Technology companies are familiar with the idea of ​​outsourcing aspects of their business. There are many Business Process Outsourcing (BPO) companies that provide back-office functions like HR, accounting and finance, as well as front-office functions like customer service. The benefits of Business Development Representative (BDR) Outsourcing are also well documented, as companies can leverage experts who have built businesses around these specific processes (and who can often provide them at lower costs), allowing them to focus on improving what makes your business great.

Although the idea of ​​Outsourcing is not new, many companies are reluctant to hire third-party sales providers, especially in Business Development. There are many reasons for this, however, companies could be missing out on a great opportunity.

Brand Reputation

A sales development representative is often the first point of human interaction a prospect will have with your brand, and the importance of representing your brand in the right way is paramount. For this reason, it’s understandable that companies might be a little hesitant about entrusting such an important role to a third party. As we said above, one bad interaction with a BDR and the credibility you’ve worked so hard to build can crumble.

That said, many of the same companies are comfortable working with creative marketing agencies or public relations (PR) firms to help define and represent their brand. These agencies draw on decades of experience and are experts in designing and executing your brand strategy. This partnership also allows companies to leverage larger teams on demand rather than maintaining large numbers of employees in the creative department.

The same can be true with the right Sales Development partner. Experts in the Sales Development space draw on years of experience building and managing teams in many different markets. As a result, guidance on how to represent your brand and the appropriate channels to do so comes from a wealth of knowledge that may not exist internally.

Security and control

One of the reasons a technology company might think twice about outsourcing its SDR function is security concerns and a lack of overall control. Why would you give a third party access and control over extremely sensitive customer and prospect data? This seems like a huge risk, which leads many companies to keep the function in-house and their data under their supervision.

That said, companies are now so accustomed to the SaaS model and its benefits that it’s hard to imagine doing business any other way. Imagine maintaining infrastructure, software updates, and huge IT closets full of servers. So 1990!

The flexibility and scalability of the SaaS model far outweigh any perceived security-related risks.

The same is true when working with a quality outsourced service provider. With a proper contract structure, the security risks of working with an outsourced vendor will generally be minimal compared to an in-house team.

Cost-Benefits of Business Development Outsourcing

When you hear about a company outsourcing a function like a call center or IT development, it usually evokes two assumptions: it will cost less and the quality will be lower than an in-house team. And that may still be true – it all depends on the company you end up working with and the expectations you have regarding the cost you pay.

With the right company, outsourcing a BDR team will cost less than building it in-house (as shown above), and quality can really increase with the right training and experience. These are all things you can (and should) discuss with a company before entering into any type of contract. Transparency around pricing and expectations will eliminate any gray areas around the assembled team.

It’s time to abandon the stigma associated with outsourcing your sales development team and start realizing the many benefits that business development outsourcing offers.

Finally, yours is a technology company, not a new business development company – BDR. Leave new business development to the experts.

Having a Sales/Business Development team to generate qualified leads is a proven method of generating predictable and sustainable revenue.

However, the cost of creating such a team can easily be miscalculated. When deciding whether to build an in-house team or outsource the function, it is important to consider the total cost of hiring, training, managing and hiring this team.

Next, we compare that of building an internal team with the cost of an outsourced team. The cost of each component required for an effective team of representatives is listed and explained.

• Sales Tools
• Additional Hiring Costs
• Salaries (Sales Manager)
• Sales Development Salaries
• Business Development Salaries

How does outsourcing offer cost-benefit?

• Recruitment and Training:

Attract the best talent It’s harder than ever. Building a recruiting pipeline is expensive and the interview process is time-consuming. Additionally, developing a highly effective and repeatable training program is resource-intensive.

These costs fall on the outsourced company, which systematized these processes as part of your core business, in order to minimize recruitment and onboarding costs. Digital Selling also uses its own established training program to develop highly qualified professionals and maximize results.

• Management:

Companies generally have two options for managing their business development team:

1. Hire an inside sales manager to provide ongoing support and maximize results for the business development team.
2. Using the (expensive) time of a Director or VP to freely manage staff between regular duties.

