Founders who handle sales early on for their startups often dream of one day when they can hire someone to take over sales or they can outsource sales for their startup. Outsourced sales for startups unfortunately is not as easy as hiring a reputable sales agency. If done at the wrong time, for the wrong offering, to solve the wrong challenge, it can spell disaster. Not only will Founders see revenue drop, they’ll be faced with an expensive commitment draining their funds. In this article we’ll discuss everything you need to know about outsourced sales for startups.
What Is Outsourced Sales For Startups?
Outsourced sales for startups is straightforward. It’s when a startup at any stage, outsources a sales function to a third party provider. This provider can be responsible for one of many sales roles, including but not limited to; an outsourced SDR agency, fractional sales management, or an expert sales consultant.
Startups can outsource a sales function or responsibility to more effectively hire a domain expert (CRM consultant), bring someone on that they normally wouldn’t be able to afford (CRO) or full time Vice President of Sales, or fulfill a temporary need/need that isn’t full time yet (fractional sales talent.)
The type of outsourced sales help for startups focuses on providers who have startup experience. Specifically at or near the stage of your current startup. Finding outsourced sales help who that has had success navigating startup sales challenges is what makes outsourced sales help for startups different. You would not want to work with outsourced sales help that has experience helping large established companies because it requires a different skill set and approach to be successful. Startups lack many of the advantages of large established companies which is why working with an outsourced sales provider that has startup experience is critical.
What is Outsourced Sales?
Outsourced sales is when a company hires a third-party or outside provider to help with sales responsibilities. This can range from top of the funnel work like outsourced SDRs, to sales coaching, to sales operations, to sales leadership and strategy.
What Can Outsourced Sales Help Startups With?
Many startups when considering outsourced sales help wonder what they can outsource. There are outsourced sales help for startups for every sales function. Here are some roles and how they can help.
When it comes to outsourced sales for startups, the Sales Development Representative or Business Development Representative is one of the most common outsourced hires. This function helps with outbound B2B sales prospecting with the goal of booking meetings. Typically, a lead generation agency or fractional SDR is hired. The role is responsible for making cold calls, sending cold emails, leveraging social channels like LinkedIn, with the goal of booking meetings.
This role is the most popular to outsource for a few reasons.
1) Founders hate prospecting.
2)Prospecting is time consuming
3) Startups can never book enough meetings
4) Sales fails without prospecting
5) It can supplement internal efforts
If you’re considering outsourced SDR or BDR sales help for your startup, it’s important that you know who your customer is, what that buyer persona looks like, and that you’ve had previous success with sales prospecting. If you don’t have those three things, you’ll waste a lot of money. Unfortunately, before you outsource sales for your startup, you need to prove that it can work. Outsourcing sales for startups is not something you can dump on a third party provider and hope it works.
To put your startup in a position to succeed with an outsourced sales provider, you’ll want to provide the lead agency with as much information as possible that guides their approach. You do not want them figuring things out. You’ll waste time and money. This means any SDR outsourced sales for startup provider should request a sales playbook. If you can include cold calling lists and scripts that have worked before to a provider who will help with cold calling, you’ll be in a better position to succeed.
Hiring your first salesperson is quite expensive. Many Founders do not have the resources to bring someone on full time to run sales cycles and close new business. Startups that need to outsource sales can consider an outsourced Account Executive for certain closing roles. Similar to the SDR/BDR outsourcing, this function cannot be outsourced until the Founders have proven that they can close business. A good rule to follow before hiring outsourced sales help for startups is that the Founder must have successfully accomplished the role for any role that interacts with customers. Hiring an outsourced Account Executive is not going to solve your closing issues.
This role works for startups that;
- Have a transactional sales
- The sales cycles are short (60 days or less)
- The founders have proven they can close business in a predictable and repeatable way
- There are enough booked meetings on the calendar that an outsourced AE can handle
- There sale price justifies the cost of the hire
Outsourcing an Account Executive role for startups will not work for longer, complex sales cycles. Companies should only consider this hire as a temporary solution. The timing for this role makes a lot of sense for cash strapped startups that need an extra person who can help out with lead overflow. The Founder will still be the #1 salesperson at the company but this is a great way to supplement the sales function at a startup.
Sales Coaching For Startups
When it comes to outsourced sales help for startups, sales coaching is one of the most popular ways startups can benefit from outsourced sales help. Simply put, startups do not need to bring someone on full time as a training manager to improve the sales skills of the Founder and sales team. Perhaps after a later funding round this makes sense as a full time, internal hire but for pre-seed, seed, and series A startups, funds are spent elsewhere.
Founders can learn how to sell without formal coaching. However, it will take substantially longer for a Founder to learn sales on their own. They’ll also make mistakes they don’t realize they’re making which can cost their startup revenue. In a couple of weeks a Founder who cannot sell, can learn to sell at a good enough level to have the confidence and expertise to close a higher percentage of clients.
Outsourced sales coaching for startup teams is also a great way to improve sales results at startups. Founders who are not former sales leaders will struggle with fixing mistakes of their sales team. A Sales coach can come in and identify issues and fix them. This can be the difference between hitting your numbers and not. Not only will Founders see an improvement in their sales team’s performance, the non-sales people at the company will have more confidence in the startup when they see revenue increasing month over month.
