Outsourcing Business Development vs Building your Own Team

Author:

Aurelien Mottier

Outsourcing Business Development vs Building your Own Team

Author:

Reading Time: 5 minutes

Outsourcing Business Development vs Building your Own Team

Aurelien Mottier

CEO at Operatix

Outsourcing business development can often be seen as a costly option for businesses, but when you take a closer look at the investment that goes into building an internal BDR/SDR team, you may be surprised by the results. All things considered, outsourcing business development can save you a significant amount of money – not to mention the time it takes to build a successful sales team.

In this blog, we break down the true cost of building an inside sales team, including all the hidden costs beyond the BDR/SDR’s salary, which may not be obvious at a first glance.


Outsourcing business development – where to start

A great way to start defining how big your BDR / SDR team should be is to identify how many inbound leads your marketing team is producing. As a guideline, we suggest that a single sales resource should be working through 300 marketing qualified leads every month based on 20 working days at a disposition rate of 15 leads per day. Anything less than this and the resource will most likely be making up the rest of the available time doing hybrid activities — which can be a nightmare to manage.

It’s also worth considering the territories that your inbound leads are coming from. If you have 150 coming from the US, 50 from the UK, 50 from Spain, and 50 from Germany, hiring a sales rep will only be worthwhile if you can pull off the minor miracle of finding a trilingual salesperson. By outsourcing business development to Operatix instead, you can take advantage of our multilingual team – they can speak 17 languages and accelerate market entry in 107 countries.

You may also find that if you’ve hired a full-time resource that is dedicating a large amount of his or her time to proactive sales activity due to a lack of inbound activity in their native tongue, it can be very difficult to motivate and manage this element of their role.

The bottom line is if inbound demand is very clearly demonstrable for your company and manageable in terms of language restrictions: go ahead and build your own sales team. If you are lacking inbound response demand, then you’d better hope you have an extremely strong, disciplined, and consistent management system overlooking your sales team. Otherwise, outsourcing your business development is likely a more beneficial and efficient choice.

The Cost of an Internal BDR team vs Outsourcing Business Development

At face value, it can easily look as though recruiting your own sales development team makes far more sense than outsourcing this function. Why pay a premium to outsource business development, when it can seemingly be done so much cheaper in-house? It’s a very good question and one that yields a surprising answer.

The true cost of hiring an inside sales representative is easily overlooked, as there are many factors that businesses can fail to take into consideration when weighing up building an internal team vs outsourcing business development.

The average base salary of a Sales Development Representative in San Francisco is estimated at $58,000 according to Glassdoor (as of March 2022). At this rate, we can expect that with commission factored in, the total cost of one resource would be $80,000. In London, the same resource would cost around £50,000 (£ 35,000 being salary + £ 15,000 commission). However, the average cost of an inside salesperson is for exactly that — an average salesperson. To hire a top-performing salesperson, at least 10% of the salary should be added on top. This puts the salary at $88,000 in The Bay Area and £55,000 in London.

left quote
right quote

The true cost of hiring a Business Development Representative is easily overlooked, as there are many factors that businesses can fail to take into consideration.

Aurelien Mottier – CEO – Operatix

Other various employer charges such as benefits, pension, and medical care all add up as well, and we can assume that these costs will add another 15% of the sales rep’s salary to the employer’s outlay. We’re now looking at salaries of $101,200 in San Francisco and £63,250 in London.

Management of the resource is another cost often overlooked. If your sales manager is looking after seven to nine resources in total (an industry average according to Pavilion’s Sales Development Report – see Slide 31), it’s fair to allocate 12.5% of the manager’s salary as an added cost to each salesperson. On the basis that your sales development manager is earning at least 10% more than the sales rep, the sales rep’s total cost per annum is now at $113,300 in San Francisco and £70,750 in London.

outsourcing business development

Technical expenses for an inside sales representative such as database systems and software license fees are another unavoidable yet often unconsidered cost. For this expense, we can expect to add around $500 per month in San Francisco or £350 per month in London. With licensing and data expenses added in, the annual cost of an inside salesperson is $119,300 in San Francisco and £74,950 in London.


