Should Direct Sales Be Outsourced?

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  ptiseo09/03/08 Report as spam
  1

  RE: Should Direct Sales Be Outsourced?

  What stuff do "sales only" companies typically sell: widgets, services, or both?

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  Geoffrey James, Sales Machine09/03/08 Report as spam
  2

  RE: Should Direct Sales Be Outsourced?

  QUOTE: What stuff do "sales only" companies typically sell
  
  Putting aside retail (which is a different case) and focusing on B2B, companies that are in the business of selling (as opposed to making things) sell products bundled with services, usually in some way that differentiates them from their competitors. See:
  
  
  
  http://blogs.bnet.com/salesmachine/?p=161

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  neshthompson09/03/08 Report as spam
  3

  RE: Should Direct Sales Be Outsourced?

  This is quite an interesting idea. As you say, this would have an advantage over channel sales in that there would be less competition, however the whole point in outsourcing is in cost cutting. Usually that means a lower quality or relocation of the department to a cheaper country. Somehow I don't think a call centre in India would work in B2B selling.
  
  Another thing would be the level of knowledge that the sales people have in the products they are selling. Usually training costs money which as already stated is not what outsourcing is about ergo less quality in identifying need and solving problems.

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  ken@...09/04/08 Report as spam
  4

  RE: Should Direct Sales Be Outsourced?

  In sales, the things that get compensated get done. A good salesperson will migrate towards the company that gets this and pays for the selling skills and contacts of the individual. I struggle to see a third party outsourced solution as the future.
  
  Also, if you outsource the sales do you outsource the marketing?

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  proeman09/04/08 Report as spam
  5

  RE: Should Direct Sales Be Outsourced?

  The other way to look at it is to realize that sales people, most often, in a small company are the ones who bring the ideas to the board about new products or services or enhancements in the both that the consumers demand. So sales team is not just an executor of sales function but is also an important asset to the core competency of the company (Product/Service Innovation). Unless an outsourced vendor has the required scalability to bring forth this important capability to the company outsourcing sales function might not be a great idea!

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  dhruvdp09/04/08 Report as spam
  6

  RE: Should Direct Sales Be Outsourced?

  This does not seem feasible in Enterprise Solutions sales. Also, do these guys have a standing in the market? How will the prospect perceive them? Or do these guys represent themselves as part of your organisation?
  This may be feasible for mass/generic products but doubt if it will work for advanced products.

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  scohil09/05/08 Report as spam
  7

  RE: Should Direct Sales Be Outsourced?

  Outsourced sales forces are really no different than insourced ones. What's required to sell effectively is the same: intimate knowledge of how the solution helps real customers solve real problems. Whether one is 1099'd or W-2'd does not change that.

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  Geoffrey James, Sales Machine09/05/08 Report as spam
  8

  RE: Should Direct Sales Be Outsourced?

  QUOTE: Outsourced sales forces are really no different than insourced ones.
  
  While I agree this could be theoretically the case, I'm not sure that it's true in practice. A big sales challenge is overcoming organizational barriers in your own company to get things done. Have the sales team in a completely separate company will inevitably impact that. And it seems to me that outsourcing could create more potential conflict between sales and marketing, if marketing remained in house. But I'm just guessing here, based upon what I've seen in channel sales situations.

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  CBragg09/05/08 Report as spam
  9

  RE: Should Direct Sales Be Outsourced?

  Outsourcing sales is a great idea but like any outsourcing initiatives is one that has to have a purpose beyond "cost cutting". Outsouring borne out of that reason is doomed for failure (yes it may cut costs but may cost twice that much in additional cost elsewhere in the organization). The company name on a paycheck won't make one salesforce more or less effective than another so not working directly for the company shouldn't be an issue. What is important in all of this is having a clear understanding of what is to be sold, and what it takes to be effective in selling. If a company is struggling in one or both areas, outsourcing may be a viable option.

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  Geoffrey James, Sales Machine09/05/08 Report as spam
  10

  RE: Should Direct Sales Be Outsourced?

  QUOTE: If a company is struggling in one or both areas, outsourcing may be a viable option.
  
  I'd want to see some better sales materials from the outsourcing firm than the one that this firm provided.

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  jomill200009/05/08 Report as spam
  11

  RE: Should Direct Sales Be Outsourced?

  Anyone ever heard of the word "distributor". That's the old term for the new "outsourced sales" organization. This isn't some new concept. Actually, it's a pretty damn old one.

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  Sid Herron09/05/08 Report as spam
  12

  They're called Manufacturers Representatives...

  ...and it's a very old sales model. 20 to 25 years ago, in the computer and datacom industries, it was common for companies to sign up manufacturers reps, and give them an exclusive territory. In return for that exclusivity, the reps typically didn't carry competitive products. They were compensated on commission only, but typically received commissions on ALL sales that went down in their respective territories. When managed properly, it could be a very tight relationship, with the rep firm truly feeling and acting like part of the company.
  
