Should Direct Sales Be Outsourced?
I just got this fascinating pitch letter via email:
Please allow me this opportunity to introduce myself and the company I founded, Sales Surge, whose flagship and cutting edge service is sales outsourcing.Well, I could rake this letter over the coals for being full of cliche buzzwords (e.g. "cutting edge", "speed of light") and unverified claims (e.g. "new trend", "reduce your cost"). It's pretty dreadful as a sales tool, which doesn't say much for the company that wrote it, but that's not the point. I'm more curious about whether this is a business model that makes sense.
While many companies have embraced outsourcing for their financial and information technology needs, few have considered outsourcing sales. But trends are changing. Sales outsourcing is a new trend and the next generation in sales strategy for business to business sales.
Most outsourcing decisions begin with cost-cutting, sales outsourcing is no different and the advantages do not end there. When your company is in the start-up phase, currently experiencing poor sales results or ready to expand to the next level of corporate growth, you need to focus your resources and attention on your core product or service and not on developing sales processes and hiring a sales team. By outsourcing this business process, your company will move at the speed of light and leverage the core competency of the sales outsourcing, we already have these systems and processes in place. Sales Outsourcing will reduce your costs at the same time increase sales results. As an added benefit, your company is getting the benefit of access to senior sales executives, sales coaches and sales trainers that perhaps you could not afford or justify.
As you are aware, sales can be the difference between success and failure of any company. I respectfully request your time...
If I understand correctly, he's not talking about channel sales, but of having another company actually manage your firm's sales function. Presumably the sales folk they'd hire would be selling only your firm's offerings. That sounded a bit nuts to me, at first, but...
I recently had a conversation with Howard Stevens, CEO of The Chally Group, about a related subject. Every few years, Chally polls thousands of customers about which of their vendors they like doing business with. Turns out that the organizations that are best at selling generally don't do anything else except sell. They generally don't make products or even market them. They just sell stuff, albeit with some value-added (primarily the business expertise of the sales rep.) See my post "Some Science of Selling" for more information about these firms.
The examples that Howard shared with me consist of channel sales organizations that handle multiple products from multiple vendors. But if you think about it, the concept of channel sales is not all THAT different from what the pitch letter is proposing. In fact, channel sales might be even more dicey, since you have to compete with other vendors for the rep's attention.
On the other hand, there's probably a value to have the sales team "linked in" with the rest of the company. Certainly it helps to be able to easily draw on resources like engineering and customer support when necessary to close a deal or keep a customer happy. And there's always the sales/marketing connection. Ideally they're supposed to be tightly linked, although in practice they're often at loggerheads.
But enough of my observations. I'm curious about what you guys think. Comments are welcome.
UPDATE (9/5): Check out "Does Outsourcing Threaten Sales Jobs?" post for a humorous take on sales outsourcing.