Miscellaneous expenses such as the cost of seats, essential office equipment, and bills are a relatively meagre addition, so we can assume that they add around $2000 annually in San Francisco and £1000 in the UK. This now leaves us with a figure of $121,300 per annum for an inside sales representative in The Bay Area, or £75,950 in London.

Already these figures are considerably higher than the $89,000 and £50,000 OTE salaries of an inside sales representative. And that’s not even factoring in the costs of recruitment and replacement.

The cost of initial recruitment is anywhere between 12% and 22% of the salary according to recruitment experts Quarsh. Utilizing the minimum 12% cost of recruitment, the total cost of a sales rep is, so far, at $129,220 in The Bay Area, or £80,750 in London.

The cost of replacement comes into play when your salesperson is either: promoted, poached or moved on. On average, a salesperson stays in their job for around 2 years, according to Sales Readiness Group statistics. A Center for American Progress study found that it costs, on average, 16% of the yearly salary to replace an employee. If you’re paying 16% of the salesperson’s salary every two years to replace them, you can average that cost out to 8% of the salary per year. With the cost of replacement factored in, the total figure for an inside sales representative’s yearly cost comes to an estimated $134,500 in San Francisco and £83,950 in London.

left quote
right quote

The total figure for a Business Development Representative’s yearly cost comes to an estimated $134,500 in San Francisco and £83,950 in London.

Aurelien Mottier – CEO – Operatix

These numbers aren’t even taking into account the cost of training & development, sales playbook, and the ramp-up period expected until an SDR is fully delivering results.

Reputable Outsourced BDR agencies will charge anything between $ 10,000 to $ 15,000 per month for a program, so If you’re struggling with pipeline generation, then take these total figures and think again. Is outsourcing business development really more expensive than setting up an inside sales team?

Find out more about how outsourcing business development can help you accelerate sales and market entry by getting in touch with Operatix. Specialising in B2B tech and software, our teams are highly experienced in generating revenue for businesses across the globe.

About Operatix

Operatix is a Sales Acceleration company specialized in supporting B2B Software vendors to identify new revenue streams, increase qualified sales pipeline, and accelerate channel development across Europe and North America. Operatix has a wealth of experience in working with the biggest tech players worldwide as well as a multitude of emerging software vendors.

The JOLT Effect: Helping High Performers Overcome Customer Indecision

Matt Dixon

6 Tips to Build a Successful Pipeline Generation Strategy

Aurelien Mottier

Selling in a Recession: 5 Strategies for Growth

Aoife Daly

Ready to get started?

Learn more about how we can get work as an extension of your Sales & Marketing teams to drive more revenue.

Channel Transformation

Digital transformation is changing how companies buy and use business solutions, making vendors re-assess the capabilities of their channel ecosystem. With channel dynamics in constant flux, vendors need to be ready to cut ties with partners that don’t share their vision or have connections with the right B2B buyers.

 

Operatix has supported numerous vendors in their path to Channel transformation by assessing current partners and recruiting new partners that are more aligned with their new channel strategy. Once the right partners have been identified, Operatix built scalable outbound sales development programs that accelerated their routes to market.

Inbound Response Management

In a competitive industry like technology every lead counts. Operatix can help you maximize conversion from MQL to SQL and from lead to pipeline, increasing both your revenue and ROI on marketing activities.

Account Identification

Identifying the accounts that are more likely to buy from you is part of our expertise. We will research the market, identify verticals and industries that can benefit from your solution and set up qualified sales engagements for your teams to kick-off the sales process. 

Cold Prospecting

Our team will identify new sales opportunities within the strategic accounts that you haven’t been successful in penetrating through your sales & marketing efforts. By applying the ‘Challenger Sale’ methodology we use a tailored, multitouch approach to connect with prospects, generating qualified sales engagements for your team and ultimately increasing your pipeline.

