There’s a question that’s been around for decades, and it sometimes plays a key role in the overall success of a company. So, what is it? Of course, it’s the outsourcing vs in-house debate.
Each company that looks at this will most likely see it in a different light. What may work well for one business doesn’t necessarily mean it will work well for another, even if they’re in the same industry.
However, with that being said, when we look at if certain functions are best to be outsourced or kept internal, there’s a better option for different situations. One great example of this is looking at SDRs (sales development representatives).
What Are SDRs Used For?
Sales development representatives are extremely important and help a business achieve different sales objectives. For example, they focus on outbound prospecting and scheduling meetings with potential clients. Once a meeting is scheduled, an account executive then tries to secure new business for the company.
Companies that don’t have an SDR team are at a clear disadvantage. They won’t be able to bring in warm leads, therefore, without hardly any new customers, the company won’t grow. Plus, over time, existing customers will likely fade, leading to the company going bust. No business would ever want this to happen, so it’s no surprise that SDRs are in high demand by companies around the world.
Some organizations give the tasks that are commonly completed by SDR teams to sales representatives instead. This means they have way more responsibilities. They have to look for new leads and talk to existing ones to convert them into customers. This approach is often viewed as inefficient due to the main skills of the sales team being put to waste.
Pros and Cons of an In-House SDR team
An in-house team allows the business to have more control. Management can keep a watchful eye on how the team is operating and provide insight on how they can improve.
However, by using this method, there are associated costs that are considerably more than outsourcing. For instance, the purchase of the right equipment needed to fulfill responsibilities, such as computers, different software, and more.
If we focus on the prices of the software the company will most likely need to purchase without even factoring in all the other costs, expenses start to add up. Below contain the annual costs of popular programs used for outbound prospecting:
- LinkedIn Sales Navigator – $1,100 per user
- Salesforce – up to $3,500 per individual
- HubSpot – $14,000 for 10 users
- InfusionSoft – $3,500+ (10k contacts)
But it doesn’t stop there. If the team will be working in an office, additional supplies must be bought. This includes chairs, desks, general office supplies (paper and pens), and others.
Hiring more employees also comes with the possibility that benefits will be offered, which again can increase the overall cost of using an SDR team.
Furthermore, the in-house SDR team must be hired and then trained. This is no easy process as SDRs play such a crucial role for the company. Not only does the team need to be highly skilled in what they do, but they must also fit the company’s culture.
All of this can be achieved, however, it will take a lot of time and can be challenging. Did you know that it takes almost 9 months for a company to complete the hiring process to acquire a new SDR? This timeline includes when a business starts to think about hiring, all the way up to when the new hire will provide value. As a result, business growth may be slowed until everything is up and running.
In addition, if any of the SDR team decides to quit and the hiring process takes too long to find a suitable replacement before they do so, the success of the company can be impacted. Other companies that rely on an internal SDR team will also be on the lookout for talented SDRs, which means it can be difficult to find ideal replacements that don’t break the bank (or even SDRs in the first place when creating the team).
Keep in mind that there will be various costs while this is all being figured out and may distract those in charge of hiring SDRs from carrying out other core processes that are vital to keeping the business ticking.
Pros and Cons of an outsourced SDR team
Outsourcing is seen as the more favorable option in some aspects. Yes, there is less control over the operation, but this isn’t necessarily a bad thing. Outsourcing companies have perfected their processes to offer great returns.
There’s also the bonus that costs will be significantly less. As mentioned when we looked at an in-house SDR team, different expenses will come along with them. All of these aren’t present when outsourcing. Therefore, the funds saved by outsourcing SDRs can be used in other sections of the business, such as improving the service or product that’s being offered.
An outsourced SDR team is usually way more efficient at what they are designed to do. This depends on how well the company provides information to the outsourced team, but as long this process runs smoothly, the number of leads that roll in should be high. After that, all that is left is to set up some appointments to turn the leads into paying customers.
Because outsourcing SDRs can be achieved rapidly, there is also the option to use them to start with and change to an in-house team down the line when there is a confidence it can be done properly. This way, the process doesn’t have to be rushed, and the business can still function efficiently with a team that is dedicated to finding new customers.
Comparing both options
As we’ve pointed out, there are advantages and disadvantages to both options. So, what to choose? If you’re looking to get things up and running quickly, using an SDR team that is outsourced is the ideal option.
However, if you want more control over the process, including who is hired and how they’re trained, then in-house would be more suitable. Just remember, this can take quite a while, and there are likely going to be some hiccups along the way until everything runs as intended.
A well-oiled SDR team is vital to a company that wants to perform well and grow. There are points we’ve discussed that show both options have their merits. The ultimate decision will depend on what stage the business is at, the resources available to them, and how they like to run business functions.
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