Should You Build An In-House Sales Development Team Or Outsource To An Agency?

Posted by LinkedSelling in B2B Lead Generation & Sales Insights

Every business with a sales team wants them to function at their best.

That means letting them focus solely on what they’re best at and removing unnecessary tasks from their plate so they can focus on closing. 

That also means that you need to fill their pipeline with quality leads, creating quality and consistent opportunities for them to close new clients.

How can you achieve that? There are several factors involved. For example, you need to consider and research your client profile, test and optimize your messaging, expand and compile your database of contacts, develop an outbound strategy, and finally, analyze your conversion rate and look for places to optimize. 

To make this possible, unless you want your sales team bogged down with these kinds of tasks, you’ll need to hire people to implement and manage the process. 

You have two choices, you can create an internal sales development team, or outsource it to an outbound sales development partner.

Let’s cover a few factors and compare the costs and benefits of each before you make that decision

The first factor is cost. So before you decide on what you should expect to spend on a world class Sales Development Program for your business or department you must first understand what you can afford to spend.

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What Can You Afford to Spend On A Sales
Development Team? Let’s do the math.


Conservatively, let’s say that your average client is worth $40K in Lifetime Value (LTV)
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And you or your sales staff typically close 10% of the meetings or sales appointments you have.
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So if you got 10 sales appointments, realistically, you would close 1 new client.
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Meaning, to get 2x ROI you would be able to spend $2,000 per lead.


Should you pay that? Probably not. If done properly your sales development program should be able to schedule sales appointments for significantly less than that. 

But understanding what you can AFFORD to pay and still be successful is important for your next decision. 

Next…

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Should you build out an in-house team for your sales development or outsource to an agency?

There are many factors to consider here but let’s start with the top three:

  1. Cost of hiring out your team
  2. Cost & time spent managing that team
  3. Outbound Strategy and Optimization

Investment Needed For Building Your Sales Development Team

What financial investment is it going to take to build out an internal sales development and outbound lead generation program?

Let’s start with the Sales Development Representatives (SDR), your troops on the frontline making first contact with your prospects. 

According to Glassdoor, the average salary for a SINGLE SDR is $52,989. However, once you factor in bonuses, commission structures, benefits, software licenses, training costs, and more, that number is more accurately in the $80K-$90K range in terms of actual cost from the employer.  

Now, that’s the cost of a single SDR. The average ratio of SDR to Sales Rep is 1 SDR for every 2.6 Sales Representatives. Before we go on, it’s worth noting that businesses doing more than $6M a year average 1 SDR for every 2 Sales Representatives. Source 

So at the very minimum, if you had a sales staff of 3-4 sales reps you would need to bring on 2 SDRs. Meaning you’d be investing ~$160k every year on SDR talent alone. 

Here’s the thing though, while a rock solid SDR is an integral piece of your Sales Development Team, it’s really only a single piece of a much larger puzzle. 

Even if you hit the jackpot and find a smart, hardworking, superstar who can manage every step of the process (unlikely) and understand outbound lead generation strategy 
(even more unlikely) you still only have one SDR.

A complete Sales Development Team will have:

Sales Development Representatives:

Function: Call cold and warm prospects to build trust, qualify prospects, and set sales appointments for your team of Sales Reps. 

Salary Alone (Glassdoor): $52,989 Avg


Digital Marketing Specialist:

Function: Utilizes online channels, i.e. LinkedIn & email outreach, to build relationships on behalf of your Sales Reps with new or existing prospects to set qualified sales appointments. This role will need to have an intimate knowledge of email marketing and social selling. 

Salary Alone (Glassdoor): $60,962 Avg


Copywriter:

Function: A copywriter will serve as the primary communicator between your business and your prospects. They will optimize messaging and support marketing in creating email campaigns, landing pages, content and more. A good copywriter will know how to use psychology and how to hook your prospects, garner attention, and sell your products and services via print.

