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Sales outsourcing is a strategy used by businesses that involves hiring a third-party company to take care of its sales needs. Benefits of sales outsourcing usually include lower costs, improved company focus and added expertise. Sales outsourcing also has disadvantages, however, such as a loss of control over the motivation and training of the sales team, the loss of potential sales and the possibility of overlooking hidden sales opportunities. Sales outsourcing generally is most beneficial to businesses that are in the startup phase, testing a new product or entering a new market.
The purpose of sales outsourcing generally is to reduce costs, improve company focus and share risks. It often reduces a business's costs because the business no longer has to worry about recruitment, benefits and training for a sales team. If a company is being pulled into too many directions or sales is outside of its core competencies, then sales outsourcing allows it to focus on what it is good at while the third-party professionals take care of the sales. It also allows a business to take advantage of experienced sales professionals when it is unable to afford hiring a full-time staff.
Disadvantages of sales outsourcing include reduced control over the sales department, a risk of losing potential sales and the possibility of missing out on hidden opportunities. Training and incentives are powerful motivators that can drive a sales team to its full potential, enabling them to convert more leads into sales. When a company hands over this power to another business, it risks having a sales team that is not properly trained to handle its types of customers or a team that isn't properly motivated to take extra initiatives. This can create a loss of potential sales and result in the business missing out on opportunities that a motivated sales force may see. For instance, if a customer complains to a sales employee about features lacking on a product, the employee normally would notify someone within the company that updating the features might increase sales, whereas a third-party contractor might not be motivated to do so.
Startups and businesses that are testing new products or moving to enter new markets may find sales outsourcing to be more beneficial than hiring a sales team. With this strategy, businesses initially don't have to spend as much money or use as many resources. If the startup, new product or market entrance is not successful, the business likely will have saved money by outsourcing. In the long term, however, after achieving success in its activities, it usually is best for the business to have its own team in-house in order to have more control over training and performance.