Sales Management For Startups
When it comes to outsourced sales help for startups, sales management is a common role that can benefit startups as they grow. Often, early stage startups have sales teams that are led by a Founder. Founders have many responsibilities and being an effective sales manager can be challenging. Sales teams are neglected, one on ones are rescheduled, and typical management duties are pushed aside in favor of working on product or fundraising.
Fractional Sales Management at the Sales Manager level up to the CRO level can be a great outsourced sales help for startups function that pays dividends. An experienced sales leader can identify individual contributor problems and correct them. They can improve sales teams performance. Effective sales managers can bring an outside perspective that can help unlock new sales opportunties.
Bringing on a fractional sales manager makes a lot of sense for neglected sales teams and Founders alike. Founders will free up time they’d normally dedicate to sales management while improving the sales management function at their startup. As the company grows, it may not make financial sense to bring on a full time sales manager so a fractional sales leader can bridge the gap for for five to 20 hours per week.
Sales Operations and Sales Consulting For Startups
Startups face many challenges. Some short term, some longer term. When considering outsourced sales help for your startup, Sales Operations and Sales Consulting are a final catch-all outsourced sales function. This can be a role that helps with everything from setting up your startup CRM to writing cold email copy for your SDR team. Think of this category of outsourced sales for startups as a speciality function.
When hiring for outsourced sales operations or consulting for startups, it’s imperative they have references for similar work.
When Should Startups Consider Outsourcing Sales?
Startups should consider outsourcing sales when the Founder has proven that there is a repeatable and predictable way to generate new business. Outsourced sales for startups will fail if a Founder is relying on a third party provider to figure sales out. It never works. It’s going to be expensive and a waste of time.
Another thing to consider when outsourcing sales for startups is bridging the gap for teams. Often, a startup is not ready to hire someone full time. They may not be able to afford another full time hire, there aren’t enough leads to confidently support a full time sales hire, or the task that needs to be completed requires a temporary engagement.
Supplementing what is working, especially when it comes to SDR outsourced sales help for startups is a solid way to keep enough qualified meetings in the pipeline without the cost and overhead of bringing on another full time SDR/BDR.
10 Top Benefits of Outsourcing Sales For Startups
- Cost effective
- Double down/supplement what is working
- Specialized expertise
- Solve sales problems without making a full time hire
- Bridge the personnel gap
- Bring in an outside perspective
- Free up Founder time
- Improve Sales team morale
- Improve company morale
- Hit the ground running
How Much Does It Cost To Outsource Sales?
When it comes to pricing for outsourced sales for startup help it depends. Variables for pricing include experience, industry, length of engagement, location of outsourced sales provider, etc.
To give you a range, for basic lead generation help, say to build a prospecting list, you might pay a few dollars per hour. If you were to go the opposite end of the spectrum, a CRO who does outsourced sales for startups might cost anywhere from $150-$600 an hour depending on experience, terms of engagement, and industry.
Agencies that help with outsourced sales for startups can be thousands of dollars per month and require long term engagements. It’s not unheard of for SDR type agencies to charge $6,000-$9,000 a month with a minimum of a 6 month commitment.
What to Look for an Outsourced Sales Help For Startups?
If you’re a Founder considering outsourced sales for your startup, you want to consider a few things before hiring fractional help, a consultant, or an agency.
- Do they have relevant experience? Meaning, have they done the job you need done for your stage of startup. Series B sales challenges are very different than Seed stage. If you’re looking for help with improving your sales team’s performance, have they done this before? Ask for specific examples with measurable results.
- Tech stack experience – If you’re bringing on an SDR or AE, you want them to be able to handle your tech stack, especially with a fractional or part time hire. You don’t want them spending their first 10-20 hours learning how to use a sales engagement platform.
- Location – Where is your fractional hire or Agency located. Agency, specifically. Although there are decent overseas SDR outsourcing agencies, many are not good even if the cost is appealing. There are many remote sales consultants your startup can work with. Confirm that time zones will not be a challenge. It’s important that any Sales Manager is always available during your team’s working hours.
- Client References – People who have sales experience can fool non-sales founders. They talk a big game, can name drop clients they’ve closed in the past, the numbers they’ve previously achieved, and how they can easily fix your sales problems. Unfortunately, a lot of this is all talk. Founders get fooled and two months go by with thousands of dollars wasted. Make sure to get client references before hiring outsourced sales for startups.
- Rolodex – Always discount their rolodex. It’s a red flag if they promise you a bunch of introductions.
Outsourced Sales For Startups – Conclusion
When it comes to outsourced sales for startups, there are many benefits for Founders considering this as an option. Before hiring SDR or AE sales help or any other individual contributor sales job title make sure you have a proven sales process. If you don’t but know you’re close and need sales coaching, go for it. Sales coaching can have a material impact on the success of your startup. Additionally, if there is a temporary need for sales expertise, that can be a great opportunity to consider outsourced Sales for your startup. Make sure that you spend time doing your due diligence before hiring anyone. Outsourced sales for startups can be a great way to supplement what is working, solve sales challenges, and accelerate sales performance.