While our usual impression of outsourcing applies to BPOs and IT companies, there is actually a set-up called Sales Process Outsourcing in existence, which means hiring a third party service provider to handle the selling of your products or services. With this arrangement, you and your internal teams can concentrate more on other aspects of the business that really need your knowledge, skills and expertise such as manufacturing and production.
Types of Outsourcing Models
So if you are contemplating on going the sales process outsourcing route, it would be prudent to start by knowing the types of outsourcing models you will have to choose from to suit the type of business operations you have.
Keep in mind that having a clear distinction of the different types of outsourcing models can aid in boosting your collaboration and direct growth of your business relationship over time.
Basically, there are three outsourcing models duly categorized by location, relationship and pricing.
1. Location Based Outsourcing
This model is actually self explanatory. From its name, you can tell that it refers to the location or distance of the service provider applicable to you.
This means having your outsourced personnel report to your office, working with regular employees. The advantage of this arrangement is that your outsourced personnel can learn about your company’s system and processes quickly.
From the word onshore, this refers to outsourced personnel within your state or country. The advantage to this arrangement is that there are no problems like language barriers or cultural differences at all.
This means your outsourced personnel are hired from countries outside of your own but within a similar time zone. With this set-up, there is a possibility of problems in terms of linguistics but then again, it is still a more affordable arrangement.
Opposite to nearshore, offshore outsourcing already involves getting your outsourced personnel from more distant locations or nations from another continent. This type of set-up is attractive if you want to do away with high labor cost, going for one that is less expensive, but still maintaining the quality service you are known for.
Better known as multisourcing, this is an arrangement you will want to use if you want to extend your outsourcing to service providers coming from different locations. Among all the five, this is dubbed as the “best of the breed” because selecting more than one service provider ensures that there is a designated team for each of your functions.
2. Relationship-Based Outsourcing
The second outsourcing model is centered on the ownership and responsibility of both the client and their outsourced provider and how they will handle these aspects throughout their partnership duration.
Staff Augmentation Model
Quite similar to onsite outsourcing, this arrangement allows the outsourced personnel to join your regular employees in terms of internal programs management. With this, the client can take over and given the control reins of all outsourcing projects from beginning to end phases.
Managed Team Model
With this set-up, you, as the host, and outsourcing provider come into agreement of sharing the responsibilities and designate which tasks each of you will be responsible for. You, as the client. also have control over the latter in order to make sure that your desired outcome for this project will be achieved.
Project – Based Model
This is handing all work to your outsourcing provider. When all briefs and project requirements have been endorsed, the outsourced personnel gains ownership of the project throughout the entire contract duration.
3. Outsourcing Pricing Models
As business evolves, so does the pricing structure of sales process outsourcing services. This is why pricing frameworks are an essential part of the different outsourcing models. These outsourcing pricing models allows you to have real value for money with your outsourcing projects:
Fixed Price Model
This is the probably the oldest type of pricing model wherein you, as the client, are given a standard rate (includes charges of work venue and tools), largely depending on your preference.
Sounds favorable to you right? Actually, this involves high risk because the outsourced provider will be paid only during completion of the entire project. Thus, it is common for them to ask for a more flexible arrangement which involves paying everytime a specific milestone is completed.
Time and Materials Model
Mostly common among IT projects, it has companies submitting proposals to you, as the client, in hopes of winning the bid for your project. With this model, the outsourcing personnel will be doing the project under your supervision, which would sometimes have them working in-house, together with you and your employees.
Incentive – Based Model
If you want to give your outsourced providers a boost in terms of morale and increasing their productivity, you might want to try this model. This would have you, as a client, giving them add-ons on top of the agreed rate, should they go beyond expectations of meeting goals indicated in the contract.
Shared Risk-Reward Model
It, more or less, works like the prior model because you would still be giving a bonus when a certain milestone is achieved. Moreover, there is encouragement given to the outsourcing provider in terms of concept formulation because financial risk between you and them are shared.
Outsourcing Your Sales Process: Its Pros and Cons
As mentioned prior, sales process outsourcing involves contracting third party providers and having them handle certain functions and processes of your business. While it does have its benefits, it also comes with certain risks. That is why it is important to know each side of the coin before making the final decision of going this route or not. Here are some of its pros and cons:
More focus on core tasks.
