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Sales Outsourcing: The Key to Start-Up Success in the SaaS Sphere?

Would you consider outsourcing the sales function of your organization? If so, what would prompt such a decision? Do service providers for this exist? Based on the principle of core competence, Contract Sales Organizations (CSOs) shoulder the responsibility of managing your sales process, helping you achieve your sales objectives while you focus on your core strengths.

Consider the case of a start-up company in the software application space intending to sell its product on a SaaS model. One of the key determinants of success for such a company is its ability to sell effectively and efficiently. Should a start-up consider outsourcing the sales process?

Delving deep into what constitutes a sales process, three key elements — Resourcing, Distribution, and Execution — help decide what to outsource and what should be managed in-house. 'Resourcing' pertains to hiring the right sales personnel, managing their payroll, attrition management, and career development. 'Distribution' concerns the distribution model, its length, distribution hierarchy, and reward structure. 'Execution' is the deployment of resources for the task of distribution and sales management. No matter how good or effective the distribution channel is, a sustained relationship with members of the distribution channel, including customers, is crucial.

Typically, companies, especially in India, are seen outsourcing only 'Resourcing' to Professional Employer Organizations (PEOs) or staffing companies. While hiring, payroll, and statutory compliance are the PEOs’ responsibility, the internal sales team takes on the task of driving the outsourced resources to pre-defined sales objectives. PEOs end up charging for such services anywhere between 5-8% of the total salary cost.

One of the key motivations to outsource 'Resourcing' to PEOs is cost optimization without losing control over the quality of personnel and their productivity. Hence, outsourced resources operate as extended arms of the internal sales team. Companies in India are known to outsource their IT functions, logistics to an extent, payroll management, customer service, marketing, and PR activities.

However, I have yet to come across a case of 100% outsourcing of the complete sales process. What would prevent companies from considering such outsourcing? Do we have vertical specialist CSOs to whom a core function like sales can be outsourced?

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