Hiring an Outsourced Sales Provider: Some Red Flags to Keep in Mind

hiring an outsourced sales provider

Numerous studies have demonstrated that midsize and large businesses can gain a competitive edge by outsourcing their sales operations, as opposed to retaining them in-house. Nevertheless, it is imperative to recognize that sales outsourcing, similar to any other outsourced endeavor, carries inherent business risks. This is why it is crucial to thoroughly evaluate your company’s requirements, objectives, and capabilities before making a decision on whether to outsource or retain sales activities internally. To minimize risk and avoid outsourcing problems, beware of these internal red flags:

#1. Vague Financial Goals for the Outsourcing Project

The primary motive behind outsourcing sales for most companies is cost reduction. Consequently, it is imperative to effectively communicate financial objectives to the outsourcing provider. Unfortunately, numerous firms neglect this crucial step and only realize their oversight when it is too late, and the outsourcing project fails to yield any improvements in revenue or profitability. When cost is the key factor driving the decision to transfer sales responsibilities to an external firm, it is essential to ensure that the outsourcing initiative is guided by return on investment (ROI). In order to achieve this, CFOs, managers, and sales executives should collaborate closely to establish realistic, measurable, and comprehensive financial goals. These goals should then be effectively communicated to the outsourcing providers to foster a shared understanding of expectations.

#2. Outsourcing for the Sake of Outsourcing

A common pitfall that some companies encounter is entering into outsourcing arrangements for sales functions, such as lead qualification, without possessing sufficient knowledge about the specific process. When there is a complete lack of understanding regarding a sales process, it becomes challenging to assess the success or failure of the outsourcing project.

In addition to defining success in financial terms, it is crucial for sales managers to articulate a compelling case for outsourcing based on specific goals. These goals will vary for each company and should be tailored accordingly. Are you outsourcing sales to acquire highly skilled sales representatives, or is it because you are venturing into a new and unfamiliar market? Before committing to a sales outsourcing contract, it is essential to identify opportunities or challenges and determine the necessary resources required to address these issues effectively. By conducting this analysis, you can make an informed decision regarding sales outsourcing and avoid potential pitfalls.

#3. Unclear Performance Measurement and Monitoring

A successful sales outsourcing engagement should consistently deliver increasing value over time. It should not only enhance past performance but also proactively identify emerging opportunities and adapt accordingly. To ensure that the outsourcing provider adds value, it is essential to conduct regular and progressive reviews while closely monitoring key sales metrics. These metrics may include the number of contracts, appointments set, average orders and reorders, among others. However, it is important to strike a balance, as an excessive number of metrics and overly aggressive monitoring can overwhelm your sales force. It is unrealistic, for instance, to expect twice-daily performance reports from your sales representatives, especially considering the time it may take to close a lead, which could span months. Finding the right balance in monitoring and reporting will help optimize the performance of your sales team without undue burden.

#4. Inadequate Training and Support

A common reason for the failure of sales outsourcing projects is the lack of proper training for sales staff. Whether they are in-house or outsourced, sales representatives require regular training and support to excel in their roles. They need to acquire a comprehensive understanding of your product, business, and market in order to effectively generate leads and close sales.

When selecting an outsourcing firm, it is crucial to ensure that they have relevant industry experience and expertise in selling products similar to yours. Alternatively, if you choose to hire individual sales representatives or leads, it is essential to provide them with the necessary training and ongoing support to enhance their chances of success. By prioritizing adequate training and support, you can significantly improve the performance and outcomes of your sales team, whether they are internal or outsourced.

Outsourced Sales Service Provider Red Flags

Besides internal warning signs, you should also be aware of potential issues with the service provider. Here are some things to avoid when choosing a sales solutions provider:

#1. Unrealistic Promises

 Beware of sales solutions providers who make grand promises without offering a well-defined solution supported by thorough research and analytics. A reliable sales outsourcing provider comprehends the intricacies of your business, product, and market, and develops a customized solution that aligns with your specific requirements. Rather than offering a generic service, the outsourcing firm strives to establish a long-term partnership, where they actively share the risks and rewards associated with your sales initiatives. Their commitment extends beyond immediate results, as they aim to deliver sustained value over time. By selecting such a provider, you can ensure that your sales outsourcing arrangement is built on a solid foundation of understanding, collaboration, and mutual benefit.

