SDR Outsourcing: Is It Right for Your Business?

November 01, 2023 | Uncategorized

It’s 2023, and it is more complicated than ever for businesses to stand out and obtain the qualified leads they need. Businesses need to be adaptable and flexible if they want to prosper. This can be accomplished by hiring outsourced SDRs.

If you want to grow your business and generate more revenue, you need to be known by people. But more than that, people need to buy whatever you are selling. Inbound marketing plays a vital role in this situation. 

Therefore, a strong sales team is essential to expand your product- or service-based business.

But what if you lack the resources to find, hire, and develop outstanding in-house sales representatives? What should you do if you don’t need an entire team all year?

That’s where outsourced SDR partners come in.

Outsourcing SDRs can save 70% over hiring an in-house sales representative. Still, they have more significant expertise and experience and access to a wealth of resources, which results in more leads and conversions.

You will learn everything about outsourced sales development representatives in this article. 

So, if you’re ready to discover about outsourced SDRs — continue reading.

What Is SDR Outsourcing?

A sales development representative (SDR) is responsible for gathering prospects obtained through demand generation activities and turning them into actionable leads and sales discussions. They carry out duties like lead nurturing, research, personalization, and outbound prospecting (cold calling and cold emailing). High-level SDR performance directly relates to how well your sales strategy works. 

SDRs can be hired from SDR outsourcing companies or trained as an internal team. Outsourced SDRs must feel like a member of your team to qualify inbound prospects and produce new leads from outbound efforts.

According to recent State-of-SDR surveys, SDRs in America had an average of one year of experience when hired.  The Bridge Group 2023 Sales Development Report reveals that since 2010, the amount of SDR experience needed to be hired has decreased by 60% —from 2.5 to 1.0 years. 

Alt text: SDR Outsourcing – Typical Conversion Funnel

Source: https://www.cience.com/blog/sdr-outsourcing

 

Outsourced SDR vs. In-House SDR

The cost is an essential factor in determining whether SDR outsourcing is correct for you or not. The Bridge Group, an inside sales consulting company, states that an SDR’s average tenure is 1.4 years, and its average ramp time is 3.2 months. Bottom line: The average SDR tenure is barely more than a year of productive (total tenure minus ramp) contributions to the pipeline. 

When thinking about using an in-house approach, it is necessary to consider the numerous tasks involved. This includes creating a thorough job description, conducting in-depth interviews, figuring out the organizational structure and reporting hierarchy, and overseeing the expansion and development of the SDR team. It’s important to understand that hiring in-house can be expensive because it demands time and financial investment.

The average hiring criteria for sales teams is a 50% burden on annual salary. According to The Bridge Group, the average salary for an outbound sales development representative in the US is $80,000. Therefore, the incremental hiring expenses would be $40,000 for an SDR with a base salary of $80,000.

According to research by CIENCE, even a two-person SDR team requires management for $330,729 per year. This was calculated by considering the team’s salary, tools (software, phones), manager’s base, time allotted to the SDR team, overhead (rent, equipment), and expenditures associated with hiring and training new employees.

You can cut the costs of hiring, onboarding, training, and employee retention when you start outsourcing business development representatives. For example, you could spend around $5,000 monthly on a dedicated SDR team. 

This pricing is a great place to begin holistically planning a lead generation budget. When businesses can obtain the same results through an outsourced SDR company at a significantly lower cost, they are more likely to explore outsourcing SDRs.

SDR Performance

According to The Bridge Group, the average experience needed for SDRs decreased from 1.2 years to one year between 2020 and 2022. 

Those with less than a year of experience in frontline sales development mean the performance responsibility of these junior employees falls on their management. When you hire in-house SDRs, the manager requires time to get to know each applicant and figure out how to inspire each employee daily. 

Apart from the daily tools an in-house SDR needs to track progress, organize, and communicate, you must also consider sales enablement technology and the training required. Hiring an SDR outsourcing company is beneficial when you don’t want to spend money on high-quality tools but need ROI-driving performance. 

Time Factor

Building and maintaining an SDR team takes time and trial and error. When managing your internal team, decisions about compensation structures, demotivation, and outreach strategies are just a few of the difficulties you may encounter.

