Whitepaper: Sales Outsourcing Options
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Whitepaper: Sales Outsourcing Options

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Competitive pressure within the IT industry has caused companies to drive down costs and optimise performance in every department including sales. Traditionally, small and medium sized technology ...

Competitive pressure within the IT industry has caused companies to drive down costs and optimise performance in every department including sales. Traditionally, small and medium sized technology companies have recruited their own, in house, sales force or used third party distributors, VARS and resellers as routes to market.
In recent years, companies have started turning to a relatively new alternative - sales outsourcing.
Sales outsourcers are specialist organisations which provide a highly focused and efficient sales function. They are often viewed as a bolt-on sales force, existing to generate revenue, increase profit and reduce the overheads associated with the employment cost of the sales function.
Outsourcing is a well established trend with many organisation outsourcing functions such as helpdesk, HR or marketing. However, the sales department is often seen as a key business process that usually ‘owns’ the relationships with the end client, so can this be outsourced?
Organisations considering outsourcing their sales to any degree need to weigh up, understand the risks and how to avoid them. They should calculate the total cost of ownership and return on investment of comparative options, and finally, ensure the outsourcer tailors a sales solution to their detailed business requirements.
This paper discusses the various functions and options of sales outsourcing and provides some links to further reading.

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Whitepaper: Sales Outsourcing Options Whitepaper: Sales Outsourcing Options Document Transcript

