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
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 will cost around $4,000 when all factors are considered and for sales management, that cost is likely to be even be higher, 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 will not need to worry about the hidden expenses of hiring someone, including:
- Outfitting office space
- Purchasing equipment
Instead, through outsourcing, it’s 100% possible to avoid these costs while slotting in a valuable asset to the sales team. Businesses can use the expertise of the outsourcing company 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.
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.
- 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.
- 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.
- 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 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:
- Office outfitting
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 compensation plans that make more sense for the business.
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.
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 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.
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:
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.
- Industry Expertise
Another important thing to consider is industry expertise. Does the provider know your industry and your customers or clients?
A provider with industry expertise will have the knowledge and experience to know how to manage your sales team and what drives success in your industry. Their expertise may also allow them to make critical changes to processes or strategies to help improve performance.
Providers that do not have experience in your industry may not know the best practices to improve sales or how to motivate your team.
If you’re expanding into new markets and plan to outsource sales management, consider whether the provider can offer multi-lingual managers. These managers may not be a necessity for all businesses, but they can be vital when:
- Expanding into new markets
- Targeting customers that speak different languages
- Creating marketing material
Language is a very powerful asset, and it’s one of the most crucial in the sales world. If an outsourced sales manager is fluent in Spanish, for example, and has experience in the region that a business is expanding to, they’ll have the advantage of “speaking the customer’s language” and can be an invaluable asset.
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:
- Pre-employment background checks
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.
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.
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.