#2. Focus on Cost Reduction Alone

While it is true that every outsourcing firm pledges cost reduction, solely fixating on costs rather than value suggests that the firm is primarily concerned with their own gains. A truly successful sales outsourcing endeavor requires a long-term commitment, and a reputable sales outsourcing firm will prioritize not just cost reduction, but also enhancements in quality, efficiency, and other advantageous outcomes they can provide throughout the partnership. By emphasizing these factors, they demonstrate their commitment to delivering tangible benefits and long-lasting value to your company.

#3. Unclear Sales Strategy

Be cautious of sales outsourcing firms that are reluctant to decline client requests, even when they lack the necessary expertise or resources. It is advisable, particularly for newly established companies without a sales or revenue track record, to avoid such firms. Instead, seek a partner who possesses relevant experience in your specific product and market. Developing an effective sales strategy is a critical aspect of your business, and it requires time and careful refinement to identify the optimal approach.

The initial year of selling a product can be seen as a testing phase for the sales strategy. If the chosen outsourcing firm fails to deliver a solid and well-defined strategy, it is prudent to explore alternative options and seek out a different company that can provide the necessary expertise and guidance. Remember, selecting the right outsourcing partner is vital to the success of your sales initiatives.

#4. No Metrics-driven Reporting

Steer clear of sales outsourcing firms that neglect to discuss performance metrics or fail to emphasize ROI-based measurement of success. Their oversight in addressing these aspects suggests that they may not prioritize performance or lack the necessary technology and capabilities to provide data-driven reporting. It is crucial to partner with an outsourcing firm that places a strong emphasis on tracking and analyzing performance metrics as well as evaluating success based on return on investment. By doing so, you can ensure that your sales outsourcing partner is committed to delivering measurable results and can provide you with valuable insights derived from data-driven reporting.

#5. Too Much Focus on Lead Generation

If the sales outsourcing firm focuses too much on the number of leads instead of quantity and quality, consider it a red flag. While lead generation is undoubtedly important, it is essential to recognize that the process primarily involves setting appointments for your sales force. On the contrary, generating high-quality leads leads to improved conversion rates and increased profitability. A reliable outsourcing provider should possess a comprehensive understanding of the entire sales process. However, their primary focus should be on effectively converting leads into sales. By prioritizing lead quality alongside lead quantity, the outsourcing firm demonstrates a commitment to driving meaningful results and maximizing revenue generation.

#6. Wrong Cultural Fit

People-related challenges contribute significantly to outsourcing problems, often more so than any other factor. When the outsourced sales force directly interacts with your customers, whether in person, over the phone, or online, establishing a suitable cultural fit between your business and the sales outsourcing provider becomes crucial. The objective is to present a seamless image to both your existing and potential customers. Therefore, it is advisable to select a sales provider that not only offers cultural compatibility but also ensures their representatives possess strong English language skills. This combination enhances effective communication, fosters customer satisfaction, and strengthens your brand’s reputation. By prioritizing cultural alignment and linguistic proficiency, you can establish a cohesive customer experience and minimize potential issues that may arise from miscommunication or cultural mismatches.

To learn more about outsourcing, you can read our Top 8 Qualities of an Outsourcing Company in the Philippines article. We invite you to follow us on social media and to visit our website to learn more about our services.

banner-finalAbout Us: Sourcefit is a widely recognized US-managed business process outsourcing company based in Manila, Philippines. We proudly serve over 100 clients with a workforce of more than 1,300 employees. Our global centers can serve multiple markets, and our staff is highly proficient in English, Spanish, French, and Portuguese. Whether you need a few or many employees, we can help you achieve your business goals and build high-quality offshore teams.

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Sourcefit’s commitment to excellence has been recognized through numerous industry awards and certifications.

We recently received the Fortress Cyber Security Award from the Business Intelligence Group. Sourcefit was also honored with the prestigious recognition of Best Outsourcing Solutions Provider in the Philippines during the 2023 Business Excellence Awards.

Other awards include: FT ranking of 500 high-growth Asia-Pacific, The Marketing Excellence Awards, Inquirer Growth Champion,  HR Asia Awards, among others.

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