Companies are choosing to outsource sales development services much more than they were before the pandemic.
In our latest B2B Revenue Acceleration podcast, we featured Dan Seabrook, VP of Sales at Operatix and our podcast co-host, about trends he’s been seeing in outsourcing.
“Being an outsourced provider ourselves, we thought perhaps there would be a slight negative impact on business when the pandemic began” – stated Dan “however – our demand has been enormous since the start of the pandemic.”
We wanted to share a few reasons on why we believe the pandemic has caused a big spike in demand for outsourcing, particularly in the role of BDR and SDR, and why it has been a popular alternative for businesses right now.
At the outset of Covid-19, Dan wasn’t convinced we would see a shift towards outsourcing. “I thought that we could have seen a bit of impact on our business negatively because of the old adage that marketing budgets get cut first,” he said. It’s actually been the opposite.
3 Key Reasons for Outsourcing
1. A shift in marketing budgets
For numerous companies, plenty of budgets have been cut across the board, but many marketing budgets have also been repurposed. A great example of that are in-person event budgets. We’ve seen marketers shifting their event budgets to outbound prospecting, whereby a more tailored and account-based approach has shown more effective for pipeline generation.
2. Avoiding hiring risks
The uncertain economy highlights the challenges with recruitment. Organizations wonder whether they will be still able to maintain an employee 6 months from now.
Operatix doesn’t label itself an ad-hoc service usually, but outsourced services like ours bring more flexibility than having an internal employment contract.
3. Validation of GTM activity
Another way that outsourcing lowers business risk is by allowing an organization to run a program to test it out.
“We give companies the ability to test the success of an outbound sales function and process before hiring internally,” Dan pointed out.
It increases a CFO’s confidence in making a decision to bring that function internally for the long term or keep it as an outsourced solution.
Changing client expectations
“How can you bring insights and education to challenge prospects’ way of thinking, so that when they’re ready to buy you’re front of view?
Dan Seabrook – VP of Sales at Operatix
A renewed emphasis on outsourcing has certainly impacted change in the sales process.
- A consultative approach. Always be consultative in your sales approach. Experienced marketers/VP of Sales/CRO’s who are confident in their work may not know what is working/isn’t working in the changing economic environment, therefore in a lot of cases we have people coming to us for advice in a consultative manner. By working with over 100 tech clients, we have a birds eye view of the market and what is working for companies, with a similar size and market that they’re targeting.
- Urgent needs. Besides clients who want advice, Dan has also seen clients who have a sense of urgency about getting a quick ROI. They’re wanting instant opportunities and urging to do business here and now. Dan reiterated the importance of not having a short term view for creating deals or generating return, especially in an economic downfall – it is a recipe for failure… you can’t turn the tap on and get these opportunities in a day, especially considering that vendors tend to have a long and complex sales cycle.
- Renewed focus. Despite worries about closing deals, the conversation needs to return to education and insights. The basics haven’t changed: Focus on a long term view on sales and marketing development and pipeline generation.
Outsourcing: Cost vs. Flexibility
This is a perennial question about outsourcing that Operatix has faced since it was founded.
Is the expense of outsourcing worth the increase in flexibility? And is outsourcing actually more expensive than having an SDR team in house?
Dan acknowledges that there’s always opportunity cost no matter the decision.
When prospects and clients raise that objection, the discussion point is raised by Dan that they could lose out if they don’t evaluate an outsourcer for the right reasons — not just based on price.
They need to consider the following:
- The recruitment challenges
- The ability to scale when needed
- The resources & expertise
It is also crucial to consider work hours and personnel:
An outsourcer has 200 people collecting data for one day. Even a prospect with 10 people assigned to that job will need 20 days to accomplish the same output.
“If they’ve got a team of one, it’s a lot more challenging to keep iterating and refining their process to recruiting and onboarding as they navigate their way through this Covid period,” Dan said.
That fact increases risk of abandonment, no matter how smooth their onboarding process. Outsourcing means a very low job abandonment rate and a very quick ROI. The outsourcing question isn’t just about cost anymore.
We’re giving companies the ability to have a seamless transition away from that outsourced model to a hybrid outsourcing source model to a fully insource model at some point in the future.
Dan Seabrook – VP of Sales at Operatix
The build and transfer model
It isn’t only clients who have changed and adapted.
In terms of outsourcing, it seems to be a trend that has peaks and troughs over the years – based on whatever research is released by analyst firms.
Companies that decide to take the sales development function in-house have the ability to test the model with an outsourced partner like Operatix and then hire the resources, after assessing their abilities and cultural fit.
“We’ve tried to develop a concept around a conveyor belt of talent,” Dan said. “We’re giving them the ability to test people before they actually hire internally.”
Here’s what that means in practical terms:
1. Time to build infrastructure
If the client is a startup, for example, they don’t have the perfect infrastructure, tech stack, data, resources to manage the team or even an office.
In these cases, the build and transfer model gives them a chance to get a team trained and ramped up by Operatix, before they start building that function internally.
2. Low risk, high return
Outsourcing a function can help a client to develop their processes, test the resonance of the message in the market, and refine their approach.
When the client has confidence in the results, they can begin to transition with low risk of job onboarding abandonment or a failed strategy.
“We’re giving companies the ability to have a seamless transition away from that outsourced model, to a hybrid outsourcing source model to a fully insource model at some point in the future,” Dan said.
Get in touch with Dan via LinkedIn — and find out how we accelerate sales for B2B software vendors at Operatix.
To hear this interview and many more like it, subscribe to The B2B Revenue Acceleration Podcast on Apple Podcasts, on Spotify, or on our website.