Outsourced vs. In-House Lead Generation Teams: Which Is Best? The Debate Continues
It can be tough to know whether to build a team from scratch or enlist the help of a specialist lead generation agency. There are pros and cons to both options, but you’re likely to find one that appeals to you more than the other.
In-house vs. outsourced lead generation teams: A comparison
If you’re considering building your lead generation activity, now’s the time to decide which path to take. Let’s take a look at some of the pros and cons of outsourced vs. in-house lead generation teams to see how they compare.
One of the major deciding factors for the route you choose is likely to be the financial investment. You’ll want to take both upfront and ongoing costs into account when deciding whether to outsource or build an in-house team. We’ve explored this in an earlier article, outsourcing your telemarketing or running it in-house – the real costs of hiring your own telemarketer, which you can read here.
Firstly, there’s the baseline salary that you pay. The average salary for a sales representative in Australia is $69,700 per year. That doesn’t take into account other pay like bonuses, profit share or commissions, or Superannuation. Combined you could be looking at close to $95,000 per year.
Once you’ve worked out the salary costs, you also need to account for overheads. This includes everything from the cost of calls to the rent you pay on your office space. You’ll also need to build in costs for recruiting, training and managing your team. The bigger your team, the higher your overhead costs. You’ll need to allow for up to $21,000 per year per agent, for equipment, software, training, call costs and recruitment, as we showed in our article where we explored the real costs of hiring your own telemarketer.
With an outsourced lead generation agency, you’re paying one fee that covers all of this. You get the agents working on your behalf, their equipment, software, training and all other overheads. It’s often more affordable to go down the outsourced agency route—especially when you consider the heavy initial investment required in building an in-house team.
Time and resources
Building a sales team in-house is a huge effort. Not only do you need to invest financially, but you’ll need to dedicate time and other resources to make it a success.
There’s a heavy amount of time and resource required to grow a successful sales team. Firstly there’s management of your team. You’ll need to have processes and support for HR issues, with a management structure that enables your teams to do their best. There’s also a need for support with recruitment and both initial and ongoing training. You can’t just sit your new team down and expect them to perform consistently without giving them good training, management and motivation on an ongoing basis.
The benefit of having your own in-house sales team here is that you have complete control over the way people are managed and supported. You can design processes and strategies the way you want them. However, you also have to remember that sales agents will leave or look for a promotion, so you will need to replace them when this happens.
Lead generation agencies take care of their own management, recruitment and training. This means you don’t need to worry about the costs or practical side of advertising, hiring and onboarding your new sales representatives, or to replacing them if they leave. You’re free instead to focus on other areas of your business. There’s also no need to consider hiring cover for holidays, as your outsourced team can be available to you for 52 weeks of the year, which is a considerable upside, compared with your own staff who take at least 4 weeks annual leave, plus public holidays and sick leave. You don’t pay for any of this when you use an outsourced provider – you only pay them for the time they are working for you.
Strategy and processes
Campaign management is one of the most important areas to get right, whether your sales team is in-house or outsourced. It’s the strategy, processes and expertise behind a campaign that influences whether it’s successful or not.
It takes time and energy to set up, test, refine and manage sales and lead generation campaigns. There’s also a considerable learning curve if your sales agents are new to the industry.
If your team is inexperienced or the strategy isn’t quite right yet, this can quickly become a drain on resources. It can take up to 8-12 weeks for you to identify the effectiveness of a campaign, as there’s little to benchmark against. It’s easy to lose time and waste resources running campaigns that don’t deliver results.
With a high quality, experienced lead generation company, they’ll know within two weeks if your campaign is working or not. As they’ve run campaigns for multiple businesses, they can use data and experience to identify trends and potential issues. This expertise is one of the reasons why lead generation outsourcing is reported to be 43% more effective than generating leads in-house.
Outsourced lead generation companies are also more likely to have effective systems and processes in place. They’re designed to deliver the best results in the most productive way, based on experience of running multiple campaigns. With an in-house sales team it’s harder to set up processes from scratch. You may not know whether a process is effective or not, as there’s little to evaluate it against.
Reasons to build an in-house team
Many businesses choose to build an in-house sales team. This gives them a greater level of control over who they hire and how they work.
There are lots of reasons to build an in-house team. With this approach you can:
- Build a team from scratch and nurture them
- Define your own sales strategy and direct how it is implemented
- Develop bespoke systems and processes
- Control which projects your sales team works on
- Have agents whose sole focus is selling your products or services
Reasons to outsource your sales operations
A lot of companies go down the route of outsourcing sales operations to a lead generation agency. There are lots of benefits here, including both financial and time management savings.
There’s a reason why it’s become such a popular approach. With an outsourced sales team you can:
- Get good value for money with a lower upfront investment
- Access the talent and expertise of a range of sales professionals
- Start a campaign quickly without a long period of onboarding or training
- Gain an understanding of whether your campaign works and what level of success to expect in less time
- Spend far less time to manage the setup and ongoing operation
- Let someone handle your lead generation operation so you can focus on other areas
Outsourced vs. in-house sales teams: which is best?
There’s no “right” answer as to which approach is the most effective. The best option is the one that most suits your business and needs, so take some time to consider these before you make a decision.
There are benefits to both approaches. Evaluate the pros and cons and decide which is more likely to deliver results for you. Consider your budget, resources and plans for the future. Think about which outcomes are the most relevant and how quickly you want to see results.
Whichever option you choose, it’s important to approach your next sales campaign with a positive view. It takes time for a new team to get up to speed, whether they’re in-house or outsourced. Give your agents plenty of support and work in collaboration with your outsourced team to see the best results.
For a full guide on how to create an effective prospecting strategy to power your next campaign, read my book—”The Ultimate Guide to B2B Sales Prospecting”. You can download the entire book and the first two chapters free to help you get started.