What is BDR outsourcing?
BDR outsourcing is when you use BDRs from a third-party company for your sales development instead of building your own team of internal BDRs.
The outsourced BDRs will perform the same duties work company-employed BDRs will normally do. They will do typical business development work like lead generation, appointment setting, outbound outreach, and lead nurturing, but they will be on the payroll of a third-party company.
An outsourced BDR team can be beneficial for small, growing businesses because it can provide a higher level of business development and reliability than they could achieve with their own sales team.
Because BDR services companies are specialists and experts in sales, their BDRs are highly trained and experienced people who would have been the same job for a long time. By outsourcing your sales process with external BDRs, you immediately tap into this expertise and experience.
Let’s look at the advantages of using outsourced BDRs:
Benefits of BDR Outsourcing
I recently spoke with a friend who is in charge of her company’s sales department. She told me that they had been trying to fill a Business Development Representative (BDR) position for months but couldn’t find the right fit.
They had even considered outsourcing the role but weren’t sure if it would be worth it. After doing some research, she decided to give it a try and outsourced their BDR function – and she hasn’t looked back since!
It has saved her company money and also improved their sales pipeline significantly. Here are some of the key benefits she found:
1 Faster disaster recovery
When your company is dealing with an emergency, like negative press, that threatens to undo all your hard work, a team of experienced outsourced BDRs could be exactly what the doctor ordered.
In this regard, an outsourced BDR is a type of backup and disaster recovery service provided by a third-party company. It’s a staffing solution for bootstrapped startups with limited capital:
2Savings on staff-related expenses
Outsourced BDRs can be less expensive than if a business were to implement its backup and disaster recovery solution. Managing an internal sales team comes with many costs and responsibilities, including bonuses and commissions, medical aid, and retirement benefits.
If you used outsourced BDRs, you would not have to incur the costs associated with full-time employees. They will be the responsibility of the BDR company.
Outsourced BDRs can also be retained only for the period they are needed, a luxury you don’t have with an internal team because of labor laws.
This benefit applies particularly to businesses that are not generating enough inbound sales leads that would occupy BDRs month after month.
3 Immediate access to BDR tools and proven processes
For small companies, it can take a while to develop and perfect your own internal sales systems. Outsourced BDRs on the other hand, will be more familiar with these processes and are able to hit the ground running.
What’s important is to outsource your lead generation to BDRs that have experience in your industry. Unlike new hires that will take time to establish their connections, outsourced BDRs will already know the decision-makers in your industry and won’t struggle to get through to the right people.
4 Gives you a local presence in an unfamiliar sales territory
If you sell your product across borders, it can be difficult managing a geographically dispersed sales team. Never mind the logistics of it all, an outsourced BDR from the local area gives you the advantage of local knowledge, cultural awareness, and a language proficiency you would never get with your own sales team.
Common Mistakes Companies Make With BDR Outsourcing
Before you outsource your lead generation and other sales processes, it’s crucial to take your time considering all the variables. Without this, you can end up paying more than you could with your own internal team or fail to the results you desire because the BDRs outsourced to you are unmotivated and ineffective.
Let’s look at the common mistakes companies make when outsourcing BDR functions:
1 Neglecting the Importance of time-logging when comparing outsourced BDR to in-house reps
Time tracking is extremely important when measuring the success of an outbound sales campaign. If both teams are spending time on separate tasks, you won’t be able to compare their results accurately. Track how much time each team member is spending on activities like prospect research, follow-up, and appointments.
Before evaluating any groups, it’s important to have a system set up to log your time accurately. This will ensure accurate comparisons.
This will enable you to track how much time you’re spending on each of your appointments, which is a crucial metric that’ll ultimately help determine whether or not you should hire an answering service.
Sales time is the most important cost in any sales process. If you don’t measure the time your reps spend on different campaigns and activities, you’ll not understand your process.
The decision to entrust your sales team to a BDR company can be difficult. This is especially true for businesses that are new to the concept of outsourcing.
Many organizations adopt a hybrid approach to lead generation, using both outsourcing and insourcing. They do this until they can determine which method generates the most meetings and revenue.
But how can companies compare an outsourced appointment-setting service to in-house reps? What are the key differences, besides the number of appointments set, that should be considered?
Let’s get into the details.
2 Underpaid, unmotivated outsourced BDRs
When companies compare their internal BDRs to outsourced customer acquisition, they often fail to consider the total cost of hiring and training.
Outsourcing your business’s BDR services can save you money in the long run, as you will not have to worry about covering the costs of training, benefits, and other associated expenses.
But there is a caution to be sounded here:
When considering to outsource sales prospecting, you may notice that some companies charge a “fully loaded” price similar to your employee’s annual salary.
If this is the case, check out the company’s reviews on sites like Glassdoor. This can give you insight into the company culture and whether or not the BDMs there are happy, which can impact their performance.
These BDRs are often paid very little, and this causes them to have very low morale. This, in turn, leads to them not performing as well as they should.
When this happens, the supposed benefits of sales development rep outsourcing are lost.
A satisfied BDR is a more productive one, and you don’t want to work with a company that is losing its salespeople because you will be the one dealing with that. That is the hidden cost of BDR outsourcing that you need to consider before going this route.
3 Are your outsourced BDRs truly well-trained and experienced?
The third common mistake that companies overlook when assessing their outsourcing partner’s performance is the need for consistent operations.
When you outsource your BDR team, it’s important to ensure that the company you’re working with has a consistent process for recruiting, training, and replacing employees. This will help to ensure that your team is always operating at peak performance.
Given how high the turnover rate is for salespeople, companies invest a lot of money in hiring and training new reps.
Are you sure your outsourced reps are performing up to snuff? Are you just depending on a few superstar employees, or are you building a strong team?
Cost Per Sale: The Key Metric to Consider With Outsourced Sales Development
The most accurate way to judge the productivity of your outsourced BDR team compared to your internal sales team is by calculating the Cost Per Sale (CPS).
This CPS calculation takes all of the monetary differences between your two teams into account to see which type of team has more success. By monitoring the cost-per-SALE, you can ensure that your top-of-the-funnel is filled with qualified leads that are highly likely to convert into paying customers.
The ultimate measure of a BDR team is how many new, highly qualified opportunities for your sales team they generate.
Once you have figured out how much each of your two salespeople costs per month, you can divide that number by the total number of meetings they each had.
The sales team that is best at generating sales at the lowest costs is the team you should invest the most in. This team excels in lead generation and is the most efficient.
BDR Outsourcing Can Be a Viable Strategy for the Right Sales Organization
Hiring an internal BDR is costly, as you have to pay their salary, plus their benefits and tax expenses. You are also paying out a lot of money for benefits that include health insurance, commissions, and training.
When you hire an outsourced BDR team, you pay a monthly fee that covers all costs associated with hiring, managing, and training your salespeople. Companies that fail to recognize this spend more by maintaining their internal sales force.
While in-house teams may perform similarly to a BDR service, an outsourcing company’s model is more scalable. This is because it does not depend on keeping one or a few top-performing employees.
If you’re looking for a way to improve your sales pipeline, outsourcing your BDR could be the answer. The benefits of an outsourced bdr include cost savings, an improved sales pipeline, and access to experienced professionals.
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