An effective sales team is critical to the success of your company if you want a predictable, repeatable and scalable sales engine. Deciding whether you should consider SDR outsourcing or internally hire your SDR’s is a decision worth evaluating. Today, we’ll walk you through the decision-making process going through three important factors to consider. A Sales Development Rep (SDR) is responsible for taking prospects gathered through demand generation activities and turning them into actionable leads and sales discussions. Your SDRs are imperative in qualifying inbound prospects and generating new leads from outbound efforts.
SDR Outsourcing – Typical Conversion Funnel
Cost of SDR Outsourcing vs. an Internal Team
Perhaps one of the most overlooked pieces of deciding if SDR outsourcing is right for you and arguably the most important factor is the cost. According to The Bridge Group, an inside sales consulting firm, the average tenure of an SDR is a measly 16 months.
Hiring an internal team means having to constantly manage fluid processes, expensive tools, and consistent lead targeting. Now, anyone who understands hiring understands that hiring is incredibly expensive. The average rule of thumb on sales team hiring is 50% burden on annual salary. So, for a SDR making a base of $50,000, the associated costs on hiring would be an additional $25,000.
Let’s start with job postings– how long will it take you to find the right talent? How many websites are you going to post on? How many interviews? What portions of management (or peer) time is spent in interviews? How about normal HR burdens like background checks or benefits administration? These costs (often hidden) should factor into the decision calculus.
Our internal research shows the annual total cost to manage even a 2-person SDR team is $330,729 annually. We calculated this by including team salaries, team tools (software, phone), manager’s base, time spent allocated to the SDR team, overhead (rent, equipment), hiring and training costs. When you begin SDR outsourcing, you can largely eliminate costs of recruiting, onboarding, training, and retention. For comparison, for a dedicated SDR Team at CIENCE (2 full-time resources, Customer Success Manager, and all support services), you’re only paying $4,400 per month (< $50,000 Annual with 12-month payment).
The cost impacts of not going the DiY (Do It Yourself) route can be less than 1/6 the total. When thinking about a lead generation budget holistically, this attractive pricing is a good place to start. SDR outsourcing is becoming more widely considered once companies realize they can get the same (if not better) results for dramatically less cost.
There are huge performance implications to managing what is essentially a thankless job largely staffed by sales newbies– the average required experience (though increasing) for SDRs is a mere 1.8 years! Those with less than 2 years of background in frontline sales development means the performance burden falls squarely on the management of these junior employees. Once you hire your SDR’s internally, the manager needs time to learn how to work with each candidate and discover how to motivate each employee daily.
Aside from daily tools SDR’s needed to track progress, organize and communicate, you must also account for sales enablement technology and the training involved to learn its usage. SDR outsourcing is beneficial when you don’t want to pay for high-quality tools but still want ROI driving performance.
Another important note to highlight is that your internal team will often have lowered morale from lesser value tasks. Compounding the low average tenure of most SDRs is the constant need for promotion, or at least a career track. This creates an inherent cost center, where SDRs are forever working themselves out of jobs, either because of promotion or flight. The need to backfill positions constantly brings a significant amount of pressure to any organization.
Conversely, outsourced teams of sales development reps can offload tasks and be directed in ways that you– as a client– specify. Further, in practice outsourced SDRs typically increase productivity the longer they stay with an account. A good rule of thumb-any menial tasks should be outsourced for best performance.
Lastly on performance, gathering targeted, accurate prospect data– crucial to sales development campaign effectiveness– is anathema to most sales professionals. This research role is as time-consuming as it is grinding. Many salespeople argue it’s the opposite of sales– it’s administration. A good rule of thumb– think of any menial tasks that can be outsourced, should be, for best performance.
Building and managing an SDR team usually requires a fair amount of trial and error and an abundance of time. Decisions like deciding which compensation models work, dealing with attitudes, loss of motivation, and outreach methodology are just a few of the issues that come to the surface when managing your internal team.
Internal sales teams often don’t work align well with marketing teams which cause organizational issues that continually deepen. SDR outsourcing allows you to give direction and saves tremendous time, while your outsourced team takes the time to test tools, messaging and processes, as well as discover your ideal customer profile.
SDR’s typically spend most of their time in research and prospecting which leads to burnout. On average, SDR’s spend three hours a day on the research itself. Imagine the amount that could be accomplished during that time. SDR outsourcing and working with a good lead gen company allows you to have a fully qualified sales pipeline.
As the SDR function becomes more mature, companies continue to explore innovative ways to accelerate growth and get the best leads into the hands of sales teams. Building a strong outsourced SDR team can provide a strategic option for scale without unnecessarily burdening sales leaders or distracting from their core objectives.
To Outsource or Not to Outsource?
There are many things to consider when considering SDR outsourcing. However, sit down and evaluate turnover, burn out, and cost involved with hiring and training your inside sales team. Then think through optimal performance of a sales development program.
You may find better luck outsourcing.
Our SDR teams at CIENCE are trained to become an extension of your team, truly getting to know your business goals. We provide an in house copywriter to learn your business tone and voice and work with you to develop messaging that reflects your brand. Our research team is highly educated and their job is to focus only on research, assuring every contact and lead is high quality. Our SDR’s become part of your team and get to know your business while working your hours, helping your business thrive and grow. Book a meeting with CIENCE today and see how SDR outsourcing can help your ROI and save you money.