With the addition of outsourced personnel, you can concentrate more on the strengths of your business; thereby, also allowing your internal employees to concentrate more on their core duties and responsibilities.
Increase in efficiency.
In the process of selecting your third party provider, you would naturally go for the one that has good background and experience in the services that you would want them to deliver to you right? It is inevitable therefore that you will have increased efficiency because the people you hired specialize in this specific service.
- Better cost control.
You get to save more on cost when you go for sales process outsourcing because you are not obliged to give any other payment or benefit except for what you agreed on in your contract. Thus, you can have more budget for other worthy investments related to your business.
- Increase in reach.
Depending on the nature of the service you are hiring them for, your third party service provider has the necessary facilities needed to produce a great output. Usually, these are things that you do not have. For example, if you are outsourcing a photoshoot of your products and services, the service provider is sure to have the right lighting and equipment needed to make great shots.
More competitive advantage.
Of course, since you are hiring outsourced personnel who are well-trained and are basically experts in the service that you need them for, the output of such a project is expected to be at par or even beyond accepted market standards.
Delays in service delivery.
Regardless of whether it is intentional or not, there is always the possibility of delays in meeting the deadlines of deliverables.
Compromised confidentiality and security.
Since there are now third party personnel involved, there is always the risk of confidential information being exposed or danger of security being threatened.
It is standard procedure for the contract to be read and reviewed a number of times before both parties affix their signatures; however, as time goes by while doing the project, there may come a need for certain conditions to be amended; but, because of the rigidity of the contract, this is not easy to do.
There may be unavoidable changes within the management of your service provider that could cause friction between you and their assigned personnel to work on your project.
The risk of third party service providers, especially those who are still starting off, is they could go out of business in the midst of the project.
How to Do Sales Outsourcing the Right Way
When we talk of sales process outsourcing, we mean delegating some parts of your sales processes to third party providers. Such a move is done when your sales team is not equipped to handle all procedures involved because they lack resources, time or expertise.
When you outsource sales, your sales team’s flexibility is increased as they can now concentrate on more complex tasks or strategies that require their knowledge and skills.
So how do you go about Sales Outsourcing? How does this work? This list of DO’s and DON’TS can help give you an idea:
Placing more emphasis on capabilities than cost.
In assessing a potential outsourced sales provider that could build up and extend your sales team, you need to be able to clearly explain what services and outcomes you need and be able to comprehend the potentials of the partner you are going to align with.
Once you are able to determine your business needs properly, it is essential that you are able to understand the processes, tools and expertise of the sales provider so you will know what benefits you can reap. It would be good to have them prove this to you.
During your screening process, here are some questions you can ask:
- What are your core sales expertise? Are you targeting B2B or the consumer?
- Can you outline this according to my channel and demonstrate how knowledgeable you are about it?
- Can you show your company’s proven track record in the industry?
- How will you go about in supporting and enabling expansion into a new target market?
- What are the tools and technologies you have to ensure sales acceleration? Why use these?
- What can you bring to the table if I select you for the services I need?
Playing an active role in your working relationship.
Like any relationship, the partnership you have with your outsourced sales provider needs to be nourished in order to flourish. Thus, the importance of being proactive in this newly-formed business alliance. Continued communication is the key for a seamless partnership that will benefit both parties in the long run.
How will you be proactive? Here are some tips:
- Have a clear understanding of their selling process from lead generation to deal closing.
- Train your outsourced sales providers the way you did your regular employees. They must be knowledgeable of your company’s goals, processes, strategies and KPIs.
- Furnish your extended team with what sales enablement materials you have available so they will have references and won’t need to spend much time in researching and recreating content.
- Communicate with them on a regularly scheduled basis so you stay in the loop with progress of their performance and be aware of where they are having difficulties so you can discuss resolutions.
Ensuring the alignment of sales and marketing.
Ensuring a constant alignment with your outsourced sales provider is crucial to make sure that they stay connected to your business’s marketing strategy. And because they have the capability to help each other in achieving individual performance metrics more quickly, it is important for your sales and marketing team to stay aligned so that they are working towards the same goals.
How do you ensure this alignment?
- Have key members of your internal marketing team regularly interact with your outsourced sales provider. The former have more interactions with customers and are sure to give valuable insights to the latter.
