Sales management outsourcing is a tactic that small and large businesses can use to either:
- Scale up their business operations
- Hire a manager at a more affordable rate
- Access sales management talent they normally wouldn’t be able to
An outsourced sales manager can help businesses fill the talent void they’re experiencing when they don’t have the financial resources to hire full-time. There are many benefits of sales management outsourcing detailed later in this article.
What is Sales Management Outsourcing?
Hiring a single employee is costly, when all factors are considered and for sales management, that cost is likely to be even be higher than average, depending on the type of business, location and specialist needed to fill a role.
Sales management outsourcing can be defined as:
- Delegating sales management to a third-party
Businesses exist that have experience in sales management, employees available and all of the infrastructure necessary to do the work. For example, a company hiring an outsourced sales manager or fractional sales management will not need to worry about the hidden expenses of hiring someone, including:
- Training
- Outfitting office space
- Purchasing equipment
- Benefits
- Etc.
Instead, through outsourcing, it’s 100% possible to avoid these costs while slotting in a valuable asset to the sales team. Whether it’s a Sales Manager overseeing an inside sales team or Vice President of Sales, businesses can use the expertise of the outsourcing sales outsourcing to find employees that are a natural fit for the business.
Additionally, outsourcing doesn’t have to be 40+ hours of work each week.
Instead, it’s possible to hire an outsourced sales manager to fit within the business’s budget, whether that’s 10 hours a month or 40 hours a week. The freedom of outsourcing further benefits the business because the relationship can be short- or long-term, depending on the business’s needs. This can be done not only for fractional sales management roles but also other sales job titles, including CRO, VP of Sales, and Sales Enablement Manager.
Definition of Outsourcing Sales Management
Outsourcing sales management refers to the practice of hiring external, specialized companies or fractional sales leaders to handle the sales process of a business. This strategy enables organizations to focus on their core business functions while leveraging the expertise of outsourced sales managers like fractional CROs and a fractional VP of sales. Sales management encompasses various tasks such as setting sales targets, managing sales personnel, and designing and implementing sales strategies.
The decision to outsource sales management typically arises from the need to optimize resources, reduce costs, and scale the business. Often there is a lack of talent in house or an inability to hire someone full time. By entrusting this responsibility to external partners, businesses can ensure effective sales processes without the challenges of recruiting, training, and managing an in-house sales team.
Top Sales Management Outsourcing Responsibilities
Sales management is a vast field, and there are a lot of responsibilities that these professionals can take on for a business. Here are a few of the top responsibilities that an outsourced sales manager can fulfill:
- Sales Team Management: Full sales team management is offered. These professionals will oversee all members of the team to ensure that everyone is on track to reach their sales goals and has the tools they need to succeed. Due to the high cost of hiring in-house, outsourcing to a manager makes a lot of sense for the business. This could be a sales manager, Vice President of Sales, or CRO.
- Salesperson Coaching: Coaching can identify weaknesses in teams and even other managers. Through coaching, it’s possible to learn the skills needed to boost sales and better manage teams. This can include creating sales battlecards and call reviews.
- Salesperson Training: Training is different than coaching because it’s more in-depth. Coaching focuses on weaknesses, while training can help sales teams put processes and workflows in place to find success.
- Sales Process Review: A business’s sales process may need revamping and changes. Outsourcing this task to an expert can help refine the sales process, improve sales and lead to an immediate boost in revenue. If a sales process consultant or B2B sales consultant is not a fit, outsourcing sales management is a strong option.
- Closed Lost Deal Reviews: Sales close rates vary drastically from one industry to the next. In finance, close rates are 19%, meaning 4 out of 5 leads never materialize. The manager can review lost deals, find weaknesses in the closing process and increase close rates.
- Pipeline Management: Managing sales is almost as difficult as landing them. Outsourcing professionals can work through pipeline management to ensure the business can fulfill sales and manage the pipeline to meet consumer demand.
Outsourced sales management professionals can help with all of the above, or they can be brought into a team to help with a single task. The experience and flexibility that an outsourced sales manager offers can be invaluable for a growing business that doesn’t have an in-house sales manager to fulfill these duties. Fractional sales management and inside sales consultants can be great assets.