Internal sales teams frequently don’t work effectively with marketing teams, which results in ongoing organizational problems. SDR outsourcing firms help you find the right path and save time while your team spends time testing tools, messaging, and navigating your target market.

SDRs frequently spend most of their time researching and cold calling, leading to burnout. On average, SDRs dedicate three hours per day to conducting actual research.

Three hours per day of research adds up to 69 hours per month and 828 hours annually. Let’s take an average SDR salary of $76,000 to determine how much these three hours cost annually. We assume that SDR works 23 nine-hour days per month for these calculations.

Alt text: Estimated calculation of in-house SDR 

Source: https://www.cience.com/blog/sdr-outsourcing

An estimated $25,337 is the amount that can be put straight into your sales and closing deals. Nowadays, everything revolves around sales specialization because it lowers expenses and boosts the productivity of your SDR. Consider those who spend their entire day conducting research. And it’s their specialization. Compare their productivity to the outsourced salesperson who spends only 10% of their time on research. The comparison will not be fair. You will go with the second option. In this way,  you can maintain a completely qualified sales pipeline with the help of outsourced sales staff.

As the SDR functions become more mature, companies continue to look for novel ways to boost growth and get potential customers into the hands of sales teams. Establishing a solid outsourced sales development team can offer a strategic choice for scale without unnecessarily burdening sales executives or diverting them from their primary goals.

Tips for Better SDR Outsourcing

When you decide to outsource your SDR operations, it’s okay to have expectations for SDR outsourcing companies. You may hope for ROI to soar through the roof in about a month without your involvement. Although it sounds fantastic, that is not how it works. Here are some critical tips for using outsourced sales: 

1. Don’t rush it

An outsourced SDR will require adjusting time, just like any other employee. You will reduce the time needed for onboarding, but the SDR should still be familiar with your industry and target market. Give it some time while training them about your product or service.

2. Engage

SDR outsourcing companies can help maintain internal team focus on generating new business. It won’t be able to work independently. You should be open to communicating with your new outbound sales partners and integrating them into your current teams to boost productivity.

3. Think about the impact first

You pay for the expert’s insights, a hardworking team, and a strategy for your business. The price should be reasonable based on your SDR outsourcing company’s expenses.  You would be in doubt if someone tried to sell you a brand-new car for $100. The same is true for outbound sales. 

Make sure to define your objectives, especially regarding desired results clearly. Ask many questions. Select an SDR outsourcing provider that can help you achieve your goals.

Why Hire SDR Outsourcing Companies?

SDR outsourcing companies are an affordable option for businesses looking to enhance their lead generation and qualification procedures. SDR outsourcing companies are responsible for designing and implementing effective lead-generation programs.

Additionally, they offer a network of skilled sales development representatives who can quickly boost your lead generation efforts.

SDR outsourcing companies have various advantages:

    • Cost-effective lead generation: You can plan and run a successful lead generation program with the assistance of SDR outsourcing providers for a fraction of the price of hiring in-house staff.
    • Expertise and experience: SDR outsourcing companies are highly skilled at qualifying and generating leads. They can help you in modifying your procedure to get the best results.
    • Flexibility: SDR outsourcing companies provide considerable freedom regarding cost, contract details, and task scope. This enables you to customize the service to fit your needs and spending limit.
    • Quick ramp-up: You can swiftly ramp up your lead generation efforts with an SDR outsourcing company without hiring and training new staff.
    • Access to qualified leads: SDR outsourcing companies have extensive networks of qualified sales development representatives who can produce top-notch leaders for your business.

Services Offered By Sales Outsourcing Companies

Although the services provided by SDR outsourcing companies might vary, the most common include sales operations management, lead generation, and market research.

Sales Operations Management

Sales operations management includes managing a group of contracted salespeople accountable for achieving specific goals. This includes establishing performance targets, developing standard operating procedures, and tracking activity levels to ensure representatives meet their quotas.

Market Research

Market research is essential to any successful B2B company since it helps identify potential customer segments, determine the best ways to reach them, and develop strategies for efficiently addressing them.

Lead Generation

Lead generation is essential to create new company prospects through focused advertising. It requires understanding the target markets and generating qualified leads from the ones identified to have the most significant potential.