- Have your marketing team and extended sales team develop buyer personas together make sure that they are targeting the same market. If the former already has this in place, have them share it to the latter.
- Have your outsourced sales provider and marketing team hold regular meetings wherein the former can report their findings to the latter. Shared insights from the extended sales team can be used by marketing to improve processes as they continually work on achieving the same business goals.
Getting lost in the process of selection.
With so many firms offering their services, selecting an outsourced sales provider can indeed be daunting and you could get overwhelmed at the first task of picking which of them best fits your company’s goals and culture.
These are suggested questions that can guide you in your deliberation:
- How well was the service provider’s thought leadership and creativity during their presentation? Did they go beyond what was expected and shared their own ideas on how I can achieve my business goals?
- Do they understand the services I am expecting? Do they specialize in the specific area/s I need help with?
- Is there alignment in our KPIs? Do they have the metrics and evaluation tools to measure results?
Expecting immediate results.
Give time for your extended sales team to learn the basics, systems and processes of your business. Pretty much in the same way you give a number of weeks to train your internal team, do so with your new partner.
Keep in mind that generally, the number of days it takes for a new team to learn the whats, whys and hows of your business is 90 days and only then can they begin delivering results.
Engaging with a basic call center instead of a true sales firm.
Do not get confused with call center people playing the role of professional sales providers. To be able to tell the difference, remember that the former’s focus is either inbound general customer service or technical support while the latter’s focus is directly driving revenue.
Top 3 Effective Sales Outsourcing Strategies
Among the sales activities, what is mostly outsourced are lead generation, launch and sales of product or service lines and management of difficult to reach segments.
In order for all these to be successful, sales process outsourcing needs to have effective strategies. Here are our picks for the top three sales outsourcing strategies that you can apply to your business:
Have a clear understanding of your best customers’ profile.
This strategy paves the way for all strategies that follow. Being able to understand the profile of your best customers gives you and your extended sales team the right direction to take in realizing your overall sales goals. To do this, you can make an Ideal Customer Profile which can give you valuable insights so you can target the right market.
Have a clear establishment of Key Performance Indicators (KPIs).
It is wise to be clear about the KPIs you want and expect from your sales extended team. That way, the latter would also be guided on how they will go about their methods in achieving your goals. Moreover, as these serve as the basis of the service provider’s team performance against your sales targets and business goals, there is no room for any disputes or disagreements because standards and expectations are already set.
Have a clear evaluation of your sales process.
After establishing your KPIs, have a critical look at your current sales processes and with the agreed KPIs in mind, evaluate which of these are best retained and which are best discontinued for the reason that it is not applicable to the new set-up anymore. These changes may take some adjustment but as with the ever changing needs of the market, so do the sales processes of meeting these needs evolve.
Outsourcing Sales and Marketing: Why Do They Matter
As companies venture more into developing strategies for their growth, management teams have come to realize that outsourcing sales and marketing is a proven and effective way of achieving revenue targets.
With marketing and sales process outsourcing, you can reap significant benefits like lesser costs, significant growth and increased efficiency. This is where Hyperio.Ai enters the picture as your ideal service provider who can work on edging out your competitors and achieving sales goals while you and your internal team can focus more on core tasks and responsibilities that need your knowledge, skills and expertise.
Here is a glimpse of what you can accomplish with Hyperio.Ai handling your marketing and sales process outsourcing:
Increase in Sales Revenue
With Hyperio.Ai, which has the background and experience, focusing on the marketing and sales aspect of your business, sales growth is both inevitable and expected.
Focused Sales and Marketing Force
Marketing and sales process outsourcing would mean contracting a company whose specialization lies in driving growth of sales revenue. Count on Hyperio.Ai to be the team focused on the sole objective of selling to bring in revenue gain.
Having a third party service provider gives a certain flexibility level that if attempted internally, may be too expensive and time-consuming. It would be assuring to know that Hyperio.Ai is capable of handling sudden changing sales needs and quick in coming up with programs or shifting resources as necessary without sacrificing results and still keeping cost low.
Bank on Experience.
In selecting your service provider, do not go for the company that offers the cheapest price. Focus more on which has worked longer in the industry and bank on these years of experience. With customer acquisition techniques that Hyperio.Ai has mastered over the years, you are getting value for money with good results and deliverables submitted on time.