Outbound Sales Development

Using a proactive outbound sales approach has been proven to be one of the most effective methods to engage with prospective customers. By applying the ‘Challenger Sale’ methodology we use a tailored, human approach to getting in touch with prospects to increase your qualified sales engagements and ultimately generate more pipeline.

Outbound Sales Development

Using a proactive outbound sales approach has been proven to be one of the most effective methods to engage with prospective customers. By applying the ‘Challenger Sale’ methodology we use a tailored, human approach to getting in touch with prospects to increase your qualified sales engagements and ultimately generate more pipeline.

Partner Concierge Service

Our Partner Concierge Service helps vendors accelerate their channel programs, by engaging and nurturing channel partners and supporting them to get to revenue quicker.

Demand Generation

Whether you need to implement a demand generation strategy or get more results out of your existing demand gen engine, Operatix can work alongside your marketing team to yield better results out of your demand generation programs.

Account-based Marketing

An Account-based Marketing strategy is only as successful as the revenue it generates. At Operatix we will support your 1:1, 1:few or 1:many approach to get your team in front of decision makers in the accounts that matter the most to you. 

Lead Qualification

If your marketing leads aren’t converting, it might be a lead qualification issue. Operatix can help sieve through leads that need further qualification, so they are ready for an AE or sales team member to engage with.

Account-based Selling

At Operatix we will support your 1:1, 1:few or 1:many approach to get your team in front of decision makers in the accounts that matter the most to you. 

Pipeline Generation

Generating Pipeline for our clients is our key-objective. And we do that by using a multi-touch, multi-channel approach to generate qualified sales engagements for our customers’ sales teams.   

Account Intelligence / Deep Dive

Understanding buying centres, hierarchies and relevant personas in strategic accounts is a fundamental step to increase conversion rates. By leveraging account intelligence in a sales conversation your team can tailor their message and provide value to their prospective customer. But sales & marketing teams often struggle to dedicate time and resources to do the deep research and this is where Operatix can help.

DMID – Decision Maker Identification

Finding quality data is an on-going challenge for B2B Tech vendors. The accuracy of data platforms is questionable and that is why Operatix developed a manual process to identify & verify contact details for decision makers within strategic target accounts.

Playbook design

Operatix can develop Sales Playbooks that enable teams to sell more effectively. Your Playbook will be fundamental to get your messaging right, accurately position your solution against competitors, and adapt the communication of your value proposition to different buyer personas.

Recorded Testimonial: RXVantage

Fill in the form below and receive the recorded testimonial of Jeremy Gilman. 

Recorded Testimonial: Qualys

Fill in the form below and receive our recorded testimonial from Joerg Vollmer, the General Manager at Qualys.

Recorded Testimonial: Incorta

Fill in the form below and receive the recorded testimonial of Emily Lewis. 

Sales Playbook Development

Operatix can develop Sales Playbooks that enable teams to sell more effectively. Your Playbook will be fundamental to implementing the correct messaging, accurately position your solution against competitors, and adapting the communication of your value proposition to different buyer personas.

Lead Qualification

If your leads aren’t converting, it might be a lead qualification issue. Operatix can help filter through leads that need further qualification, ensuring that they’re ready for an AE or sales team member to engage with and progress through the funnel. 

Partner Portal / Marketing Concierge Service

Vendors often spend thousands of dollars building multifunctional Partner Portals to help channel partners educate their teams, manage opportunities, and create marketing programs. Still, these portals are often underutilized due to lack of bandwidth and capacity from vendors to offer support in enabling their partner community. Operatix, through their Partner Development team, can support your partners to make the best use out of your partner portal, managing the relationship with your partners and helping them set up co-marketing campaigns to drive more revenue for both businesses. 

Marketing & Sales Alignment

The sales development function is often seen as the “glue” that brings sales & marketing teams together. By working as an extension of your teams, Operatix will be your predictable source of pipeline, sales & revenue.

