Most marketers and sales development managers (like Jim) agree that having a consistent flow of quality leads is crucial to the growth of the business. However, on the topic of whether an organization should outsource lead generation or handle it in-house, opinions are varied. Some companies insist that sales development should be handled internally because direct employees know the business best. While others argue that lead generation is an inefficient use of in-house reps, whose time is better spent closing deals.
Meet Jim…hear his story on factors to consider when building an internal sales development team including: cost, control, effectiveness, scalability, training and oversight, to name just a few.
To make this decision easier, there are a few questions that will help determine if outsourced or in-house lead generation is right for your organization.
1. Do I have the capacity to manage a team that requires a lot of oversight?
Managing a staff of inside sales reps requires a lot of effort. In fact, it can take as much as one hour of managerial oversight for every hour of sales rep time for new teams. Because of the high burnout rate in inside sales, reps require a lot of recognition and clear metrics for achievement. While managers often consider financial rewards, managing a staff of inside sales reps also requires daily encouragement and recognition to keep reps motivated.
2. Do I have the right technology?
To succeed, lead generation needs metrics that go beyond measuring things like call attempts and calls logged. Lead generation managers need to categorize calls in a way that helps them understand which rep is having the most calling success and why, who’s the most effective and why, and how to help the team better replicate this success. This requires specialized technology that allows prospecting teams to test scripting, follow-up and cadence strategies, then compare the results.
3. Can I support my team with good data?
Campaigns that begin with clean data have a significantly higher return on investment. Unfortunately, this is where most lead generation campaigns fall down. There are a few ways to get data: subscribe to a data resource, buy a list, custom-build a list or expect sales reps to research their own leads. If sales reps are responsible for their own data, productivity will be fairly low because they will spend their time researching contacts instead of calling.
4. How will I know if we’re successful?
It is almost impossible to know if your effort is successful if you don’t know what success looks like. Best practices for scripting, training and campaign processes will provide a framework for recognizing success. Without these best practices, the timeline for success becomes very long -– as long as six months – as sales reps are hired and trained, progress is reviewed and mistakes are corrected. An outsourced lead generation partner can provide intrinsic value beyond best practices and proven processes. The right partner should be able to provide benchmarks of performance across other campaigns targeting similar industries, title paths or solutions, contributing insight about how your company compares to others.
5. Do I know the full cost to hire an inside sales rep?
While it’s easy to understand the hourly cost of outsourcing inside sales, pinpointing the cost of an inside team takes more work. The costs of an in-house sales rep include more than just salary and benefits. Infrastructure costs, including technology, data, physical space, a phone and computer can add an additional 10 to 20 percent to the cost of in-house employees. In addition, managerial time is significant and must be considered. Other “hidden” costs include:
Ramp-up time to build processes, establish benchmarks and hire and train an inside sales team. This can take several months, and in the meantime opportunities and sales are lost.
Productivity attrition from internal meetings, office chitchat and Internet surfing. Some estimates show that typical inside sales reps spend only about 60 percent of their time making calls.
Turnover of up to 80 percent annually. This requires constant recruiting and training of new employees, and results in lost opportunities and sales. These costs can be 200 percent of the annual cost of an employee.