The initial offer sounds great:
You could pay a fixed, monthly sum in return for a full-service sales consulting firm of sales agents that you didn't have to find and hire yourself. They could help you expand your business much faster than you could ever do on your own.
So, you have finally come to the right phase where you can start expanding?
You're tired of being the only one who brings revenue?
Perhaps you need to build a sales team really fast?
Or is it just the right time to generate more sales traction?
Surely, the idea of outsourcing the sales process to a B2B sales agency as professionals sounds enticing, whichever of the above is your case.
3 key benefits of having your sales outsourced
1) Accessible and reliable resources
Where “resources” equal to “skilled sales guys that would otherwise be hard to get hold of on the regular job market”. And rather than looking for them yourself, persuading and negotiating terms with them, you can hire an agency that will provide these experts for you on a silver platter. You usually know what to expect, thanks to a number of referrals, even from your own field (look for a specialized sales firm with a full-service stack).
Compare this to hiring your own sales guys:
you spend several months to find them, onboard them and have them produce first results. And it's still a rather uncertain investment.
If you hire an external agency, on the other hand, the know-how is guaranteed by default and the ramp-up is much faster. It is up to every individual case to make numbers about which option is the right one for you.
2) The expertise of the sales agency
Sometimes, you might need to hire just one good person, but even if you aren't under time pressure, you might not find the expert in the long run at all, just because you don't know how and where to look for them.
OR, on the other hand, you might have very little time to do the hiring so you might end up getting someone who acts like a pro on the surface, but their skills prove to be underwhelming. Hiring such a person and having them do pretty much anything to your business might be a huge risk.
An outsourced sales agency already has the expertise you need.
And they can transfer it to you. They've been there, done it all and they can assume a more objective point of view when selecting the right sales guy for your company. The key is not to bet and hire one single sales champion and be doomed in case plan A doesn't work out.
3) Multi-disciplinary overlap
The pros in the agency can have different specializations - from hiring and building a sales team, through setting up the sales departments to implementation of the necessary technological stack that allows you to run the growing business not just today or tomorrow, but to get it ready for the long run (specifically low-code solutions can grow with the company forever).
Also, the team can already have some great people on board, such as a Head of Sales with experience, vision and drive. Such individuals can come up with specific assignments, realizing that time is precious.
When do companies realize they need to outsource sales?
Sales agents are often hired by companies that “disrupt” the market.
They make big changes in a short timespan, therefore, they can leverage the main goal of a B2B sales agency, which is to accelerate sales. The segment that mostly fits this description is technology and automation. They sell their products and services with a high margin, therefore, they can afford to pay for a team of experts who will enable them to accelerate more, and further grow their revenue.
Generally, the main question is the mentality of the company, but to simplify it, there are 3 main situations when a company usually decides to outsource sales management:
1) The desire to grow faster.
These are the companies where the management realizes that closing deals is the only thing that brings money to the company. They want to expand further and faster and they understand the need to professionalize the business.
The needs usually are:
- training internal salespeople,
- setting up the sales process and methodology
- setting up sales tech-stack with a simple goal: to (re)start the predictable growth and gain more control over the whole sales cycle.
2) Facing a transition or change within the company, such as:
- moving from a licensed model to a SaaS model
- from offline to online (or mostly online)
- new CEO, Sales Director or Chief Revenue Officer
- the founder is the only sales guy for now and would like to start hiring (and start doing it right from the very first moment)
Similar transitions pose a big change for sales reps, the company structure, and have a lot of consequences. The compensation plans and sales processes change. Pulling this off is not just about the right settings, but also about helping the people affected to adapt.
3) Products created “by accident”.
This part is mainly for the medium to bigger size companies that are in a comfortable position on the market and are looking for growth opportunities. Or they might be looking to switch to product sales.
You know the deal: you've developed a new software for your customer, but suddenly you realize that there could be demand for this on the market and you could sell this software repeatedly. Selling a scalable product makes a company look sexy for sure.
