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SDR Outsourcing: Pros & Cons

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SDR Outsourcing: Pros & Cons
It’s no secret that companies struggle to find the right customers and connect with them… so, is SDR outsourcing the right choice for you?
Companies need to be willing to try new methods to connect with the right people, close more deals and generate more revenue. Successful companies are amazing at growing and selling their products because they have a good sales team working behind the scenes.
But what if your company can’t afford to hire a sales manager or train your own sales team?
That’s where SDR outsourcing comes in.

Outsourced SDRs help companies across various industries create a smooth and predictable way to sell their products. A recent survey found that 80% of US businesses surveyed want to outsource their sales because it can make their business more efficient and grow faster. Plus, they get the chance to work with experts.

So, should you hire an outsourced SDR team or have your own in-house sales team? Keep reading.

Table of Contents

What Is SDR Outsourcing?

What Is SDR Outsourcing
SDR outsourcing means hiring a third-party organization to provide sales development services for a company. These services typically include:
  • outbound outreach
  • lead generation
  • appointment setting

Different sales channels are used to find customers, such as cold calling, cold emailing, and LinkedIn social selling.

The main role of a Sales Development Representative (SDR) is to identify potential customers and determine whether they are a good fit for their client’s products. SDRs are in charge of prospecting and passing qualified leads to the sales team, who will then focus on closing deals.
SDR outsourcing can be a good way for a company to get more leads and find new business opportunities. It can help a company reduce costs and be more efficient by allowing them to focus on their core business activities.
Even though outsourcing your sales efforts can be a smart move, it is important to consider whether it’s the right choice for your business. Let’s look at both the positive and negative aspects of outsourcing SDR services.

Pros Of SDR Outsourcing

Outsourced SDR services can provide several advantages to businesses. Here are some of the key benefits:

It’s Less Expensive Than Hiring An In-House Sales Team

Outsourcing SDRs can be more cost-effective than hiring and training an in-house team.

According to Builtin, the average total compensation of an in-house SDR in the US is $81,614. Total compensation includes base salary and bonuses for a year. In states like California, however, total compensation can go up to $100,000.

Keep in mind that the salary for an in-house SDR can also include benefits such as health insurance, retirement plans, and paid time off, which can add to the overall compensation package. These additional costs can typically range from 25% to 40% or more of the base salary.
On the other hand, a typical outsourced SDR will cost a company a few thousand dollars a month, maybe a bit more, depending on the size of the project, industry, and other factors. It’s still a more affordable choice because it includes the onboarding fee, tech tools, and SDR Manager’s cost, among other costs.

KSquare, a company that provides digital solutions to both private and public sectors, is a great example of this. KSquare wanted to fill its sales pipeline quickly and efficiently while keeping costs low by using outsourced Sales Development Representatives (SDRs).

To support them, we provided a dedicated research team to create high-quality lead lists, a designated SDR, and an Account Manager. We also made sure our sales team received continuous training and coaching. Thanks to these efforts, the team helped KSquare generate an impressive $500,000 in revenue in just nine months.

Access To Specialized Skills and Expertise

Outsourced SDR companies specialize in identifying and engaging potential customers, nurturing them through the sales funnel, and ultimately converting them into paying customers. They have the experience and knowledge to execute sales strategies effectively.

Shouldn’t you let experienced salespeople handle lead generation, prospecting, relationship building, and booking meetings with qualified decision-makers? While prospecting techniques and relationship-building methods may vary among industries, sales basics remain the same everywhere.

On top of that, outsourced SDRs can also provide additional support to your B2B sales process. They can:

  • Provide additional capacity to handle a higher volume of leads and prospects
  • Guide the existing in-house team on how to move leads down the funnel to close deals
  • Identify new markets or industries to target

Predictable and Scalable Pipeline

sdr outsourcing allows to build a Predictable and scalable pipeline
Converting leads to opportunities in a predictable, scalable, and repeatable way is no easy job. When you connect with leads, you’ve only got a few seconds to spark their interest and book a meeting with them. It requires a great amount of research, a/b testing, constant training, and coaching.
Outsourced SDRs can create a smooth sales process from start to finish, whether it’s for a new product, a new market, or a new ideal customer profile. This allows you to scale your company’s sales efforts quickly and efficiently.

Years of experience and learning facilitate this process for outsourced SDRs. It’s easier for them to find what works, iterate, and adapt to changes in the market. Having a standardized, predictable, and scalable pipeline is the key to conversion.