Outsourced sales development representatives are experts in this field and may offer helpful advice on increasing your return on investment when bringing on new clients.

Outsourcing sales development teams can benefit businesses hoping to scale up fast without compromising quality or productivity. Their expertise lies in providing clients access to particular skill sets that are not accessible through traditional hiring methods like cold calling or emailing potential prospects. By utilizing the knowledge and experience of these individuals, businesses can get a competitive edge in today’s dynamic industry while lowering expenses associated with hiring top talent internally.

 

Critical questions for your outsourced sales development agency

Uncertain of what to ask an outsourced sales agency? Here are some excellent questions to ask to learn more about their credentials:

  • Who would be on the sales outsourcing team?
  • What core capabilities do you offer (B2B, B2C, etc.)?
  • What level of experience do you have in the industry we’re in?
  • Can you provide examples of your previous work?
  • What kind of conversion rates do you usually get?
  • What kind of support can you offer?
  • Can you give any evidence that you are aware of our needs?
  • How much experience does your staff have to offer?
  • What devices and tools do your representatives use?

You can ask These key questions while choosing an outsourced sales agency.

 

Do you have to train an outsourced sales development representative?

After choosing your outsourced sales development company, there are steps you can take to maximize the effectiveness of your onboarding procedure. First, the team handling your account needs to be well-versed in the product you sell because your representatives cannot effectively market something they do not understand.

After onboarding is finished, your involvement continues. Successful SDR relationships require commitment and open lines of communication from both ends. You should train your external representatives like you would for internal hires. Aim for the highest engagement level by ensuring you communicate with them and understand their sales procedure. Your SDRs must understand your business objectives, strategies, KPIs, and processes. Additionally, they should coordinate with your internal sales and marketing departments.

Don’t be scared to seek the advice of an outsourced sales development company to help you lead this process.

Best Practices for SDR Outsourcing Companies

When considering SDR outsourcing companies, it’s essential to consider the caliber of the leads they generate. The top SDR outsourcing companies will have a record of producing quality leads that result in closing business deals. They should also be able to give you a thorough report on their success to see how many leads they produced and how many of those resulted in closed deals.

The amount you are prepared to spend for leads is another factor to consider. Some SDR outsourcing companies charge per lead, while others demand a monthly price. There is no right or wrong answer here. It depends on your budget and desired qualities in an SDR outsourcing company.

Finally, ask about the company’s assistance and training programs. The top SDR outsourcing providers will give your sales team in-depth training to get the most out of the leads they generate. In addition, they must provide ongoing assistance in case any issues arise during the sales process.

AE vs. SDR

Every company has the same problem when acquiring customers: how can we get the right message to the right people at the right time?

There are ways to do this, but the two common ones are outsourcing sales development representatives (SDRs) and Account intelligence through account-based marketing (ABM).

Which is better, then? SDR outsourcing or ABM?

As with most things in life, the answer is it depends. 

Account-based marketing is a focused strategy for gaining customers that prioritizes key accounts over individual leads. The idea behind ABM is to concentrate your efforts on your potential customers because selling to existing clients is more straightforward than finding new ones.

ABM has many benefits. First, you can send them personalized messages because you are focusing on a specific account. This improves the efficiency of your marketing and increases conversion rates. Additionally, because ABM requires more coordination between sales and marketing than other approaches, it can help align these two departments and enhance their communication and collaboration. Finally, ABM tends to be more effective than different strategies because you aren’t wasting time and money pursuing leads that won’t convert.

If you are looking for an Account-based marketing strategy, you are in the right place. Our account intelligence offers priceless insights that help businesses make wise decisions and stimulate growth on a global scale with a complete strategy that spans linguistic barriers. Schedule a meeting with us to learn more about our account intelligence.

The Bottom Line

SDR as a Service can transform how businesses obtain business leads, making it economical and successful. Companies can benefit from decreased expenses of qualified B2B leads and higher ROI by outsourcing their lead generation activities to an SDR provider. They will also profit from having access to skilled salespeople with extensive experience navigating various marketplaces and sectors. Ultimately, SDR as a Service gives businesses a helpful tool for locating high-quality prospects who will become valuable customers.

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