To sell well and generate revenue, you need to significantly strengthen the acquisition, because you are looking for totally new customers.
In this case, if you try to do it on your own, disappointment will very likely come, because in the first year, even if you do everything right, you'll earn virtually nothing. And when you compare it with quick money from selling your usual services, then there's that sour aftertaste.
On the other hand, you've already invested a great deal of money and time into developing your product, so you don't want to throw it away.
4) External Investment
Similar to the first use-case, just with a broader push on the growth. Often, the expectations are quite high, it's not unusual to see the company is supposed to double or even triple the revenue in a year.
After the investment, the most valuable resource happens to be time.
The company needs to do the right things and A/B test the assumptions on the market. The faster the loop is, the better. This period is called preparation for scaling and strategic business leaders have to think a few years ahead. Will the current technological stack work well enough when they grow 5 times in terms of customers, employees, revenue? Can they onboard the salespeople, so they get on their quota in 3 months and not in 6? In the end they want to create the revenue machine which they will simply copy later on - and scale.
The leaders of companies reach out to sales consulting firms once they understand that they cannot do it on their own.
Differentiation: services vs. product companies
Companies that have grown into sales services often have several important customers and new ones tend to be recommended. Sales then take place mainly through their expertise, a deep understanding of the problems and needs of the customer. That's the way they sell. In this case, they need to help systematize and pass on business practices and approach from the management and leaders to the rest of the team.
Usually a few months of cooperation is enough, where we solve the skill-set, the establishment of the business/ sales process, but also the terminology or the ideal customer. In addition, leaders are then given a fresh third-party perspective, which helps them make further strategic decisions about how the business and the direction of the company will develop.
In contrast, product sales are usually a rather structured issue. It is possible to maximize the usage of the process, measure what works and set up the whole sales machine accordingly and prepare it for scaling.
If you know who your ideal customer is, what interests them, and you can guide them through the selling process from their own perspective, you are ready for scaling.
New salespeople are not forced to walk the trial / error path, on the contrary, you pass on your know-how to them, your tools and teach them how to use it all correctly. It can save a lot of time and nerves. Your sales guys will be happy because they'll be able to reach the results faster and thus, reap better rewards. They'll also be motivated to stay in the company, if they are well onboarded and on the numbers fast enough.
When is it not the right time to outsource?
1) If your goals are still foggy or it's just too soon.
As the founder of the start-up, you simply have to get the first deals on your own. Not only because of the traction for the investor but also because the founder better understands what the customer really needs. The market will give you the best feedback on which direction to go.
What determines whether the sales agency will be useful to the company is the mindset and goals of the CEO and decision makers. The agency will cooperate if they are convinced that they can deliver what they agree on with you. In case the ongoing goals are not met, the agency is the first to figuratively raise their hands and deal with the customer.
2) If the economic p.o.v. doesn't work.
If the revenue per customer is in e.g. 100 dollars per month, it might not make much sense for the business to have an Outbound sales specialist (the one that reaches out to “cold” customers) or even an ousourced sales agent. There are other models to set that up, such as inbound sales, driven by B2B marketing. Or even self-service sales. How come? Because sales reps are expensive. Their OTE will be max. ⅙ of what they bring to the company (can be less if selling SaaS with low churn).
If you're talking to an honest agency, they will not go into cooperation with you unless you qualify for it. If you are expecting a miracle, there might not be a solution.
Also, it's a good idea to ask yourself if you're not selling your stuff too cheap? The answer? If you don't regularly get complaints about your high prices, then you most certainly do.
Wrapping it up
Outsourcing sales activities can benefit you greatly, but you'd better first ensure that your company turnover is big enough and that it actually pays off.
If you're a fresh company, deal with it; you as the founder have to be the one to close deals at the beginning. As you grow, you might reach a point where you'll want to grow faster and this is where external agencies might come in handy. However, you should only take this step after you've established a somewhat scalable, functioning business model.