  The model started to break down when corporate executives who didn't understand the business model started objecting to paying commissions on ALL sales in a territory, even if the rep didn't directly generate the sale. Once this exclusivity was pulled back from the reps, the natural result was that they were no longer willing to agree not to carry competitive products. So the pendulum, at least in this industry, swung away from manufacturers reps and toward the VAR model that we see today.
  
  So there's nothing new here except the use of the "outsourcing" terminology.

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  scohil09/05/08 Report as spam
  13

  RE: Should Direct Sales Be Outsourced?

  QUOTE: Have the sales team in a completely separate company will inevitably impact that. And it seems to me that outsourcing could create more potential conflict between sales and marketing, if marketing remained in house.
  
  AS jomill2000 says, this is no different than having a distributor or manufacturer's rep. And yes, there will be conflicts between sales and marketing, but I am not sure how they would be any more serious with outsourced than insourced. Distance alone would not account for more (and in fact may help alleviate quite a few).

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  DFire09/05/08 Report as spam
  14

  RE: Should Direct Sales Be Outsourced?

  I was forwarded this article because I am an Enterprise Software Sales Rep who works for a sales outsourcing company. First of all, my sales career could not be better, I work for a sales minded company, the management has walked in my shoes and knows how to bring out the greatness in sales people. I work for one client and one client only. We were hired exclusively for our client, we carry the business cards of our client, we have the phone numbers and email address of our client. So, those of you who referred to us as Manufacturing reps, you are very wrong. I work from home but, frequent our clients location to work with the developers and the delivery team. I know we have other clients where the sales people work daily at the client site. Because we are a sales company, we receive weekly coaching as a group and one on one from a real sales coach. Our sales manager is just that, not the sales coach, he is a leader and motivator. I have more sales tools, unique sales tactics and resources than I ever had working for that Fortune 300 company and famous name and not so famous name software companies. I bet many of you cannot say the same, I know you can???t.
  
  One last thing, my client who I work exclusively for, never had better sales resuls

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  Geoffrey James, Sales Machine09/05/08 Report as spam
  15

  RE: Should Direct Sales Be Outsourced?

  QUOTE: Anyone ever heard of the word "distributor". That's the old term for the new "outsourced sales" organization.
  
  Yes, of course we've heard of that. But distributors typically carry products from multiple product suppliers. And most of them (in today's world) do some kind of value-adding or they go out of business.

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  Pammi09/05/08 Report as spam
  16

  RE: Should Direct Sales Be Outsourced?

  I want to say something without sounding well...tactless.
  
  Being an American (and an Indian as well), it irritates me when I call a company's Sales line or am contacted by a Sales person from another country (a result of outsourcing). Sure, outsourcing may help a company cut costs but I doubt that the company is yielding a lucrative Return on Investment. Why? Because firstly, money has to be invested to train this specific person on your product and industry. Secondly, you need to invest time to ensure this Sales person can productively convey your company's message. Now you're probably thinking, 'Well the same goes for an insourced sales rep.' YES, true, but the differenece here is that an insourced sales rep has a better understanding of the American market (or whatever country he/she is from) versus someone from a different land meaning you're sure to generate more sales than would be the case had the company used an Outsourced sales person.
  
  My experience with outsourced Sales Reps and even Customer Service reps is that they don't understand my needs and cannot deliver with the same quality that someone in-house can. Obviously there's always an exception to the rule, but I'm not talking about the exceptions...I'm talking about the run-of-the-mill outsourced employee.
  
  Lastly, Sales is about building Rapport with a consumer. Most outsourced Sales people are trained to put on their best impression of an "American" accent (I'm talking about calls received in the USA) and told to change their name to something "appropriate" for the sake of a sale. Now, I'm no dummy...I can make out "John Smith"'s foreign accent within the first few seconds of the call. My point is, this fa??ade put on by these Sales Reps is a sure fire deal-KILLER...because a first impression is a lasting impression...and if I feel as though I'm being taken for a ride within the first few moments of a Sales Call, I'm probably going to hang up, definitely not dish out dollars for the product that he/she is trying to sell me!
  
  And for the sake of argument let me mention the long hold and response times and unprofessional demeanor of some of those outsourced individuals with which I've been in contact.
  
  
  An employer has to remember, your employees (especially the ones that are in direct contact with your prospects) are the face of the company. Now it's up to YOU to decide what kind of image you're trying to portay.
  
  Do you want to cut corners and costs or offer VALUE and QUALITY?
  