Flexibility To Hire An Outsourced SDR Team When Needed

You Have Flexibility To Hire An Outsourced SDR Team When Needed
SDR outsourcing provides you the option to hire on a project basis or for a specific time (subscription model). This allows companies to adjust their sales efforts based on their needs and budget. Outsourced sales teams know how to rapidly adapt to your changing needs as your company grows or faces changes in sales demand.

Companies think about SDR outsourcing when they don’t have enough people or time to grow their sales process. Perhaps a company has a new service launch or project that will require more staff, or they see they have to let go of SDRs because of a budget change.

What’s important is that you will have the option to rehire them once your business starts recovering and you’re ready to focus on growing more revenue.

More Time To Focus On Important Business Activities

SDR outsourcing can free up time for your company’s sales team to focus on other important tasks, such as closing deals and building relationships with customers.

 

Prospecting is very time-consuming. It takes:

Prospecting is very time consuming

In summary, it can take 60 – 90 dials to get an appointment with a prospect, which is not an efficient use of an in-house SDR team that has other important activities to work on. And we’ve only discussed cold calling so far. We haven’t looked into the details of sending cold emails and doing LinkedIn outreach.

Giving your in-house team more time to build strong relationships with clients is vital. This helps you get more referrals, benefit from word-of-mouth marketing, and become a trusted partner in your industry. It’s a win-win for everyone.

Cons Of SDR Outsourcing

Communication Challenges

In today’s digital world, communication happens quickly; anytime, anywhere.
However, when your outsourced SDR team is not physically present with your in-house team, it can sometimes lead to communication difficulties. You must rely on messaging apps, emails, and video calls to connect, and these methods may not always be as immediate as face-to-face interactions.
Sometimes, small details can be overlooked unintentionally. This may result in misunderstandings and a lack of alignment between the two teams.

Conversations about ideas, strategies, and next steps can become a bit complicated. In-house teams also have to rely entirely on the information and feedback gathered by the outsourced SDRs during their interactions with prospects. Both sides must consistently communicate their perspectives and findings clearly to avoid confusion.

Desired Results Might Not Match Performance

Prospecting is very time consuming

Successful prospecting begins with careful research and a deep understanding of your target market. This research is organized into a document called the Ideal Customer Profile (ICP).

The ICP is a detailed description of the type of companies and industries that would obtain the most value from buying your product.

It defines the perfect customer for your product/service, which helps sales teams identify and target the prospects that are most likely to buy.

The problem begins when your company doesn’t have a well-defined ICP or fails to communicate it clearly to the outsourced SDR team. In such cases, your outsourced SDRs may struggle to perform effectively, resulting in fewer sales opportunities for you.

This also means wasted resources and a negative impact on your company’s revenue and growth.

Less Familiarity And Loyalty To The Company

An outsourced SDR team is dedicated to fulfilling their obligations to you and may even go the extra mile to secure meetings with qualified leads.
However, an in-house team works exclusively for your company. They are more familiar with your company’s mission, vision, and values, and they embody your company’s culture.
Some SDR outsourcing companies offer the option for their SDRs to participate in in-house meetings with their clients.
These meetings can include company-wide events, like all-hands meetings, or even social and fun activities. It helps outsourced SDRs integrate with the in-house team, spend quality time together, and feel like a part of the company. Then again, not all outsourcing companies will be open to it.

SDR Outsourcing: The Choice is YOURS

Choosing to outsource your Sales Development Representative (SDR) efforts is a significant one, and it comes with both advantages and disadvantages.

On the positive side, SDR outsourcing can be a cost-effective solution compared to maintaining an in-house SDR team, saving you money on salaries, benefits, and other expenses.

It also helps you establish a predictable and scalable sales pipeline, essential for achieving consistent results.

However, it’s also important to be aware of potential drawbacks. Communication challenges may arise when your outsourced SDR team operates remotely. Ensuring clear communication between both teams becomes essential to make sure both parties are aligned.
Also, if your company lacks a well-defined Ideal Customer Profile (ICP) or fails to convey it clearly to the outsourced SDR team, it will negatively impact your company’s growth.
Take the time to assess your company’s unique needs, budget, and objectives to determine whether SDR outsourcing aligns with your growth strategy.
If you believe SDR outsourcing is the right choice for your company, let’s talk about how we can help you build and maintain a predictable and scalable sales strategy.

Let’s chat and see if we’re the right fit for you.

You can learn about how we’ve helped other B2B companies build strong pipelines and grow revenue here.

want to accelerate revenue growth for your saas business? book a meeting with Shaheem Alam, sales expert.
got any feedback or questions about our services? Contact FiveRings Marketing
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