Optimization of MDF

Market Development Funds are an important component of any channel ecosystem, though vendors believe they are not maximizing the return on investment they should be getting from their MDF programs. At Operatix, we build scalable outbound sales development programs that will give you the visibility of return over the invested spend and will provide clear value for your channel partners.

Increase Partner Productivity

The 80/20 rule is still very applicable to the channel, which means that investing in partner productivity should be a priority for vendors looking to grow their businesses. Operatix can increase partner productivity and shorten sales cycles, by identifying ready to engage sales opportunities for your most valued channel partners.

Virtual Channel Account managers

Our VCAM team is responsible for building, maintaining, and managing sound relationships with current and prospective channel partners. They can get involved in opening up new sales conversations as well as closing small businesses up to $ 10k.

Tier 1 & Tier 2 Activation

Whether your business decided for a Tier 1 or Tier 2 distribution model, Operatix can help your channel partners get to revenue quicker. By providing qualified sales engagements to your channel partners we can accelerate your route to market with tangible and easily measurable results.

Solution Selling Training

Far too often vendors insist on enabling their channel partners to talk about features and technical details of their solutions. Customers don’t buy features; they buy the benefits your solution can bring. Operatix will work with your partner community to train them in articulating your message from a high-level business perspective, enabling them to talk to prospects about the value your solution can bring to their company from a board-level perspective.

Channel Enablement

Enabling your channel partners have measurable wins for your business when done right. Operatix has a proven track record in enabling channel partners from a sales & marketing perspective, providing them the knowledge and tools to successfully pitch your solution and sell the value & benefits of it. 

Partner Recruitment

Recruiting the right Channel Partners is the first step for a successful channel program. Operatix has helped over 350 B2B Software vendors recruit suitable channel partners across EMEA and North America, supporting them to scale and expand their presence in different geographies and verticals. 

Risk/Reward Business Model

To truly work as an extension of our client’s sales & marketing teams, we have also adapted our business models to show how our clients operate, and how their success is measured. With our risk/reward business model your investment is proportional to the results our team delivers.

Sales Qualified Leads

On average, 52.5% of the sales engagements set up by our team progress into a next step in the sale process. That means that 5 out of 10 meetings will progress either into a POC, a Demo or a pipeline opportunity.

Geographical Scale

Trading in different geographical markets not only requires a knowledge of the native language, local rules & policies, but a deeper understanding of the local culture and habits. We have the ability to deliver campaigns in multiple countries with flexible resource allocation. This is through our team of international speakers, who have the ability to sell in 17 different languages across the globe.

Increase Revenue & Decrease Cost

Building an internal sales development team comes with many additional costs and challenges that aren’t always taken into account: recruiting resources, training and enabling them etc. You also need to take into account the need for having the data and tools to make them successful, which in turn requires time, capital and effort. By outsourcing your sales development to Operatix you will see your revenue increasing, while decreasing costs and business risk.

Predictable Pipeline Generation

On average, our clients see a 26X ROI on the programs we deliver. By understanding your revenue targets and sales pipeline gap, we will work on a sales & marketing plan that will deliver tangible results.

Vertical Growth

Entering new industries or launching new product lines? Operatix can accelerate your growth by supporting your go-to-market strategy, and getting your sales teams in front of decision makers in key target accounts.

Reduce Headcount

By outsourcing your sales development and partner programs to Operatix; we reduce headcount and the challenges that come with managing people, technologies, and processes. We take care of your sales development, so you can focus on what matters the most: growing your business.

Revenue Acceleration

Operatix helps your business get to revenue quicker. By providing qualified sales engagements for your direct sales team (to kick-off new sales cycles), or by accelerating the growth of your channel partners, our focus remains on delivering tangible results for your business. 

Persona-based Selling

Operatix team will design specifically tailored messages to influence the different levels of decision makers in the sales process, tailoring the communication according to each job function. Our focus is to sell the value of your solution from a business perspective, not its features.    

Recorded Testimonial: Bitglass

Fill in the form below and receive our recorded testimonial from Aya Fawzy, the former director of Bitglass.