Benefits of Outsourcing Sales Management
Outsourcing sales management should never be taken lightly, but when the decision to outsource is made, it’s often because there are numerous benefits. Businesses can benefit from outsourcing in several ways, including:
10 Benefits of Outsourcing Sales Management
1. Save Time
Hiring someone is expensive. Depending on the source, it’s estimated that it will take at least three months for a new employee to truly fit in a business. However, some people say that this figure is grossly inaccurate and that it will take up to a year for a person to show the true value they bring to a business.
During fast business growth, time is money.
Businesses do not have the time to:
- Train employees for months
- Wait for a sales manager to fit into a team
When businesses need to accelerate growth and truly leverage a sales manager, they can do so with outsourcing almost immediately.
2. Save Money
Time and money go together. Hiring itself can cost upwards of $4,000, but there are even more costs involved:
- Benefits
- Training
- Office outfitting
- Etc.
Outsourcing teams have everything in place. Businesses pay a prearranged fee for the service, and there are no surprise costs. It’s far cheaper to outsource than hire in-house, especially if a business only plans on needing a sales manager for a short period of time or during a busy sales season.
3. Increase and Decrease Based on Needs
Hiring and firing employees that work in-house can quickly ruin a business’s reputation. However, outsourcing allows businesses to:
- Increase the manager’s hours based on needs
- Decrease hours based on needs
Outsourcing offers much greater flexibility and can better match the needs of a business. If a slow period comes unexpectedly, the business can lower the number of hours the sales manager works for the company or even stop outsourcing completely.
When sales pick back up, it’s possible to rehire the manager or someone else that may be a better fit.
4. Industry Expertise
Managers with industry experience are the best choice to hire. Outsourcing teams already have employees with industry experience in multiple fields. The benefit of outsourcing to someone with experience is vast, and they include:
- Easier integration into teams
- Faster help with sales
- Potential process revamping
Industry experience is crucial to a business’s success. The sales manager with industry knowledge can quickly turn sales around and help a company become profitable.
5. Sales Expertise
Sales expertise is another significant benefit. Hiring someone who works strictly in sales offers immense benefits for a business and allows them to generate sales faster and more efficiently.
6. Sales Strategy
Strategies make or break a sales funnel. Businesses need to revamp and update their sales strategies throughout their company’s lifetime to ensure that they’re maximizing profits. A sales manager with experience can:
- Come into a business and help create a sales strategy that has the best chance of success
- Update and revamp sales strategies to fix what’s not working and eliminate weak points
Additionally, these professionals will bring their review experience with them. Since they work with many businesses in an outsourcing capacity, they can:
- Analyze sales funnels for weak points
- Review closing to find where sales are lost
- Improve sales conversion rates
Businesses benefit from these adjustments immediately. Hiring in-house takes time, so being able to experience fast sales improvements is one of the advantages of outsourcing that cannot go understated.
7. Fill Management Gaps
Management gaps happen in business. A business may already have a sales manager, but the individual is out for three months. Outsourced managers can:
- Fill in for these temporary gaps in management
- Fill in for long-term gaps
8. New Management Perspective
Managers with different perspectives can drastically change the landscape of a business. Outsourced managers have the benefit of working with multiple companies, so they may have:
- New perspectives on sales
- Out-of-the-box ideas
New leadership can be game-changing for sales teams, especially if the team is in a “rut.”
9. Bring in Fresh Leadership
Fresh ideas and leadership are welcome. Oftentimes, managers don’t know where things went wrong after years of positive sales and success. A new leader can help reinvigorate teams and lead to more, faster sales.
Stale ideas and leadership are a problem in every business, and it’s certainly possible for some of the current leaders in the business to still be among the best.
However, even the world’s best sales managers benefit from fresh leadership or ideas. Growth occurs when new ideas are presented, and it’s certainly possible for an outsourced manager to work alongside current managers or sales agents to help them develop and expand on the new ideas they present.
10. Structure New Compensation Plans
Finally, the outsourced manager can help teams structure new sales compensation plans that make more sense for the business to help drive the right incentives so salespeople like Account Executives will be happy with their OTE.
Businesses considering sales management outsourcing should spend the time to analyze the benefits that the manager will bring to their business. Oftentimes, the benefits of outsourcing far outweigh the drawbacks.
