Sales development is a key driver for the success of any organization, ensuring that leads are identified, properly qualified and identified as a near term prospect before being swiftly transferred to sales representatives when the likelihood of a sale is high.
As we know, sales development is complex, requiring an experienced team, dedicated sales development tools, and the right management to take Marketing Qualified Leads (MQLs), and turn them into Sales Accepted Leads (SALs) through lead nurturing and personalized engagement.
The importance of sales development isn’t in question, but what is hotly debated is whether an organization should have an in-house, outsourced, or blend of both sales development teams.
Throughout 2022, we saw some interesting findings, revealing which way the wind is blowing.
In our 2022 survey of 399 large companies (average of 10,400 employees) from all over the world, we found that a whopping 73% of respondent organizations now use a blend of both approach to sales development, seeking to benefit from the advantages of in-house and outsourced sales development, while minimizing the disadvantages.
Compared to our 2021 survey, where only 53% of respondents were using a blend of both sales development approach, we see powerful signals to suggest that blend of both is fast becoming the method of choice for sales development.
Read the full report here for more sales development insights:
The Sales Development Landscape Survey 2023
In this article, we discuss the advantages and disadvantages of each type of sales development method, and provide insight into why the blend of both sales development teams is becoming more popular.
Pros and cons of full in-house sales development
First off, let’s start with in-house sales development advantages and disadvantages.
Foremost, the major advantages of an in-house sales development team are control and visibility. Similar to an in-house sales or in-house marketing team, all aspects of strategy, management, technology, structure and personnel is managed by stakeholders within the organization.
As you might expect, an in-house sales development team will have a naturally close working relationship with marketing and sales. This can make the interaction between each department transparent, helped by close knit bonds. For example, in-house sales development representatives may have an easier time engaging with sales colleagues to hand over hot leads, or discuss successes and challenges during the lead nurturing process.
Related: What is holding your sales development team back?
In addition, in-house Sales Development Representatives (SDR) can rapidly share insights with marketing colleagues, and vice versa, regarding the lead qualification process to highlight areas of improvement.
What are the advantages of in-house sales development?
There are many advantages to in-house sales development, which largely fall into the following categories:
- In-house sales development offers open communication: In house SDRs can easily broadcast important information to other departments regarding leads and strategy
- In-house sales development ensures full team control and training: In-house SDRs ensure the ability to hire and shape the team as the organization sees fit, and shape a team to have certain skills and experience.
- In-house sales development will ensure staff are more invested in the company and culture: In-house SDRs will have greater ability to represent the organization and champion company values when engaging leads.
In-house sales development enables full control of strategy: Your organization will have full control over SDR strategy, from technology, to lead nurturing tactics, objectives and more.
What are the disadvantages of in-house sales development?
While there are several advantages to in-house sales development, there are an equal number of disadvantages that are making organizations think twice about this approach.
For the most part, in-house sales development control can be a double-edged sword. With an in-house team, you must consider factors such as the costs of hiring and training a full team, dedicating resources to manage the team, the costs of purchasing sales development technologies, reducing workforce churn, office space, data management and more.
In our annual survey, respondents consistently picked out 2 challenge areas in running an in-house sales development team. 83% of respondents stated:
- “We do not have the flexibility we need in terms or resource and expertise”
- “We do not have the management expertise to run the team effectively as their in-house sales development challenges”
The survey also revealed that some challenges were more apparent depending on job titles.
- Executives, VPs, and senior VPs said that the inability to hire and retain staff is the biggest challenge (42%), followed by a lack of management expertise to run in-house sales (40%)
- At the director + level, the highest percentage of respondents’ views managing costs effectively (42%) as the biggest challenge
- At the manager+ level, the biggest concern was the lack of flexibility when with resource allocation and in-house sales development expertise (71%)
Pros and cons of fully outsourced sales development
Nurturing leads to take them from MQLs to SALs is a resource intensive and time-consuming activity. Leads need more nurturing than ever before to feel they are ready to make a purchasing decision. Because of this, the sales process has become longer and more complex. SDRs need to have their finger on the pulse of your target market to understand customer challenges, so they can offer viable solutions to those challenges and foster relationships.