As an outsourcing company, Digital Selling is able to substantially decrease this cost by scaling with in-house sales managers who can manage multiple groups of projects.

• Employee costs:

Employment taxes, employee health benefits, payroll costs, work space, computers and phones are all expenses that an in-house team would need to add, but with outsourced companies it is built into the design.

• Sales tools and enablement CRM platforms, high-quality data services, prospecting aids, and sales aids are necessary tools for effective business development teams. They are easily scaled by third-party companies, and Digital Selling uses best-in-class for each component of the lead generation and qualification process.

THE TRUE COST of your SDR team

Benefits of SDR Outsourcing to Consider When Creating the SDR Role

💡 According to the article“How much does an employee cost?” by Joe Hadzima There are a handful of unforeseen costs that come with hiring an employee. He quotes Basic Salary, Recruitment Expenses, Taxes, Benefits, Space and Equipment as the main external factors to consider when hiring an employee. Each comes with its own challenges and associated costs to consider during your employee search.

The costs mentioned in this article are often overlooked, resulting in an erroneous assessment of value.

Below, we discuss expenses to consider when building a team of SDRs and how much you must expect to spend if you create the function internally.

Sales Representatives: Salary

One obvious cost of an SDR team that everyone recognizes – you have to pay your reps! And it’s not just base salary, but also on-target earnings (OTE). This value includes extra costs like your commissions, contest winnings, incentive programs… it can add up quickly, especially if you have a good reputation (which you want – it’s expensive to hire bad talent!).

Manager/Coordinator Salary:

Most of the time, companies have two options when it comes to managing their SDR team. They can:

1) Hire an Inside Sales Manager to provide ongoing support and maximize results for the SDR team, or

2) Use the (much more expensive) time of a VP or Director to manage the team in addition to their broad responsibilities.

Whether hired or promoted from within, hiring a manager is a necessary cost to maximize the success of your SDR team.

Human Resources:Hiring costs (~40% of salary):

Employment taxes, health benefits, payroll costs, workspace, computers, phones – these are difficult costs of an SDR team that are unavoidable when hiring.

Plus, attracting the right talent to your organization is no small cost. Recruitment expenses, along with the lengthy interview process, can be expensive. Considering that it is still necessary to train these new representatives means paying for a training program and taking time away from current employees to train new SDRs.

Sales tools:

Modern sales tools are packed with technology: CRM platforms, high-quality data services, outreach tools, sales intelligence technology… all are necessary expenses when building an SDR team.

If you want your reps to succeed, you need to give them the tools to do so.

Office costs: (space, hardware, supplies)

Space:

Renting office space is expensive, but it can be difficult to measure the impact an individual employee has on rent. Fortunately, shared office spaces can give us a better idea of ​​how much cost we can associate with a desk in a given location.

Hardware: 

For most companies, hardware costs are built into the internal hiring process, but as your company continues to grow, the need for cost-effective solutions becomes a necessity. Until laptops start growing on trees, this is something you’ll have to provide.

Supplies:

Finally, you have to deal with the increasing amount of office supplies your SDR requires. Besides the obvious – like a table and chair – they will use your notebooks, pens, paper towels, kitchen utensils, etc… and this can add up significantly over time.

All of these costs of an SDR team add up quickly. You can expect some clash between budgeted vs accomplished – especially when you may have initially budgeted X to build your team. Hidden expenses like workspace/equipment, manager salary, sales enablement tools, etc. actually increase that number.

Often you are choosing between spending real money (buying tools, equipment, hiring a manager) or the opportunity cost of existing resources – using current employees to train new hires, giving managers double duty.

Alternatively, a standard three sales rep program – Sales Development with Digital Selling costs below $ 36.000,00/year. Over 40% of the economy with immediate effect, organizations can reallocate funds to improve their products/solutions and catalyze growth. Cutting overhead costs (and the headaches that accompany them) through outsourcing can be a viable and healthy alternative.