Outsourcing Inside Sales

In a B2B technology sales context, the ISR (inside sales representative) is a highly specialized role tasked with sourcing prospects and converting them into sales appointments for outside sales. ISRs are not telesales or telemarketing people. That is, ISRs do not actually sell anything over the phone or online. There is no transaction or order processing. The ISR function is a critical one for startups but it is often a disappointment. In this post, I will discuss the reasons why this function is sub-optimal for most startups.

Let’s Get Some Cheap Labor

Traditionally, an ISR role represented a springboard to outside sales job opportunities. It was relatively easy to find aspiring sales superstars and put them into this entry-level job, including new college recruits, people changing careers or industries, and perhaps even a company executive’s next door neighbor’s son or daughter. The thought process is almost always one of “high potential, low risk.” Churn and burn. Let’s find a bright-eyed kid and teach ‘em the ropes. Unfortunately, It rarely ever works.

I have to pause here and point out some flawed logic. The idea is to hire someone into a role that serves as a stepping stone for an outside sales job. Yet, the candidate has no domain knowledge, much less (gasp) any high-touch, complex direct enterprise sales experience? And, the rationale used was that this new hire was cheap? You can see the problem here. Well, It gets worse.

If the ISR job is indeed a stepping stone, a superstar ISR will get promoted to an outside sales role before long. So, now, the high performer is moved into outside sales. You will need to backfill that position with another unproven new hire. Meanwhile, ISRs that do not perform to expectations either quit (since they cannot make enough variable pay) or get fired. Repeat this over two or three sales cycles and you can see where it leads. Your VP of Sales ends up spending an inordinate amount of time on hunting for backfills, ramping new hires, and training the so-called low risk cheap labor.

Let’s Outsource It

A common response to in-house ISRs not performing is to attempt to outsource the function. Many startups have gone down this road. Most will admit that it failed. There are three main reasons why outsourcing inside sales does not work well. First, the business model of the agencies or companies that provide the service are not suited to B2B prospecting. The easier money is with B2C telemarketing or telesales. For B2B direct sales clients, these agencies do not focus on content marketing, lead nurturing, prospect segmentation, and implementing the “inbound-to-outbound” process required in B2B demand generation.

Instead, they are “dial for dollars” shops that are paid for activity - not end results. They have their own heavy operational costs so you are, in effect, paying their overhead. Said differently, you are actually subsidizing the ‘scorch the earth’ telesales for clients that sell dog food or satellite television subscriptions.

The second problem is the scope of work and the contract terms. These firms promise to make a set number of calls and blast a certain number of emails. In return, you pay them an hourly rate. The hourly rate seems economical but if you layer on the amount of time and energy your staff needs to pour into the project, it does not feel like much of a bargain. Six months go by and, now, it feels more like a bank heist because all you have to show for the effort is a bunch of numbers on Powerpoint slides and activity reports that provide no value. You cannot walk into your next Board meeting and boast about MQLs, SALs, SQLs, and calldown metrics. No one will give a sh*t.

The third major problem is related to the first one. In the consumer space, leads can be obtained and converted in a single step. The notion of reach and touch is everything. Responsiveness becomes a valid signal of interest and intent. In high touch B2B enterprise purchase cycles, leads have to be DEVELOPED, not simply acquired. This is why techniques such as re-targeting campaigns are not effective in B2B enterprise marketing in comparison to B2C or B2B e-commerce. Outsourced lead generation agencies are neither equipped nor incentivized to develop leads.

Let’s Combine Inside and Outside

In some cases, startups will just leave the ISR function unfilled or fold it into the outside sales rep’s duties. The plan is to have the outside sales rep do the prospecting, deal closing, and account management. The rationale is that “our sales people need to know how to master all of the steps required to take a cold lead all the way to deal closure and retention.” Let me state the obvious pitfalls of going down this path.

Sales reps have a finite amount of time and energy. He is either spending it prospecting for new opportunities or trying to advance an opportunity already in the pipeline. Guess what happens to opportunities in the pipeline that do not close? They do not re-enter the funnel and repeat the journey into the pipeline. Rather, they are simply ignored or forgotten. With each passing quarter, the pipeline dries up. This is followed by a mad scramble to fill or stuff the pipeline. The quality of opportunities start dropping as the pipeline is now prematurely losing tollgates and things are consequently advancing too fast to the next stage. This vicious cycle continues until you lose confidence in the pipeline altogether.

A New Approach

As my partner and I went to work constructing a Go-To-Market practice at 85 Advisors, we considered all of these issues and pitfalls. We wanted to ensure that our solution was truly differentiated and effective. With the benefit of 20 years of hindsight as corporate marketing head and having hired countless outside firms, agencies, and consultants, we have learned what works and what doesn’t.

In the past, I would either get some good advice or learn best practices but not have the resources to actually implement them. This frustrated me immensely. Meanwhile, consultants and agencies that have mastered the art of relaying the cookie-cutter ideas and concepts to you in a compelling way are a dime a dozen. Unfortunately, they lack the ability to execute against their own brown bag idea. It finally dawned on me that my team could simply Google the high-level concepts that they needed to learn or discover. What I really needed from an external partner was the know how to actually put the ideas into practice. Unfortunately, most consultants and agencies measure their progress on deliverables and task completion while ignoring results. This conflicted with my own realities and that of my CEO and VP of Sales.

At 85 Advisors, we get involved in every step of a client’s Go-To-Market (GTM) process - from co-creating the marketing plan with the client all the way through to delivering highly qualified sales appointments. Given this level of engagement, Customer can (and we expect them to) hold us accountable to end results that are easy to define and measure.  Our turnkey GTM services involve three stages of engagement: (1) Strategy, (2) Infrastructure, and (3) Demand Generation.

In the Strategy stage, we collaborate closely with our clients to formulate the product strategy and produce all of the necessary GTM materials and research to inform that undertaking. In the Infrastructure stage, we perform all activities related to downstream execution including source content development, sales deck creation, writing outbound campaign copy, and installing/configuring an operational MAM/CRM system from framework to running tool. Finally, in the  Demand stage, we unburden clients by handling the actual inbound lead acquisition and the outbound touches with prospects to convert them into qualified sales appointments.

To learn more about our GTM offerings, contact me at john@85advisors.co.