Can Outsourced B2B Telemarketing Help?

Can Outsourced B2B Telemarketing help your organization hit its inside sales goal?

If you’ve ever considered outsourcing your B2B Telemarketing, you are not alone.  Many large and small organizations utilize outsourced telemarketing as part of their overall program to achieve their inside sales goals.  Outsourcing varies by industry; with software, banking, financial services, insurance, healthcare, utilities, entertainment, media, and publishing industries using outsourced B2B telemarketing at the highest rates.

It’s clearly working for those who already use it; approximately 89% of businesses currently outsourcing their sales will continue to do so, which isn’t a surprising figure when you consider the fact that outsourced B2B telemarketing generates about $18.4B annually. It’s also a convenient option; with a labor pool of 5.2 M workers across the nation, businesses wishing to outsource their sales have a lot of flexibility when it comes to the size and location of their outsourced sales team.

Businesses also have flexibility when it comes to the outsourcing strategy that they wish to employ. Here, we break down the three most popular strategies available to businesses seeking to outsource their B2B telemarketing, and we’ll also take a look at the costs associated with outsourced telemarketing, versus the cost of maintaining an inside sales team.

Partial Outsourcing

This strategy utilizes an outsourced sales team in addition to a business’s internal sales staff. This method is popular for disaster recovery, but has many other benefits, including cost savings and an increase in sales competition. Another advantage of partial outsourcing is that low value accounts can be given to the outsourced team, which can improve the inside team’s morale and create a happier, more productive sales staff.
Partial outsourcing can potentially create frustration from others in the company, which is why it’s important to explain the benefits of outsourced B2B telemarketing to the inside sales team before implementing any strategy. A full-time manager or liaison is needed to manage the outsourcer, and system access and integration may also be necessary to ensure the best performance.

Full Outsourcing

This strategy is best for businesses seeking the best technology and newest practices, so long as they don’t mind not having full control of their sales. Full outsourcing saves costs while allowing businesses to focus on other priorities, but it isn’t without risk; problems may occur if the outsourced vendor goes out of business, or if there is a vision or strategy misalignment between the business and the outsourced sales team. That’s why communication between the business and the outsourcer is essential, regardless of which strategy is used when a business chooses to outsource their B2B telemarketing.

Tactical Project Outsourcing

Typically used during a busy season, this strategy is utilized when additional sales staff is needed for a short period of time. A plan is generated to use the outsourced sales team in the most effective way possible.  Often times, this strategy is used on a short-term basis to help an organization build its pipeline of leads or to qualify leads generated from a trade show.   Not unlike partial outsourcing, a tactical project can also be used to help improve the inside team’s morale, since low-value accounts can be given to the outsourced team.

All three strategies can be paid for on an hourly basis, either with or without bonuses (for hitting goals, either quarterly or annually). You can also pay-per-performance, either residually, or up-front. When speaking to a vendor about outsourcing your B2B telemarketing, it is important to ask questions like;

  • Where are the employees located?  Are they dedicated?
  • What systems are utilized?  What kind of technology is available?
  • What kinds of reports will I receive, and with what frequency?
  • Who is responsible for results?  Can I have access to the resumes of key management?

There are a number of potential pitfalls which are inherent with utilizing an outsourced telemarketing partner as part of your inside sales strategy.  The most common pitfall is caused by a lack of communication to others in the organization about the benefits – and the expected challenges – of outsourced telemarketing. To help set expectations and give the outsourcer a test drive, a concept test is recommended before implementing any strategy. It is important to establish a process to track performance on the back end, and you’ll also want to monitor calls. If any problems arise, it is in everyone’s best interest to resolve them immediately, which is why establishing a feedback system is essential.

Issues tend to arise when initial problems aren’t addressed immediately, or when initial goals aren’t set realistically. Another common pitfall in outsourced B2B telemarketing is lack of I.T. resources and support, or lack of management support and buy-in.

Given all of the balance of risks vs benefits, is outsourcing your business’s B2B telemarketing worth it? The answer is, “it depends.”  One of the most common reasons for cited by inside sales managers for utilizing an outsourced telemarketing organization is cost savings.  Let’s take a look at a few sample math scenarios, comparing the hourly cost of adding to a company’s inside sales team and the cost of hiring an outsourced vendor.

Let’s say you’re paying $80K yearly for an inside sales rep’s salary, $20K for benefits. Each rep’s office expense is $600, telephone expense is $100, and $2K for computer, CRM, and technology, along with I.T. support. Most inside sales organizations have an overhead of one manager for every 10 sales representatives; adding up to a management overhead expense allocation of about $15K per sales rep.  Plus an allocation of $3,750 in management benefits, adds up to a total of $122,350 per inside sales rep – or $58.82 per hour.

How much would you be paying for outsourced B2B telemarketing? The typical professional B2B telemarketing vendor will charge approximately $72,800 (per full time equivalent), and since you don’t have to worry about paying them benefits, paying for an office, telephones, I.T., or management, the cost comes down to only $35 hourly.  And you don’t need to pay for vacation hours, sick hours, holiday hours, or company meeting hours.  /p>

What if your expenses grow? Say you’re paying upwards of $100K a year for and inside sales rep’s salary, with $25K worth of benefits. Office, telephone, I.T., and management-related expenses stay the same, but now, you’re paying a total of $147,350, or $70.84 hourly. The outsourced vendor still only costs you $72,800, or $35 per hour. Increase your costs to $120K, with benefits costing you approximately $30K, and keep all of the other numbers the same; you’re now paying a total of $172,350, or $82.86 per hour, while outsourced B2B telemarketing still only costs you $72,800, or $35 an hour.

When making any decision for your business, it is important to be realistic. Will outsourcing your B2B telemarketing give you a return on investment? How much incremental revenue will it generate? And how productive will it be? Outsourced telemarketing is an efficient and flexible option for businesses looking to cut costs and hit their sales budget, but as with any business decision, it is important to examine the pros and cons before deciding to outsource your company’s B2B telemarketing.

Call today to learn how QCS can help your organization hit its inside sales goals – 866.963.2889.