I was chatting with my good friend Dan McDade over at PointClear about how some businesses select not to outsource their sales lead generation and prospect development even when they are struggling with it internally and missing their sales goals. It got me really thinking about how I see the value proposition of when to outsource and when to go at it alone.
If I may be so bold as to paraphrase a line from Master Card, here is what I have to say about outsourcing in general: “Building your own internal campaigns for lead gen and doing a decent job without losing focus on your core business- fair enough. Pulling the trigger and letting the big dogs run while you focus on your core competencies and winning the day on both sides of the ball- priceless.”
Quite often, I am asked about outsourcing lead generation and appointment setting to professional service firms. As a lead management software provider, we sit uniquely in the middle because we provide the software that drives the activities of both the end user as well as professional lead gen and appointment setting companies. Additionally, for the better part of 19 years, we owned and operated a professional service organization that generated leads, appointments and sales by phone for a wide variety of organizations. In our final few years of owning the business, we were managing 275 inside sales reps and they were collectively moving 150,000+ products into the market, booking tons of appointments for sales teams and keeping plenty of sales funnels full. All of those years, all of those calls and all of those clients taught us a thing or two about why outsourcing lead generation or appointment setting is perfect for some companies and a disaster for others.
To make a point, I will share a brief story about my all-time favorite client. The company was in the manufacturing space and they were brilliant at what they did. However, they struggled to sell their product on a national scale because it was simply out of their wheelhouse. They hired us, and we took over their sales from soup to nuts. It was a big win for both groups. They focused on making, shipping and invoicing the product. We focused on selling more of it. Sales skyrocketed. Like all companies, they looked at us less as a partner and more like a line item expense. After a few years, they assumed they could easily replace us and do it in house. After all, there really is little or no magic in making sales calls. Or, at least that is what they thought. We got the boot and they got into the sales business. Less than six months later they had lost 50% of their customers and most of their profits. They came back. They left. Back, and gone again. You get the picture. Their final departure included a special request to hire our sales team that was running their project. We said sure. Six months later, they lost the people, lost the sales, and were back at the beginning again.
The point to the story is that not only were they perfectly suited for outsourcing; it was the only way they could survive. Why? Because all of their core competencies were built around being great manufacturers and creative product people. To be blunt, they simply sucked at selling. Even when they went to the market and recruited outstanding expertise to bring in-house, they still failed. Why? Because their corporate culture was perfectly suited to being a great manufacturer and poorly suited to house a sales environment. Through the years I saw this same example many times through many different companies.
My example was a bit long, but I really hope the point sticks. Sometimes, the decision to outsource simply stares you in the face. Other times, it is going to be more nuanced and a deeper dive and more due diligence will be requited.
As you think about your own challenges as they relate to building your sales pipeline, and whether or not outsourcing can benefit your organization, here are some top of mind things that I would consider and a few questions worth asking:
Are you satisfied with your current status quo?
If it is working, don’t change it. If you are satisfied with where you are and what you have, then stay the course.
Can you afford to outsource your lead generation and your appointment setting?
I suggest you reverse the question and ask, “If I am failing to meet my sales goals, can I afford not to make a change?” We could spend quite a bit of time on comparing the cost of internal efforts vs. outsourced cost. The best advice is to talk with a few companies, understand their cost and, equally as important, understand your real cost. Real cost has to include not only the hard line cost such as labor, admin and overhead. It also has to include lost opportunity cost because your sales pipeline is not where you need it to be. My friends over at Point Clear have a good comparison guide titled, “We Can Do It Cheaper.” I suggest you check it and others out.
Outside firms can’t know what we know, so how can they help us? We are the experts.
Fair enough. However, you have to keep in mind that they are the experts at filling sales funnels. They have the power of scale and metrics on their side and the good ones understand and deploy the absolute best practices available for the industry they are targeting. If they are successful, then they are successful for a reason. Remember, lots of sales people fail with massive product and industry knowledge. They need enough knowledge to be able to execute their goal: filling the funnel.
You mentioned disasters for some that outsource. What do you mean?
I have seen companies outsource the whole enchilada. The entire sales process from soup to nuts is placed in the hands of an outsource partner. The results may be perfect but if something happens such as a budgetary change, the firm that that is providing the service goes through a change and results suffer. Then your options become very limited. That is why I encourage companies to “partner” (I know I over-use the word) vs. simply outsourcing.
In summary, if you elect to outsource some portion of your sales efforts such as lead generation and cultivation, select a firm that works as an extension of your existing efforts. Learn and know everything you can about their processes. Understand the messaging they are using to drive results. In a perfect word, they should be an extension of your organization and all efforts should be integrated together and complement one another. If they are simply a firm you chose because they are cheap and willing to do the dirty work, then I would reconsider that decision. With all of the technology we have today, outsource partners can be a profitable extension to your own efforts; they can help mitigate risk and allow for more rapid expansion. For those of you that read and follow my posts, you already know that you may have to kiss a few frogs to find the prince of a partner you are looking for.