The low commitment and ability to work with someone that has a wealth of experience in sales management can be invaluable for a business.
| Expertise Area | Benefit to Business |
|---|---|
| Sales Techniques | Implement proven sales methods to increase conversions |
| Market Knowledge | Identify and capitalize on emerging market trends and niches |
| Sales Technology | Employ cutting-edge tools for efficient sales processes |
Sales Management Outsourcing vs. Full Time Hire
Outsourcing versus hiring full-time will always be a discussion point among business owners. There are times when it makes sense to hire full-time. There are also weird periods where there’s a need for a manager, yet the business doesn’t have the cash flow consistency needed to hire full-time.
This is where outsourcing vs. full time hiring often makes sense:
- Salary. Full-time salaries are a long-term commitment. Outsourced managers often have a lower salary or rate, and there are no additional costs, such as worrying about health insurance or contributing to a retirement account.
- Flexibility. Remaining flexible in business is vital, especially when first starting a business. The ability to scale the hours of the outsourced professional up and down ensures that the business has the talent they need without a long-term commitment.
- Capacity. Hiring the best manager in the world is a challenge if a business can’t fully commit to a long-term contract. Outsourcing is a good fit for a business that isn’t ready to hire full-time either because of a lack of cash flow or growth stagnation.
- Options. Outsourced managers can be brought on full-time if necessary.
Outsourcing sales management may not be the solution for every business, but it’s a good fit for many. There are always reasons and justifications for hiring full-time or outsourcing. Business leaders and stakeholders need to weigh the pros and cons internally to understand which option is best for their business at this moment in time.
It’s a lot easier to start and stop working with a sales outsourcing service provider because a business isn’t committing to a long-term contract. Read our guide on fractional sales management vs full time sales management.
| Expense | In-House | Outsourced |
|---|---|---|
| Salaries and benefits | High | Lower |
| Recruitment and training | High | Minimal |
| Operational costs | High | Reduced |
Things To Consider Before Hiring a Sales Outsourcing Service Provider
Business decisions must be made carefully, and outsourcing is no exception. There are several things a business should consider before hiring a sales outsourcing service provider. These include:
- Experience
One of the first and most important things to consider is experience. How much experience does the provider have?
A provider that has been in business for many years will have processes in place to make the transition process as smooth as possible. They will know how to handle common hiccups and challenges faced when outsourcing sales management. Their experience allows them to quickly and confidently step in and work with your team.
Before hiring a provider, check their experience level. A new provider may not offer the same level of consistency as a provider with many years of experience.
- Skills
Does this outsourced sales manager have the skills your team is missing. Do they bring to the table a set of unique skills to improve the performance of your sales team? If so, they will likely be worth the money.
- Company Fit
Some early stage startups would not be a great fit for F500 sales management. Whereas, outsourced sales management that has experience with early stage companies can thrive. They understand the ambiguity. On the flip side, a manager from an established company will do well handling the red tape and processes of a bigger organization.
When Should You Not Use Outsourced Sales Manager
Although there are many benefits of outsourcing sales management, there are also some cases where it’s better to hire in-house.
- The Business is in a Very Specific Niche
If the business is in a very specific niche and requires highly specialized knowledge, outsourcing may not be ideal.
It may be difficult or impossible to find the right expert, or the cost of outsourcing may be higher than hiring in-house.
- Confidentiality Concerns
If a business relies on client confidentiality or trade secrets, outsourcing may be problematic. Non-disclosure agreements may help, but specific training may be required to ensure sensitive information is kept confidential.
There may also be cases where outsourcing can increase liability risks, although this is less likely to happen with a sales management position.
Why Do Companies Use B2B Outsourced Sales Managers?
Companies may use outsourced sales managers for a variety of reasons. While businesses will have their own unique reasons for outsourcing this key role, some of the most common ones include:
- An Outsourced Sales Manager is a Cost-Effective Solution
Outsourcing is often a more cost-effective solution compared to hiring in-house. The cost of hiring a new manager goes beyond the salary and benefits expenses. Businesses must also dedicate additional time and resources to:
- Recruitment
- Training
- Pre-employment background checks
- Equipment
- Onboarding
It’s estimated that hiring in-house will cost a business 1.24-1.4 times the employee’s salary.
