Why do companies outsource sales?

The route to a new market can be a steep learning curve for tech companies wishing to scale up and get clients in Europe. As can be the exciting, but also sometimes intimidating, road to the success of a growing SaaS startup — speeding past the competition. 

There are lots of new ideas to consider, the way to do new business is often much different to how a company is used to doing business.

Depending on your businesses’ development and where you’re at on your B2B tech journey, there are multiple reasons why companies outsource sales. From a tech sales perspective, pinpointing and targeting a brand new market, or even an underserved one, and for a focus on brand awareness, specific industry expertise is paramount. 

Budget is also a major and important constraint. So you’re left with a choice of finding, recruiting and training those expert salespeople. This is one of the main reasons why companies outsource sales.

Let’s take a look at that in detail, and other good motivational grounds for why companies outsource sales.

Lower your costs and your risk with outsourced sales

When we think of a budget, we think of spending on brand image, marketing-related expenditure — the biggest cost– and top of that marketing wishlist should be a real and well-thought out investment in an international sales representative team. Do it with a solid plan in place, perhaps with the help of an experienced and trusted outsourced sales agency. Discuss together the current liabilities and expenses and future of your business.

  • Be clear on your budget, and how much you can allocate
  • Clarify where your strengths lie, and your weaknesses
  • Understand why you win, and lose, deals
  • Talk together about growth and expectations, whether you expect to expand on your product or service, where you want to be in say, five years time.

Outsourcing sales can help you to achieve the rule of 40

The equilibrium between profitability and growth can sometimes be a tough balancing act. The rule of 40 — a standard rule of thumb and a simple financial framework in SaaS — states that the growth rate and profit should not total to less than 40%. 

But, startups might find that standard hard to achieve, when finding their own feet in the marketplace. Smaller companies may find themselves stretched financially when trying to cover different territories simultaneously. 

So, spend wisely when it comes to allocated finances and lower your overall risk, and you should be equipped to arrive at the right budget whilst still spending on the areas — namely sales and marketing - the main areas that will directly increase profitability. 

Time-to-market is reduced

Speed is everything. Right now, you need to prioritize first where to go, and how to get there. When companies outsource sales, they leverage decades of real prowess and experience— importantly, specific industry expertise — in selling tech abroad. 

Your initial sales assessment will clarify all the areas we have mentioned above, and more — understanding bottlenecks and clearing the way — that you can use to streamline your inbound and outbound processes as you move into Europe. You will be able to leverage all of that for the good of your business and its future in new territory.

Agreed goals and a ready-to-hit-the-ground-running sales team that sell SaaS all day long is the real reward, and that means you will get there fast — faster than you could alone, and ideally before the closest competition.

Outsourced sales give you the ability to easily scale

Why do companies outsource sales when they’re as yet unsure of what size sales function they need? Well, that’s the exact reason. 

Start small, or go big. There’s a flexibility in sales outsourcing that you simply cannot do with in-house hires. 

You should be looking carefully at your SaaS growth strategy, hoping to drive your marketing efforts to both generate leads and convert them into loyal, returning customers.

Shubham Gupta, writing for Gartner, advises that you must have the correct sales and marketing infrastructure in order to create that returning customer database, and therefore that growth strategy. And, in order to achieve that infrastructure, you must have a team of specialized professionals, not just sales, but B2B lead generation, product marketing and inside sales. Your aim is to attract, convert and close, so many companies outsource sales in order to enable this process, smoothly.

You might just require some star players at the beginning to get things moving, particularly in a foreign market. They speak the local language, and know how things are down in their own backyard.

When you’re on your feet, consider an end-to-end team, and outsource the whole function — or not. The choice is entirely yours and you don’t have to worry about local employment laws, ending contracts, or any fallout from disgruntled employees. 

Outsourcing’s got talent!

The overall effectiveness of your international sales representatives depends on their level of talent. This is why companies outsource sales: To get the best of that talent working for them. They will be able to pass the auditions and show you that outsourcing’s got talent, the caliber of which you wouldn’t get by slowly researching and recruiting in-house.

What are you looking for in order to show you that outsourcing will work for you, and create sales velocity for your business?

  • Sales representatives that will quickly define qualified leads (SQLs) and keep that quality over quantity approach.
  • Past form  — win/conversion rates — and the length of a sales cycle, we have discussed how speed is of the essence.
  • What number of opportunities have they worked on, successfully?

This will give you a good forecast of expected revenue over a given period, as well as act as a yardstick of how well your outsourced sales team will perform. 

Break free with outsourcing

Often, a company is stuck in a rut — in a siloed approach — just because they are not used to a cross-communication style of working. Departments close up and don’t rely on each other for intelligent information that can drive a business forward. Outsourcing breaks that down, introducing an outside force, with a holistic, across-the-board approach, that can help you to manage your business in a much more open and cross-functional way.

When and why companies outsource sales is often because it’s simply the best solution. As a solution-seller, you can recognize that it also allows you to take advantage of untapped opportunities with a knowledgeable team that will help you to cut through the noise, fast. Longer term, you will be easily able to test and perhaps even experiment with new learned sales approaches, and product positioning on other different foreign markets, maybe even scaling to more and more locations.

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