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Outsourcing your sales force - a good idea? 

9/13/2013

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Building a business from ground up to a successful one requires same resources from small and big companies - SALES. Sometimes companies look into outsourcing their sales functions in order to optimize their new business acquisition and to get more traction in the market. Many result in successes and others fail due to various reasons. In order to get a sense what common obstacles and hurdles are, here is a list of some of the pros and cons for outsourcing sales to a third party: 


Pros:

  • No successive hiring costs (there are still service costs).
  • Trained and experienced sales team with a proven track record
  • immediate success rate feed back
  • Salespeople a highly incented to close business.
  • Scalability of cooperation with sales team i.e. as results come in, opportunity to grow or downscale quickly depending on success rate and market feed back
  • You pay for results only
  • Quick and dirty - this either works or it fails miserably
Cons:

  • If success is hard to come by, outsourced salespeople will quickly begin to under-perform in the very beginning. Just like with commission-based sales executives, outsourced salespeople are more likely to fall out before you can see whether or not the relationship will really work out.
  • Communication between the outsourced sales team is challenging and often requires clear reporting systems in place and extra resources to keep checks and balances between the two parties
  • Outsourcing sales can be a long process and finding the perfect match is no picnic in the park
  • Erratic compensation and lack of reliable income means your sales people have more financial problems, ironically distracting them from work goals.
    In the case that your company lacks competence in sales and is in a position to pay for results to an experienced sales team, outsourcing is the right path to take. 
    However, if your employees are able to close deals, network and accomplish in attracting clients, hire a sales executive to train and motivate your staff in the ins and outs of sales to build a sustainable sales system for your own company. In the end, you either need to build a sales organisation and culture OR buy a ready set-up from somewhere else to "test" market response. As a long-term solution, outsourcing sales depends on which development stage your company is going through.  

Any other pros and cons for outsourcing sales? Leave a comment and start a discussion below! 
Next post: how to build a stellar sales team!  

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Should You Consider Commission-Only Salespeople?

9/3/2013

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Pros:

  • Reduced risk in hiring (there are still time and opportunity costs).
  • Salespeople a highly incented to close business.
Cons:

  • If your sales cycles are more than a month or two long, commission-only salespeople will begin starving before they can realistically close enough business. They are more likely to fall out before you can see whether or not they will really work out.
  • The company will attract more inexperienced salespeople that can’t get better jobs.
  • Commission-only increases the motivation to “do wrong” to close a sale. You do not want desperate salespeople representing your company. They will increase your liability, decrease your customer success and satisfaction, and wreck your culture and morale.
  • Erratic compensation and lack of reliable income means your sales people have more financial problems, ironically distracting them from work goals.
    If you have a “churn and burn” culture that sells commoditized product, perhaps commission-only sales is a way to go.
    If you want to build a solution-selling, high-value sales force, commit the team and company to invest in their success just as much as you expect them to invest in the company!
http://www.forentrepreneurs.com/predictable-revenue/

Valid points made by the Predictable Revenue people and a good question to consider. Here is another one: should you outsource your sales? Pros and cons soon to come in my next post. Stay tuned!
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The Rising Inbound Sales Trend - in or out?

9/3/2013

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Since the last financial crisis, many companies are struggling to stay afloat. As human beings we often relapse to our habits to find something familiar and secure in an unsure environment - this is also the case with companies looking for sure footing to get them back on the growth track. Unfortunately, several corporations fall prey to their old ways and stick the guns they know have worked at some point and time. This approach, however, makes them regress and progress stays at bay. 

Then there are those companies that evolve to their surroundings by innovating, adapting and by acquiring a new skill set that sets them apart. Often times, this new approach finds a way of doing something better, faster or cheaper, or all of them at once. 

This last July, Harvard Business Review published an article on Inside Sales, which in the past two years has become more and more popular. Many organizations are prisoners of their routines and success models that have proved to work in the past, but bear an increasingly lesser role in the world of today. The tools of yesterday do not simply measure up with the ones needed for the ever-changing world we live in now. HBR contends that Inside Sales is the upcoming trend that is already picking up companies from their ruts and lifting them up to new heights of growth. 

First there was Salesforce and then there was inbound/inside sales. As companies seek to cut back on costs and increase the efficiency of their sales force, they have quickly embraced SAAS as the way to go. In order to use a system like Salesforce up to its full potential, there needs to be a inside sales process in place to keep feeding 'The Machine'. Bringing the bacon home is not a mere function of having sales people visit clients in the field. With the digitization and globalization it is more evident that inbound lead generation, digital channels and inside sales needs to be more data-driven and...well, digital. 

Mike Moorman, a senior leader in ZS Associates' B2B sales and marketing practice states in a HBR 26th of July interview the following: 

"Many B2B companies are making inside sales a priority. I've seen companies investing to create new inside sales teams, adopt advanced analytics to measure and improve productivity of those teams, realign inside and field sales to optimize market coverage, provide value-based selling tools tailored to inside sales, and upgrade their inside sales customer engagement processes and skills." 

This just goes to say that companies are already implementing inside sales big time - and the ones that are, reap the rewards: 

Salesforce.com - Aaron Ross made inside sales an integral part of the sales process and ramped up the revenue by 100 million. 

Astra Zeneca - replaced its field sales people with a 300 inside sales team and saw costs reduced significantly. 

IBM - focused on SoMe and generated leads to its inside sales people and saw a 55% increase in Twitter and a high-quality inbound leads.

SAP - expects to increase channel sales by 40% with the help of specialized inside sales teams. 

These are only a few examples. If the big ones are seeing the benefits, maybe should the little ones. To find out more - contact me and let's discuss setting up your own inside sales team. 

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