Because of this complexity, there is a strong case for organizations to outsource sales development to gain quick access to sales development expertise in one cost package. In our annual survey, most respondents expect that a higher percentage of their sales development will be outsourced over the next year (66%).
In comparison, when we asked in 2021, most respondents stated that the level of outsourcing will not change (48%). This represents a significant increase in respondents aiming to outsource more of the SDR function to ensure the sales pipeline keeps flowing.
What are the advantages of outsourced sales development?
- Outsourcing saves time and money: By outsourcing sales development, you sidestep the major costs and time needed to develop and successfully manage a full functioning sales development team. You can get immediate access to the knowledge, technology, and know-how of an organization that follows sales development best practice daily.
In addition, an outsourced sales development team will work with your organization to make the sales process smooth and seamless, leaving your sales team to focus on converting high quality leads and not sales development tasks.
- Outsourcing ensures sales development is focused on the task, not company politics: Without strong organization-wide buy-in, and a driven management team, an in-house sales development team may be overlooked in favor of sales and marketing regarding resource allocation. In addition, sales development may get drawn into marketing or sales activities during busy periods, which is a misuse of SDR resources.
- Outsourcing frees up resources to further develop marketing and sales: Rather than diverting a vast sum of funds to develop an in-house sales development team from scratch, you can use those funds to further develop your marketing or sales teams. Whether that entails increasing the headcount, buying new technologies, or running more events, outsourcing offers the opportunity to use to resource existing departments.
- Outsourcing is the fastest way to gain sales development capabilities and local skills (such as language): It can’t be stressed enough, but developing an in-house sales development team takes time. And even when you have a team in place, the high demand for experienced SDRs will ensure that your team will consistently experience churn.
By outsourcing sales development, you leave the hiring and coaching in the capable hands of an experienced organization that lives and breathes sales development, and has the methodologies and skills in place to retain highly skilled SDRs. In-fact, there are many skills that an outsourced team can actively bring to the table to help you navigate new waters and markets.
For instance, the highest relative percentage of respondents in our annual survey selected “gaining access to language skills” as the biggest reason to outsource sales development.
What are the disadvantages of outsourced sales development?
While outsourcing sales development has several advantages, there are several disadvantages to consider.
- Outsourcing sales development can involve trial and error to find the right partner: Sometimes, the organization you outsource with may not be suitable for your organization. The outsourced SDR team may be unfamiliar with your product types and markets. As you might expect, this can be resolved by ensuring you thoroughly research the company you intend to work with, and even trial their services.
- Outsourcing sales development leads to less control: A common concern when outsourcing is the potential loss of control and lack of oversight regarding the lead nurturing process. Likewise, there are also concerns that you might lose lead data and information. It is vital that you outline the working relationship you would prefer when considering your outsourcing options..
- Outsourcing sales development results in inefficient communication: In our survey, the highest relative percentage of respondents see communication as the most important characteristic of a successful SDR team (13%).
Organic communication and connections that are built in house can be incredibly valuable to promote company culture and close working relationships.
Respondents in our annual survey shared a similar story when asked what the biggest challenges are to outsourcing sales development. The highest percentage of respondents picked data protection and compliance rules as the primary roadblock (48%), followed by pricing (48%), and last, the desire to keep sales development knowledge in-house (45%).
The solution: Blend of both sales development
A hybrid sales development approach is fast becoming the most desirable method of gaining sales development capabilities, quickly and inexpensively.
Three out of four organizations from our annual survey use the blend of both resourcing models for their sales development function. Meanwhile, the number of respondents from our 2022 survey that stated they will move towards “in-house only” has reduced substantially compared to 2021 results, by 55%.
