A Case for Contract Sales Outsourcing Companies
Will you consider outsourcing sales function of your organization? If yes, what will prompt you for such a decision? Do such service providers exist? Premised on the principle of core competence, contract sales organizations (CSOs) take on the onus of managing your sales process and help you achieve your sales objectives while you may focus on your core strengths.
Consider the case of a start-up company in software application space intending to sell its product on SAS 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?
Digging deep into what constitutes a sales process, three key elements- Resourcing, Distribution and Execution, help decide what to outsource and what is to be managed within.
‘Resourcing’ pertains to hiring right sales personnel, their payroll management, attrition management and career development. ‘Distribution’ details distribution model, its length, distribution hierarchy and reward structure. ‘Execution’ is deployment of resources to task of distribution and sales management. No matter how good or effective is the distribution channel, a sustained relationship with members of distribution channel including customers is critical.
Usually companies are seen (atleast a majority of them in India) outsourcing only ‘Resourcing’ to Professional Employer Organizations (PEOs) or staffing companies. While hiring, payroll and statutory compliance is PEOs’ responsibility, internal sales team take on the onus 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 on 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 its IT functions, logistics to an extent, payroll management, customer service, marketing and PR activities. A 100% outsourcing of the complete sales process is what I still need to come across. What would stop companies to do consider outsourcing? Do we have vertical specialist CSOs to whom a core function like sales can be outsourced to?