Why blending in-house and outsourced sales development works
By: Aya Gharbawi | 12/20/2021
Sales development and lead nurturing is the fuel that drives your organization towards high conversion. But, as we all know, it is getting more difficult, especially for technology organizations.
Why has sales development become more complex? Because the competition is growing at breakneck speed, buyers have more options than ever before. With every technology organization working hard to convert leads, your organization needs to ensure ideal buyers are educated about your solutions, and the reasons why you are the right fit for solving their business challenges.
According to research, 80% of new leads never translate into sales. How do you ensure more leads are likely to convert? Lead nurturing. But it requires a lot of time, effort, and resources.
Therefore, more and more organizations are outsourcing lead nurturing and sales development to a dedicated team, while leaving their in-house teams to focus on lead generation and closing high-quality leads.
However, not all companies have the resources or top-level buy-in to implement a lead nurturing strategy that is run by a fully-staffed sales development team. If you have asked yourself the question: ‘Should my organization adopt in-house sales development or outsourced sales development?’ you are in the right place.
According to our recent survey of 404 technology organizations, 53% engage in a mix of in-house and outsourced sales development. The reasons:
- Outsourced sales development is easy to set up and can be onboarded quickly
- You gain the experience of a dedicated sales development team in a single package
- Outsourced teams are remote, so you don’t have to worry about office space
- You don’t have to concern yourself with recruitment and training
This blog discusses the value of nurturing leads, outsourcing sales development, and also the value of taking a blended approach to outsourcing and in-house sales development.
The value of lead nurturing and sales development
New leads can be generated from existing customers or net-new prospects, giving you a valuable starting point in terms of those willing to engage, but new leads often fail to translate into sales.
Sending fresh leads straight to the sales team, without qualifying prospects to find out if they are your ideal buyer, is an exercise in wasting the time of your sales department. You need to put in the legwork to help improve the chance of a sale.
Sales development bridges the gap between marketing, who generates leads, and sales who close. Through research, phone calls, emails, and personalized engagement, sales development aims to take Marketing Qualified Leads (MQLs) and determine if they are ready for a sales call. This key function aids both teams, by ensuring marketing leads are nurtured and acted upon rapidly, while also ensuring sales receive Sales Accepted Leads (SALs) that are more likely to buy.
If you want to ensure that your sales teams are booking calls with decision-makers that are ready for your organization’s solutions, you need a sales development team.
What do our survey respondents say about the importance of sales development in the technology industry?
Technology organizations seek revenue growth in two ways: by chasing new leads and by bolstering their foothold with their existing customer base:
- 46% of respondents focus their sales development resources on winning new business
- 42% focus on allocating sales development resources to expand their reach within their existing customer base
On a similar note, 30% of respondents say that obtaining an SAL or Sales Qualified Lead (SQL) is their primary goal.
And the most effective way of achieving this is by building relationships with your leads at every stage of the funnel, by listening and responding to their challenges and pain points. The goal of lead nurturing and a sales development representative (SDR) is to qualify and identify leads against several criteria, such as:
- If the leads are long term or short-term
- If they are budget holders and decision-makers
- If these challenges align with the solutions your organization offers.
Not only does sales development help you keep good leads and stop leads from ending up in a different solution provider’s funnel, but it also holds a bright shining light for the sales team to follow, instead of having them search for good leads in a haystack of MQLs.
Sales development is valuable for the lead as well. Lead nurturing guides leads towards finding a solution to their business challenges, and only a sales development team can offer the type of personalized engagement to help prospects on their journey.
However, the challenge for technology companies is how to execute a lead nurturing strategy with a business development team. The options are in-house, outsourcing, or a mix of both. We will explore each area below.
Why do companies focus on lead nurturing in-house?
Your sales team is in-house, and so is your marketing team, so why not have an in-house lead nurturing and sales development team?
In-house lead nurturing is perceived as the least expensive option when compared to outsourced lead nurturing. This perception is especially prevalent in smaller organizations with tighter budgets and limited resources. This is often because of the idea that sales development duties can be taken on by the sales team. However, sales development and lead nurturing is a lot more involved than giving a quick call to an MQL and expecting prospects to become an SAL.
Many enterprises have dedicated in-house teams with the appropriate resources and budget. The larger the organization, the sales conversion tasks become increasingly difficult. Some reasons this may be is because the sales team may not have the bandwidth/desire to properly focus on this element of the job and using a highly qualified and usually expensive sales resources. The net effect is high cost and low productivity.
In reality, sales team members cannot consistently or efficiently nurture leads if they are focused on closing sales. It is a question of: How can I use my resources to their full potential?
Here are common reasons small organizations take lead nurturing and sales development in-house.
Reason 1: The belief that MQLs are educated about your company’s offerings and require little nurturing
Some technology organizations assume a lead is primed for a sale as soon as it arrives in your funnel from lead generation efforts. However, MQLs have limited understanding of your organization and its solutions. Just because a lead is engaged with content, or filled out a form on your website, does not mean they are thinking about buying your solution. They are only signaling interest. The job of an SDR is to qualify and nurture leads over a period of time to qualify the contact, their fit with your product or service, and the urgency of their need, handing over only the leads that are ready to talk to the sales team.
And the more MQLs you have, the more resources that need to be allocated to nurture prospects before a sales call can be performed.
Reason 2: The belief that in-house lead nurturing can be performed by the sales team
Simply put, lead nurturing and sales are different roles that require unique skill sets. You wouldn’t delegate salespeople to marketing, so why ask sales to engage in lead nurturing?
By delegating sales to lead nurturing, you are not only taking them away from their primary function of closing deals, but you are also limiting your organization in its ability to nurture leads quickly and efficiently. The lead nurturing process requires time, skills, and technology that only a dedicated sales development team can facilitate.
