Growing Market
Analysts and service providers say the sales outsourcing market is growing steadily. “Sales Focus began business in 1997, and has seen 20%–50% revenue growth each year,” says Tony Horwath, CEO, Sales Focus. The firm started out by serving the high tech industry and now is seeing especially high demand in the energy, telecommunications, financial services and advertising sectors.
Sales Focus provides whatever level of sales personnel a client needs, including a program executive who acts as the vice president of sales and manages a team of sales agents supplied by Sales Focus; a sales administrator who manages all human resource functions for the sales group; and a financial administrator who handles all expenses and commissions.
At the outset of an outsourcing engagement, Sales Focus assigns a “transition and management team” that assesses a client’s current sales strategy, creates a marketing plan and develops a sales organization. The firm in some cases conducts in-depth interviews with a client’s existing customers, partners and employees to better understand the perceived presence of the client in its market.
Sales Focus also helps clients recruit personnel using its own database or by working with recruiting organizations; creates compensation and commission plans for sales agents; and provides customized training for the sales team.
Another firm, SalesLogic has seen huge growth in demand for its sales outsourcing services. “It’s an exploding market, particularly in Western Europe, where companies are looking to establish a sales presence in the U.S.A.,” says Bob Howard, CEO, SalesLogic.
SalesLogic, which plans to soon change its name to Sales Overdrive, provides everything from complete end-to-end sales and marketing outsourcing to more select services such as strategic consulting, recruitment of sales agents and management and training. Howard says the hottest markets for its services are technology, including software development, professional services such as consulting and outsourcing and logistics and supply-chain management.
Experts say organizations evaluating sales-outsourcing providers should use much of the same criteria they would when analyzing service providers for other types of outsourcing projects. “The service provider must have a viable business plan and be financially healthy, and be capable of scaling up as needed,” says Goldman.
“Since the firm will represent the client to customers, it’s important that agents and managers have a high level of professionalism and a good reputation in the market,” says Trinkle.
An especially important consideration is whether the firm has experience selling products in the client’s industry or one like it. If the service provider lacks knowledge of customer preferences, product-development trends and other factors, that could mean disappointing results for the client. Goldman recommends speaking with existing clients before signing with a sales-outsourcing firm.
The cost of sales-outsourcing services can vary widely, depending on the scope of the arrangement, types of products and services being sold and geographic region. Some service providers offer clients a fixed cost through an agreed-upon rate for an entire project, including recruitment, training, salary and benefits and other aspects of the sales function.
Horwath says Sales Focus charges up-front fees for services such as training, scripting, lead generation, recruitingand fixed fees that cover salaries and commissions, overheads and administration.
