If you deal with sales development, you need to be aware of the pros and cons of both hiring your own sales development representatives and outsourcing this function to a third-party vendor. We have prepared an article for you in order to help with the question of whether you should hire your own SDRs or outsource this function to another company. Let`s go through the main differences between in-house vs outsourced, in terms of results in the budget you should allocate as well as the time you should invest in taking the team off the ground.
Sales development representative role
An SDR (sales development representative) is a junior member of the sales department. He or she is responsible for generating new opportunities for your sales team. Therefore, all the main responsibilities lie around finding prospects, reaching out to them via email phone and social media, identifying prospects that are interested, and scheduling discovery calls and demos for your sales team. The vast majority of companies hire SDRs locally due to various reasons. Some companies prefer to keep the function in-house because they want to control the sales process A to Z. Some don’t believe in outsourcing in general and some things that the quality of meetings. Let`s continue and decide what variant is better for you.
Benefits of having your own SDRs
- Control. Having your own SDR in the office allows you to control the process which might be important for young founders and sales leaders.
- Education. As soon as you have an SDR in your office, working with your team chances are faster as this SDR will be educated on your processes, products, or services.
- Teamwork. When your in-house SDR is up and running if he has the ability to work with senior salespeople on your team. His transition to the sales role is highly likely to happen now.
Disadvantages of having your own SDR
- Big budget. According to glassdoor the average compensation for an SDR in the US is 49 000 per year with up to 22 thousand being added on top as performance bonuses. On top of that, you have to add hiring expenses, software subscriptions, and other associated expenses like space. That makes an average SDR loan cost anywhere between five and nine thousand us dollars per month. Considering your software expenses remain below 1000 a month which is not usually the case.
- Remote workflow. With a huge portion of companies switching to remote work, having an in-house SDR doesn’t make as much sense as it used to. Having a remote SDR is pretty much the same as having a team overseas, but two to four times more expensive.
- Scalability. Your team can only hire and onboard a certain number of SDRs at any point in time. It creates a huge lag between deciding on the volume of opportunities your team needs to generate and hiring all the team members to support that as well as getting them up to speed.
- Time investment. If you hire a junior person on the team somebody will have to manage the process which includes defining your ideal customer profile, making sure your SDR is going after the right type of prospects, preparing content for outbound campaigns, etc. So, with an in-house SDR, you have to factor in the SDR manager to make everything work. Otherwise, you will be spending days reviewing leads, writing email templates, and writing call scripts.
Benefits of Outsourcing SDRs
An alternative to hiring an in-house SDR will be outsourcing this function to another company. We will focus on working with vendors, not freelancers. Working with a freelancer is pretty much the same as having an individual SDR on the team, but a bit cheaper. So, why do companies decide to outsource this function? Let’s outline the primary process of having the company to do SDR work for you.
- Budget. The vast majority of companies that do lead generation are able to stop the whole SDR team of two to four people within a budget. That is just enough for one in-house SDR that increases value two to four times with the budget remaining the same.
- Growth. As lead generation companies have dozens or even hundreds of SDRs on the payroll they are able to scale the team both ways very fast. That means that as soon as you make the decision to increase the number of meetings for your sales team a lead generation company will be able to assign and train an SDR in a couple of days to a couple of weeks.
- Simplicity. As opposed to having an in-house SDR team with a lead generation company you don’t need to spend time reviewing links, writing email templates, call scripts, defining the strategy, etc. Lead generation companies have their own content departments quality assurance and project managers, which allows you to focus on your work and invest up to one to three hours per week in managing your efforts.
Disadvantages of Outsourcing SDRs
- Commitment. Most generation companies want you to commit to a 6 to 12 months contract prior to even doing a pilot or a trial. That’s risky so you have to pick the vendor very carefully.
- Education. Lead generation companies usually don’t want their SDRs to transition to a more serious sales role. Therefore, chances are that your SDRs will remain an SDR until the end of time and you would need to hire a salesperson instead of promoting your SDRs.
- Communication gap. Most generation companies are located overseas and even work during different business hours, which leads to a huge delay in communication, scheduling calls, etc. This one can really be fixed by hiring a company that works your business hours, which is pretty much the only way to go if you are planning to scale your efforts.
So, let`s summarize all points of House vs Outsourced SDRs.The process of having an in-house SDR team is the following: controlling the process that might be important for young founders and sales leaders; education as your SDRs will be able to transition to a more senior sales role in the future; teamwork as your SDRs will be able to work with other team members and learn faster at the same time. The cons of having an in-house SDR team are the following: the budget as it’s two to four times higher if compared to outsourcing; a wide adoption of remote workflow which destroys most of the benefits of having an SDR in-house; a huge time investment that is required from you.
Now let’s have a look at the process of outsourcing the SDR function. The first thing is the budget as it allows you to have a four times bigger team when you outsource. The second one is scalability as you can scale the team both ways within a couple of days to a couple of weeks. The third one is simplicity as you don’t need to buy software, hire content writers, or define the strategy. Everything is being done by the lead generation company. The cons of outsourcing SDR function would be the following: the commitment as most companies want you to sign the contract before you try out their servicesб which is super risky; education as most SDRs won’t transition to a senior sales role; a communication gap as some companies work different business hours and don’t respond in a timely manner.