SDRs are not just responsible for qualifying inbound and outbound leads at the top of the funnel. They also research leads, educate leads with personalized engagement (phone and email) before putting prospects in front of a sales representative. This is a long and delicate process that will overburden sales team members if they are also doing their primary sales tasks.
Reason 3: The belief that in-house lead nurturing and sales development requires limited resources to function
Some technology organizations do not view sales development as a critical function of the sales conversion process, nor as a specialized area that needs dedicated resources and full integration into the business.
In-house sales development often falls into the trap of being tertiary when compared to marketing and sales. However, it is just as important. Without strong sales development backing, your organization will be left with a funnel full of leads that are unlikely to buy, as they have yet to form a relationship with your organization.
Research findings: Challenges when taking sales development in-house
While building an in-house sales development team can have benefits, such as long-term employee grooming, developing within your organization’s culture, and personalized in-house training – many organizations face challenges with in-house sales development.
We have recently conducted a study and these are the most common in-house roadblocks we found.
- 53% find that managing costs effectively can be difficult.
- 57% believe the requirements of the team change too quickly to keep up with (needs of company and market continue to change)
- 47% find it difficult to hire and keep talented people.
- 43% said they do not have the management time to run the team effectively
- 42% said they do not have the necessary flexibility of resources and expertise
- 42% said they do not have a sales development strategy
- 41% said they do not have enough people
- 40% said they do not have the right technology to support the team
- 39% said they do not have the management expertise to run the team effectively
These challenges share a common thread; that of expertise, speed, and cost. Simply put, most organizations are specialized in the core function of their business, not sales development.
Adding an entire department of sales development experts to the organization eats up time and resources. As a result, we often see sales development fall to the sales team or an under-resourced sales development team.
Read more: Lead Generation and Lead Nurturing Campaigns: What is the difference?
Moving away from in-house: Outsourcing sales development
Why are technology organizations switching to outsourcing? According to our survey, converting inquiries to SALs was the biggest driver (43%)
To get the most out of sales development and to create new revenue opportunities for your organization, you need a team of focused SDRs that:
- Qualify leads from marketing efforts
- Engage with prospects through calls and emails
- Hand over SALs to the sales team and organize calls
- Develop long-term relationships with leads
- Act as your organization’s thought leaders
- Identify lead challenges and guide prospects to your solutions
- Research and seek new business opportunities
To avoid losing good leads, our survey shows that more companies are looking to outsource their sales development efforts to ensure they extract the most value from lead generation. Here are some illuminating stats on why more companies are outsourcing:
- 49% of respondents believe they can make use of better technology elsewhere
- 48% outsource to scale the sales development team
- 48% do it to manage costs more easily
- 48% want to gain access to particular language skills or an understanding of local culture
- 47% are keen to avoid the cost and time involved in the hiring and training of in-house staff
From the results, it is clear that outsourcing sales development and lead nurturing has several benefits, and it comes down to cost, flexibility, expertise, and technology.
The ability to launch fully resourced sales development initiatives is significantly accelerated through outsourcing, from a matter of weeks instead of months, and potentially years, depending on the scale of the initiative. Through outsourcing, you gain trained individuals, managers, technologies, established best practices, and a wealth of history and sales development process improvement – all of which will take time if set up internally.
Similarly, outsourced sales development teams are flexible and can orient their strategy towards your goals quickly. Whether that entails reaching a new market or approaching leads in a certain way specific to your ideal buyer, more often than not, an outsourced team will have a playbook to meet your goals. After all, they have the experience and can make agile changes without having to spend a great deal of time retraining or hiring new team members – as might be the case with in-house sales development.
Learn more: Tips to nurture marketing qualified leads to sales accepted leads
Blend of both: In-house and outsourced sales development services
In our survey, we found that 53% of technology organizations have a blend of in-house and outsourced sales development, while 31% have in-house sales development and 15% fully outsource it.
Control is important. By fully outsourcing, you take all the weight off your company’s shoulders, but doing a blend of both in-house and outsourcing will allow you to be involved in the lead nurturing process, and focus on closing deals.
Here are some ways technology companies mix in-house and outsourced sales development.
Combining in-house knowledge with outsourced technology
If you have a clear idea of who your ideal buyer is and have a good lead nurturing strategy in place, you might just need the technology to help supercharge your strategy. This is where outsourcing can come in. Technology is expensive, and outsourced sales development teams have access to the latest technologies that help energize your lead nurturing process.
Generating leads and outsourcing lead nurturing
Your in-house marketing team generates the leads, while an outsourced team focuses on nurturing and prepping leads for your sales team. Lead nurturing is resource-intensive, but through outsourcing, you can ensure your sales team focuses on honing their pitch skills and getting more calls in their calendars.
Working with an outsourced sales development team to break into new markets
With the expertise of an outsourced sales development team, you can break into new and uncharted markets to boost your revenue. Jumping into a new market is often daunting, and it can take a substantial amount of time to see results from your sales team. Agility and flexibility are key, and this is where an outsourced team can help. An outsourced team will mean that you don’t diminish your core activities, as the additional work of scouting and making inroads can be taken on by the outsourced team.
In addition, 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 without any language hiccups.
Outsourcing with Foundry Sales Development Services
In our survey, 37% stated they will maintain a high percentage of outsourced sales development, while 48% said the balance between in-house and outsourced will remain the same.
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.
At Foundry SDS, we guide each customer’s journey toward conversion on your behalf, operating as a seamless extension of your in-house business development team. Once we bring your leads to the right level of maturity, we hand them off to your sales team for final conversion.
Our service is:
- 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 for technology firms into 2022