When a business outsources this position, they gain access to an experienced professional who can step in and take on this new role with ease. As a result, businesses can eliminate those additional costs and risks of hiring in-house.
- They Need a New Sales Manager Quickly
Hiring a new sales manager will take time and resources. In some cases, businesses simply do not have the luxury of time and need someone to step in immediately. Companies like Revpilots can connect you with an outsourced sales manager in as little as 24 hours.
Outsourcing allows businesses to obtain the talent they need to continue operations quickly and with minimal disruption.
- Sales are Declining and Their Team Needs a Morale Boost
If sales are dropping without an obvious cause, bringing in an outsourced sales manager may help. New leadership may help shake things up and give the sales team a much-needed morale boost.
An experienced sales manager can step in to identify key issues that may need to be addressed and help get the team back on track to reaching goals and performance metrics.
How to Outsource Sales Management
A Step-By-Step Guide on How to Outsource Sales Management
- Identify your needs: Determine which sales management tasks or services you want to outsource and set clear goals for your company’s sales strategy.
- Research potential outsourcing partners: Conduct thorough research on potential third-party providers, considering their expertise in sales management, service quality, and reputation within the industry.
- Evaluate proposals: Request proposals from the shortlisted providers and carefully evaluate their plans of action, pricing, and other details pertaining to your requirements.
- Select the outsourcing partner: Choose the company that best aligns with your business goals, budget, and desired level of involvement in managing your sales teams.
- Establish a contract: Work with the chosen third-party provider to create a detailed and legally binding contract outlining the services they will provide, the expected results, and any associated costs. Ensure that both parties fully understand the terms and conditions.
- Monitor and evaluate performance: Regularly assess the outsourced sales management team’s performance and identify areas for improvement. Communicate with the third-party provider to ensure adherence to the agreed-upon strategy and maintain an ongoing relationship.
How to Find the Right Outsourcing Partner
- Research potential partners: Look for outsourcing companies with extensive experience in the field of sales management. Search for client testimonials and case studies to help assess their capabilities and success stories.
- Check for industry knowledge: Verify that the potential partner has experience working with businesses similar to yours, both in terms of industry and size.
- Evaluate their communication skills: Ensuring seamless communication between your company and the outsourced team is essential. Pay attention to the potential partner’s communication style and responsiveness.
- Ask for references: Get in touch with their past and current clients to acquire first-hand information about their services and overall satisfaction with the outsourcing process.
How to Manage the Outsourcing Process For Sales Management
- Clarify your expectations: Clearly communicate your expectations and objectives with your outsourcing partner, which includes setting up measurable key performance indicators (KPIs).
- Establish a communication plan: Develop a plan for regular communication and updates, outlining the preferred mode of communication and reporting frequency.
- Set up a timeline: Work with the outsourcing provider to create a timeline for project milestones, allowing you to track progress and make necessary adjustments as needed.
- Monitor performance: Regularly review the performance of the outsourced team and provide feedback to the outsourcing partner to ensure continuous improvement.
- Measure results: Assess the results obtained from the outsourcing process to verify if the goals and KPIs have been met, and use the analysis to make informed decisions about future outsourcing initiatives.
Best Practices for Outsourcing Sales Management
Outsourcing sales management can have numerous benefits, such as cost reduction, increased flexibility, and access to specialized expertise. However, to achieve these advantages and ensure a successful transition, it is crucial to follow these best practices.
Setting Clear Expectations
Before hiring an outsourced sales team or outsourced sales manager, businesses should establish clear objectives and expectations. This might include specific sales numbers, measurable performance indicators, and account executive responsibilities. It is essential to highlight the sales leader’s role in managing the outsourced team and providing guidance on sales operations, expectations, and goals.
| Objectives | Expected Results |
|---|---|
| Sales numbers | 15% increase |
| Performance Indicators | 10% improvement |
| Account Executives | 4 new hires |
Establishing Communication Protocols
Effective communication is crucial for successful outsourcing of any business function, especially sales management. Establishing clear communication protocols ensures that both the internal and outsourced sales manager have a common understanding of goals, deadlines, and deliverables. Some communication best practices include:
- Scheduling regular meetings for progress updates
- Utilizing a shared project management tool
- Setting up a centralized communication platform (e.g., Slack or Microsoft Teams)
Monitoring Performance
Businesses should implement a system to monitor the outsourced sales team’s performance continually. This can be achieved by tracking key performance indicators (KPIs), such as:
- Conversion rates
- Revenue growth
- Customer acquisition cost
| KPI | Target |
|---|---|
| Conversion rate | 25% improvement |
| Revenue growth | 20% increase |
| Acquisition cost | 15% reduction |
Regular performance reviews can help identify gaps and areas of improvement in the sales strategy, allowing for adaptability and quick problem resolution.
