and other critical areas.

  3. Stay current with sales best practices and tools. Outsourcing sales provides ready access to sales pros whose business it is to learn new strategies and techniques, so they can always respond to changing market trends. Most outsourcing partners also have access to cutting-edge advanced sales and CRM technologies tools you won't have to invest in.

  4. Expand or reduce your team as needed. Scale up when demand is high, pull back during uncertainty in the economy or for your firm. What's more, you're not limited to your region — hire a team wherever you need one.

  5. Pay based on performance. Many outsourcing models offer compensation structures based on performance or commission, aligning the outsourced team's incentives with your business goals.

Consider the caveats.

Like any business agreement, outsourcing your sales team calls for careful consideration of potential downsides. These include:

  • Can you communicate your brand messaging? If your outsourcer is going to be training its people on your brand's unique value proposition and core messaging, these are areas you should have already developed and codified, otherwise you're not setting up your sales partner for success.

  • Will they be dedicated to your mission? Someone miles away selling your product or service may not feel as vested in its success, despite their performance incentives, as your hand-picked protégé.

  • How will your data be protected? Breeches of customer data are rampant and make for reputation-killing headlines. Having your customers' data living in another company's system can increase the risk of its exposure.

Among the ever-growing array of business services available, sales outsourcing is on the move and growing. Can it help you making your business thrive? Explore your options and ask the right questions (see sidebar) before investing in a new and potentially fruitful outsourcing relationship.

Since 2008, Fora Financial has distributed $4 billion to 55,000 businesses. Click here or call (877) 419-3568 for more information on how Fora Financial's working capital solutions can help your business thrive.