How does a blend of both sales development function work?
A hybrid sales development team combines your in-house sales development team, and combines it with the technology, know-how and resources of an outsourced sales development team. The outsourced sales development team will help you develop sales development strategies and keep you on the front foot with market changes, local knowledge and lead insight.
Let’s explore why organizations are moving away from in-house only, towards a blend of outsourcing and in-house sales development.
What are the advantages of blend of both sales development?
- Blend of both sales development enables organizations to swiftly respond to the market: A hybrid approach offers broad flexibility to leverage expertise and technology that would typically require huge resource and time investment.
This is where hybrid shines. An outsourced sales development team will enhance your in-house team with access to the latest sales development technologies and strategies, and will help you better engage with leads.
- Blend of both sales development will help your organization scale: A transition towards hybrid is often viewed as a sign of maturity. When organizations get larger, they typically have an in-house team and an outsourced team, and sometimes multiple outsourced vendors to help with different tasks and target markets. This way, your in-house teams can tackle segments they are familiar with. Meanwhile, outsourced teams can target new markets.
- Blend of both sales development improves market understanding: A blend of both enables a more involved lead nurturing process. If you have an outsourced sales development team working alongside an in-house team, you significantly improve your ability to understand how effective your lead nurturing strategies and SDR engagement is.
An outside SDR team, with a fresh perspective, can work wonders on your market learnings. A good outsourced SDR team will record every engagement, conversation, and every piece of feedback they get from leads, as well as their own feedback. With this valuable information, your in-house and outsourced teams can work together to gain a better understanding of success and challenges and promote improvement.
- Blend of both sales development helps you target new markets and lead segments:
With the expertise of an outsourced sales development team, you can break into new and uncharted markets to boost your revenue. Diving headfirst into a new market is often difficult, and it can take a substantial amount of time to make headway if your in-house team has to reinvent the wheel if the target market requires substantially different engagement strategies.
This is where an outsourced team can help you benefit from the experience and history of the outsourced team that may have a track record in the territory your organization is aiming to target, which will help you tackle the challenges that come with it, such as language barriers. Outsourced teams operate all over the world, and can be your representatives and introduce your solutions to foreign regions.
Want to enhance your sales development capabilities with a blend of both approach to sales development?
Organizations returned to the blend of both strategy during 2022, with 73% of respondents in our annual survey now combining in-house and outsourced sales development. This is the highest level of adoption we’ve seen during the three year period in which we’ve been running this survey, and as we have discussed throughout this article, it is easy to see why the wind is blowing in this direction.
Has your organization struggled with full outsourcing or full in-house sales development? If you are aiming to move away from in-house sales development, want to try outsourcing, or a best of both approach, get in touch. Foundry SDS is a leading Sales Development Service who provides specialist, high quality outsourced business development teams for technology vendors to improve their lead nurturing strategies.
We have experience helping organizations all over the world enhance their in-house sales development team with the expertise and experience of our outsourced teams. Outsourcing is a great utility for organizations that have finite funds resources for staffing and training an in-house sales development team. Outsourcing provides access to skills, people, technology, and expertise in a comparatively small cost package when compared to an in-house team.
Our services help clients manage costs, improve conversion rates, and reach peak performance, without changing their in-house infrastructure.
What does our service look like?
- Multi-touch and multi-channel: customizable to your requirements
- Scalable: available for national, regional, or global campaigns in 40+ languages
- Transparent, honest, and data-driven: a structured schedule of meetings to discuss progress and optimization, with metrics available on request
- Experienced: built on a deep knowledge of the IT industry, languages, and lead nurturing techniques
- Underpinned by: robust infrastructure, quick integration with leading clients, and high-caliber business development teams based in Dublin, Ireland
Want to fill your sales pipeline with qualified leads that match your ideal buyer? See how Foundry SDS can help.
What’s next? The Sales Development Landscape Survey 2023