  
  (If any of you have experienced outsourced Sales/Cust Svc Reps, you know exactly what I'm talking about)

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  Geoffrey James, Sales Machine09/05/08 Report as spam
  17

  RE: Should Direct Sales Be Outsourced?

  QUOTE: I want to say something without sounding well...tactless.
  
  Gee, if being tactless on this blog is a bad idea, I'm in deep doo-doo.

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  Ray89224409/07/08 Report as spam
  18

  RE: Should Direct Sales Be Outsourced?

  We considered becoming a sales outsourcing organization. We presently provide sales and sales management training.
  We considered:
  1. We will be hiring from the same geographic pool of sales people that the client uses. How would we improve on the resource pool? We cannot. The best sales people are successfully employed and not likely to make a change.
  
  2. Why is there a need for outsourcing? The sales managers, and the executives they report to, are not doing their jobs of proper recruiting, hiring, training and managing their direct reports. It is not a sales team problem; it is a management problem.
  
  3. Logically, outsourcing sales means outsourcing sales management. Can we identify superior sales management candidates? Yes, but, as is the case for superior sales people, they are successfully employed and are not likely to make a change.
  
  4. Will our investment of time and money justify getting into outsourcing B2B sales? No.
  
  We made these considerations within the context of our organization and its primary focus. We believed, in terms of long-term sustained sales improvement, that outsourcing sales and sales management would be a difficult migration for us and any company, .
  
  If the management of the target company is unsuccessful in managing the sales process, it will probably be unsuccessful in managing the outsourcing initiative. Problems await.
  
  It???s always a management problem.

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  Geoffrey James, Sales Machine09/07/08 Report as spam
  19

  RE: Should Direct Sales Be Outsourced?

  QUOTE from Ray89244: It???s always a management problem.
  
  
  True wisdom, in my view. Thanks for weighing in.

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  LouisBlueDragon09/12/08 Report as spam
  20

  RE: Should Direct Sales Be Outsourced?

  Outsourcing is not just about cutting costs. nailing my colours to the mast, I run a field sales and marketing company (www.bluewater-uk.com - no we are not a web designers and website needs an update) in the UK. From an outsourced perspective you are getting cost effectiveness, if not cost reduced though this possible, but also getting a specialist, expert, flexible and most important objective resource that will deliver. One where HR, management, measurement and motivational issues are taken on by us. How many times have your own sales forces been bedevilled because of the people issues. Syndicated sales (which many are talking about as Channel sales) have their place but solus is most effective, and couple this as well with database marketing support that allows us to target, evaluate and record what we are up to.
  Our oparticuylar area of scope is selling product (mainly B2B, but also B2C) rather than services, but there is no reason this model can not work. Equally there is the measure that at times when you need hunters you have farmers, or when you need farmers you have hunters and na outsourced operation can giev you flexibility if need be. As to age old objections of focus, ownership and knowledge, this like all good outsourced arrangements is about the cultire, dynamic and partnership of that arrangement that treats such people as a part of your organisation. As confucious was reported to say; you can lead, but i may not follow, you can tell, but I may not listen, but if you involve I will understand. It is never about who emplloyes them. It is about how they are involved, and then managed.

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  blue1701/20/09 Report as spam
  21

  RE: Should Direct Sales Be Outsourced?

  A company just hired my company to do direct sales for them, I truly beleive that we will be able to help this company although we have no experience in the field that they are in. We do however have many years experience in marketing and cold calling. For outsourcing to work it all has to do with the numbers and whether or not it will make sense at the end of the year to outsource your sales. In this example we are selling a civil engineering service, we have a contract for so many hours a month that is dedicated to this company. Looking at it over a years time it will cost this company around $30,000, With that being said we need to bring in two new customers with a some what sizable project. If this company hire a full time sales person they would have to pay at least $40,000/year in salary, gas expense, car insurance, workers comp etc... their real cost could be as much as $50,000 a year., I am not saying that all salesmen are the same but a typical saleman in the service industry who is not looked after and required to turn in proper documentation each week will actually work about 28 hours/week and get paid for 50 hours( if their on salary) so in my opinoin sometimes it makes sense sometimes it does not.

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  blue1701/20/09 Report as spam
  22

  RE: Should Direct Sales Be Outsourced?

  hello

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  Educated Worker04/24/09 Report as spam
  23

  RE: Should Direct Sales Be Outsourced?

  It comes down to expertise. If a company does not have the internal expertise to recruit, hire and manage a strong team, then they should look to outsourcing. Could they hire the right people? Sure. The one person above said "we hire from the same pool." Yes and no. A sales organization, especially a good outsourced one, gets top people coming to them because they want to work for the best and an outsourced sales organization knows how to treat top producers. Great salespeople will shy away from a company with a track record of poor sales management and with today's Internet (like right here) it's pretty easy to know where a company stacks on this.