Salary Alone (Glassdoor): $62,593 avg


Data Analyst:

Function: Depending on your current marketing or sales structure the data analyst will likely perform two core functions, list procurement and ongoing optimization. Meaning this position will analyze data from 3rd party data subscription platforms like ZoomInfo, Clearbit, GetProspect, etc., then divvy up between Marketing Specialists and SDRs. They will also be in charge of ongoing optimization of campaigns based on your company KPIs. 

Salary Alone (Glassdoor): $69, 291 avg.


Traffic Manager or Digital Advertising Specialist:

Function: One of the elements that we add to our standard outbound lead generation and sales development campaigns (social, email, phone) is paid advertising on LinkedIn, Facebook, or Display Network. This role is responsible for making sure that every prospect in the campaign is also seeing ads while they are simultaneously getting messages on social, personal emails, and calls from your SDR.

Salary Alone (Glassdoor): $83,300


Now let’s compare these costs to outsourcing each of these roles. When you hire an outsourced lead generation and sales development agency you get a team of experts in every single area listed above without the high price tag. In many instances it can be 5-8x more cost efficient to outsource this work AND you’ll get a team of experts handling the work on your behalf.

Want to know your options?

Set-up a time to speak with one of our Client Strategists to learn what's best for you.

Management & On-boarding of an In-House Sales Development Team

There is an often overlooked factor when considering an in-house team. You need to consider that once you have your team in place, who is going to manage and train that team?

For smaller businesses it may be the owner or the Sales Reps themselves.  For medium or enterprise level businesses it will most likely be the Director of Sales, the CMO, the Marketing Director, etc.

According to Glassdoor, the average cost for a CMO is $175,176, but that can range up to $300,000+ in some cases.

The problem? Chances are they are not hurting for things to do as it is. Can you trust that they can properly and attentively manage a single SDR let alone a full Sales Development Team?

Possible. Yes. But is it the best use of their time? And do they even know enough about outbound marketing and sales development to make this a successful initiative without taking years of trial and error?

What’s The Bottom Line To Get Started?

Let’s take a look at the cost so far for a complete in-house sales development team. Between the cost of each team member (with a few SDR’s) and the costs of whomever you’ll have manage the team, you’re looking at a minimum of $600K.

Position

Avg. Annual Salary

Sales Development Representatives

$52,989 (x3)

Digital Marketing Specialist

$60,962

Copywriter

$62,593

Data Analyist

$83,300

Traffic Manager or Digital Advertising Specialist

$83,300

CMO/Director of Business Development

$175,176


Total cost for your Sales Development Team = $610,289

(a.k.a. not cheap)


You might try and find the one perfect Rep who can wear each of those hats, but it’s a hard role to fill.

As we referenced above ‘Clearly Defined Roles & Responsibilities Lead To A More Productive (and Happier) Sales Force’ and ultimately, more results.

How to Develop the Right Outbound Strategy for Your Company

Having a team of specialists handle your sales development ensures that you not only go to market significantly quicker but you also don’t have to worry about burning budget and prospect relationships on trial and error. 

A lot goes into a well-oiled sales development program that an already experienced outbound sales development team has already tried and tested...

What tech to use for your messaging?

What dialer to use for your phone calls?


What service to use for acquiring leads lists or data?


How to efficiently build trust with targeted accounts on LinkedIn without turning your best prospects off?


What messaging is currently resonating with your target market and ideal prospects?

That’s just the start of it. 

This is where the true value of an experienced lead generation and sales development agency is on full display.

By outsourcing to an agency like LinkedSelling you can get an entire, trained & tested, Sales Development Team for less than the cost of a single SDR, without the headache of hiring, training, attrition, trial & error, technology costs, and everything else that comes with hiring and managing an internal team.

If you want to talk over your options click here to schedule a time to chat with our Director of Client Strategy to see how we can help you hit your lead generation and sales goals.

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Let's talk about getting you on the phone with better prospects.

If you're interested in learning more about how we can solve your lead generation problems, book a 1-on-1 planning session with our Director of Client Strategy to discuss your business, your sales process, and whether or not our LinkedIn Marketing Campaign Management Services would be a good fit for your needs.