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Outsourcing the Sales Function

Written by: Greg Bautz

Article Overview: While many companies have embraced outsourcing for their financial and information technology needs, few have considered outsourcing sales. But trends are changing. According to research from the Dun & Bradstreet, sales and marketing is now the third most active area for outsourcing after finance and IT. According to published reports by Dun & Bradstreet, outsourcing of field sales is expected to rise fivefold over the next two years.

Outsourcing the Sales Function

Outsourcing has been around for decades. The evolution of the industry actually started as time-sharing on mainframes. Over the past decade IT Outsourcing has become prominent. For the past 5 years, the Business Process Outsourcing (BPO), which includes Sales Outsourcing, has become the most effective method to provide the greatest Return on Investment. By outsourcing the sales function, you do what you do best and that is not running a Sales Department.

Define Sales Outsourcing

It is the transfer or development of sales resources, including overhead expenses, such as recruiting, payroll, insurance, commissions, equipment, training, coaching etc..; along with management responsibilities to an outside organization. The outside organization, the sourcing provider, has the responsibility to manage the sales team to meet client expeditions which include and are not limited to efficiency, revenue and profit growth.

Benefits from Outsourcing Sales

Most outsourcing decisions begin with cost-cutting – but rarely end there. Once the efficiencies of outsourcing are in place, companies find ways to use them for a broad range of improvements to processes and performance.

Reduced Direct Costs - As mentioned above, the economies of scale experienced by outsourced Sales and Marketing providers allow them to offer equivalent services at lower direct costs than in-house approaches. What’s more, outsourcing partners are free to use creative cost-cutting approaches unavailable to companies like yours: locating in more favorable employment markets, assembling full-time coverage from part-time or seasonal employees, and so on.


Reduced Indirect Costs - The costs of in-house Sales and Marketing support are often
Underestimated. Employees need to be recruited, trained, managed and equipped – and
turnover may be high. At Sales Surge, we face these problems head-on, and solve them
for our clients. Freeing your Sales team from low-value activities is a significant reduction of hidden costs.

Relieved of the need to manage day-to-day administration and support, they are free to
focus on generating revenue – the reason you hired them.

Reduced Opportunity Costs - Focused outsourced programs improve sales coverage.
More leads are qualified, geographic regions or channels are covered in greater depth, and
more sales can be wrung from secondary sources. In these and other cases, sales are recovered from previously overlooked sources, improving sales performance at low marginal cost.

Fixed Costs Become Variable - In fast-changing markets or companies, outsourced solutions’
variable pricing helps during expansion or contraction. Outsourced programs grow
to meet opportunities or mergers, or shrink when the market turns down. And if they outlive
their usefulness, they are much easier to cancel.

Business process improvements - Quantifying current performance – necessary for any
outsourcing program - reveals gaps in measurement, and points the way to simple but powerful remedies. If you don’t already measure lead qualifications, partner turnover, or cost of sales by market and channel, putting metrics in place will improve performance. Focus and Expertise - Sales and Marketing outsourced specialists live in the market–knowing their surroundings is a matter of business survival.

Agility - Outsourced specialists design their technologies and processes to scale up quickly,
so they can always say “yes” to new business. Their clients benefit from all this reserve
capacity In case of acquisition or change of direction, a manufacturer can scale up or
redeploy its efforts faster through a partner than it could operating alone. Their flexibility and
agility also make outsourcing ideal for experimental and pilot programs.

Service Quality and Customer Satisfaction - Manufacturers are acutely sensitive to customer
complaints about service providers, and service providers know it. They stay in business by
outperforming comparable in-house programs, and putting measurements in place to prove it
Quote.

The data available on service outsourcing – mostly from surveys – reveal a boom. Gartner,
Inc. predicts business process outsourcing (which includes Sales and Marketing) will grow
from $110 billion in 2002 to $173 billion in 2007 – an annual compounded rate of 9.5 percent


The bottom-line,if Sales are not your core competency, then seriously consider outsourcing so you can focus your time and resources on your core company values and capabilities. Sales outsourcing OPTIONS include Sales Management of your existing sales force OR an ENTIRE sales force dedicated to your company along with years of management experience, proven processes and industry contacts, at a fixed monthly expense, which allows your company to effectively manage the cost of sales.

Related Articles
  Outsourcing ‘has become a mandate’ for recession-hit firms
  Truth in Numbers
  Top 5 Qualities in an Outsourcing Company
  38% of software development professionals use outsourcing
  Outsourcing Payroll Processing or use in house payroll software

Article Tags: business process outsourcing, business process outsourcing bpo, cost cutting, economies of scale, employment markets, equivalent services, house sales, indirect costs, management responsibilities, outsourced sales, outsourcing decisions, outsourcing sales, overhead expenses, payroll insurance, profit growth, sales outsourcing, sales resources, seasonal employees, time coverage, training coaching



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