By implementing these best practices, businesses can ensure a seamless transition to outsourcing sales management while maximizing the potential advantages of such a strategic move.
Common Pitfalls to Avoid When Outsourcing Sales Management
Common Mistakes Companies Make When Outsourcing Sales Management
One of the main challenges faced by companies when outsourcing sales management is the lack of expertise. Company A and Company B may both want to outsource their sales management to save on resources, but they might encounter difficulties in finding a partner with the necessary level of expertise to meet their needs.
Additionally, there may be disadvantages of outsourcing sales management, such as risks associated with limited resources of the outsourcing partner. For instance, an outsourcing partner may struggle to scale their operations to meet the demands of multiple clients, leading to reduced efficiency and less effective sales management.
Failing to Define Clear Goals
Another common pitfall of outsourcing sales management is the lack of clear goals. Companies that do not clearly define their objectives risk wasting resources and time on outsourcing partners that might not bring the desired results. To avoid this, it is crucial for companies to set specific metrics and goals for their outsourced sales management, allowing them to effectively measure the performance of their outsourcing partner.
Not Providing Enough Support to the Outsourcing Partner
Finally, a significant challenge that companies face when outsourcing sales management is not providing enough support to their outsourcing partner. Effective communication and collaboration between both parties are essential to ensure the success of the outsourced sales management. Without proper support, outsourcing partners might struggle to meet the expectations of the company, leading to unsatisfactory results.
To mitigate these risks and challenges, companies should carefully consider the following:
- Thoroughly assessing the expertise and resources of potential outsourcing partners
- Defining clear goals for the outsourced sales management
- Providing ongoing support and maintaining open communication with the outsourcing partner
Outsourcing Sales Management Continued
Effective Sales Outsourcing
Outsourcing sales management can significantly contribute to business growth by allowing companies to focus on their core competencies while benefiting from the expertise of specialized sales management firms. Sales outsourcing enables organizations to scale their operations and achieve flexibility in response to market conditions.
Growth and Operations
Companies can accelerate growth and improve their top and bottom line through outsourcing sales management. By partnering with an experienced sales management provider or a fractional sales manager, organizations can access established networks, industry insights, and targeted strategies to expand their market reach.
| Benefits of Outsourcing Sales Management | |
|---|---|
| Enhanced Sales Performance | |
| Engaging New Customers | |
| Faster Market Penetration | |
| Flexible Sales Force | |
| Improved Bottom Line |
Flexibility and ROI
Outsourcing sales management offers flexibility, allowing businesses to scale their sales force as needed, which in turn can contribute to a higher return on investment (ROI). By avoiding the fixed costs of hiring and maintaining an in-house sales team, companies can allocate resources more efficiently and achieve better financial results.
Achieving Sales Goals
By leveraging the expertise of sales management outsourcing, businesses can better define and achieve their sales goals. These specialized providers offer a comprehensive understanding of the market and sales techniques, which can be instrumental in crafting effective sales strategies and de
These are some of the most common reasons for outsourcing sales management. In many cases, businesses simply need an experienced professional to step in quickly and keep sales operations running smoothly. Businesses may also find that outsourcing this key role is the more economical choice and the one that provides the most value.
Overall, outsourcing sales management provides many benefits and allows for the building of a scalable, sustainable business.
Additional Reading:
- Sales Management Outsourcing
- Fractional Sales Management
- Sales Outsourcing
- SDR Outsourcing
- Fractional CRO
- Fractional VP of Sales
- B2B Sales Consulting
- Fractional COO
- Sales Coach
- Outsourced BDR
- How to Be a Sales Coach
- How to Coach Sales Reps
- Hiring a Freelance Sales Manager
- Sales Director vs VP of Sales vs Head of Sales
- Who Does a Sales Director Report To?