  • November 17WHITEPAPER: SALES OUTSOURCINGOPTIONS 2012EXAMINING ALTERNATIVE APPROACHES TO SALESBY JULIAN POULTERSMDI LTDNOVEMBER 2012WWW.SELLINGPEOPLE.BIZ
  • White Paper – Sales Outsourcing AlternativesContentEXECUTIVE SUMMARY ........................................................................................... 3APPLICATIONS OF SALES OUTSOURCING ......................................................... 3TYPICAL BENEFITS PROMISED BY SALES OUTSOURCING .............................. 4SALES OUTSOURCING OPTIONS.......................................................................... 4SALES OUTSOURCING METHODOLOGY ............................................................. 5OUTSOURCING CAPABILITIES .............................................................................. 7FULL SALES OUTSOURCING SOLUTION ........................................................... 11MARGIN CONSIDERATIONS ................................................................................ 12BENEFITS............................................................................................................... 13INVESTMENT ......................................................................................................... 13SUMMARY .............................................................................................................. 14ABOUT SELLING PEOPLE .................................................................................... 14 Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 2 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing AlternativesExecutive SummaryCompetitive pressure and worldwide trading conditionswithin the IT (and other) industries has caused companiesto drive down costs and optimise performance in everydepartment including sales and marketing. Traditionally,small and medium sized technology companies haverecruited their own, in house, sales force or used third party “The outsourceddistributors, VARS and resellers as routes to market. sales function canHowever, companies are now increasingly consideringother sales outsourcing alternatives. be very usefulOutsourcing is a well established trend, with many when enteringorganisations, choosing to outsource functions such as foreign markets, orIT/helpdesk, HR or marketing. However, the sales to target marketsdepartment is often seen as a key business process thatusually ‘owns’ the relationships with the end client, so can outside of the focusthis be outsourced? area of anOrganisations considering outsourcing their sales to any organisation’sdegree need to understand the risks and how to avoidthem. They should calculate the total cost of ownership traditional salesand return on investment of comparative options, and team“finally, ensure the outsourcer tailors a sales and marketingsolution to their detailed business requirements.This paper discusses the various functions, capabilities and options available for salesoutsourcing and provides some links to further reading.Applications of sales outsourcingBefore we discuss the make up and options of sales outsourced projects we highlight someareas where it can be applied:Application DescriptionForeign territory entry Using the local knowledge and capabilities of the outsourcer to obtain a footprint in the new market quickly.Market Evaluation Launching into new markets may be best preceded by some degree of professional market testing. Not simply desk-based research but potentially including customer-facing and assessing sales process.Balancing effort across Outsourcing either the management of a new launch initiativelegacy vs. new product or the sales effort to focus on maintaining revenues from alaunches legacy product base.Boosting existing team Adopting a low risk strategy to expand current sales team, with flexibility to scale to meet demand levels. Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 3 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing AlternativesSmall client focus Outsource the management of small client/prospect targets to an outsourcer.Company launch phase The outsourcer as the commercial bridgehead potentiallysupport working in conjunction with VC funders, banks, accountants, lawyers as well as partners.Partner recruitment and Improve the performance of your partners with targeted bidsupport support, sales support and pipeline reviews, training etcInterim management Hire a part time sales manager or sales director to help in a variety of ways. Consultancy or management engagements.Lead generation Telemarketing and e-marketing lead generationTypical benefits promised by salesoutsourcing Resources canSales outsourcing offers several advantages overtraditional recruitment or distribution models. A sales be scaled up oroutsourcer would probably highlight the following: down at shortResults focus - focussed on activity, pipeline and sales notice inorders. The expectation would probably be thatinvested time is paid for, but the focus is as far as response topracticable on achieving the results agreed. changes inSpeed - rapid set-up in a matter of days or weeks, demand Resources canrather than the months that a typical recruitment or in-house operation could take be increased orFlexibility - resources can be scaled up or down at decreasedshort notice in response to change of market conditions of scaled up orclient needs. down at shortAvailable expertise – Professional approach, utilizingpredominantly existing in-house staff with proven and notice accordingcommon sales processes and systems rather than to campaigns orrecruiting new external staff. results.Cost – relatively low upfront costs; possibly norecruitment costs, offering the benefit of lower initial risks.Facilities – options to base sales staff either on client’s site, in the field or in theoutsourcer’s offices. Ability to use the outsourcer’s address and telecommunicationsfacilities.Intelligence - an outsourcer offering quality market intelligence could accelerate access totarget marketsSales outsourcing optionsThere are several different models of sales outsourcing available and these are discussedbriefly below. Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 4 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing AlternativesInterim or contract resourcesWith this model the outsourcer essentially provides sales resources to the client. This couldbe in its simplest form a part time sales executive, up to a team of sales people across ageography. Resources can be at the sales or management level.Solution basedUsing a combination of the key resource: sales executives, lead generation/telemarketing,sales management, systems, processes. These are combined in a unique solution to theclient and implemented in a professional manner using the outsourcers engagementmethodology.Sales force take overIn this model the outsourcer takes over the complete sales operations of the client in orderto increase revenues but also achieve cost savings though the use of its infrastructure,contacts and intelligence.Sales Outsourcing MethodologyAn overall approach to an outsourcing engagement should typically consist of four mainphases: a. Preparation – Scan & Plan b. Launch, Test & Review c. Initial Operations d. Full or long term operations Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 5 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing AlternativesFigure 1 - Sales outsourcing methodologyThe key phases are discussed in brief here and in more detail in the related whitepaper: AProposed Sales Outsourcing Methodology.PreparationThe initial Preparation phase is concerned withdeveloping a robust sales and marketing plan for thecommissioning organisation. This may just cover ashort initial period but would usually provide an outline The typical 4 phaseof operations over 1-2 years. engagement:The key element of developing the plan is an intensive a:Preparation – Scan &sales and marketing workshop attended by senior Planmanagement of both parties. This looks at all aspects b. Launch, Test &of the sales (and/or marketing) operation. ReviewThis phase is also known as Scan & Plan, where the c. Initial OperationsPlan element consists of some rapid desk basedmarket research complimented by some outbound d. Full or long termtelemarketing resource. This allows the proposition(s) operationsto be quickly tested in the market in front of liveprospects.Input from this early test is used as input to the sales strategy and plan. Usually 5-10 daysof test calling is suggested and on average 10 surveys (discussions with senior decisionmakers) per day. By its nature there are many assumptions made in a sales plan before Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 6 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing Alternativesoperations and these early tests and the Launch phase help determine the real worldscenario.The remaining component of the Preparation phase is to complete the remaining items ofset up that are required to get the engagement going: logistics, training, recruitment etc.LaunchFollowing the Preparation, a longer Launch phase is then undertaken where the emphasisis on getting in front of as many prospects as possible to outline the proposition in detail andbuild pipeline. In the Launch or Test phase the emphasis is on selling and closing deals, butin these early stages, significant review and feedback is maintained to track progressagainst the plan and its assumptions.At the end of the Launch phase the results are reviewed and a decision can be made onprogressing to the next phase and the sales plan can be updated if necessary with the livemetrics.Initial OperationsThe Initial Operations phase is now all about generating sales orders and ramping up thesales operation. If the plan calls for five field sales personnel within one year the Launchphase may only use one full time equivalent (FTE). This resource may in fact be split intotwo for extended coverage, segmentation or comparison purposes. This is part of theflexibility of a sales outsourced solution.Over time the resources will then be increased and can be adjusted as requirementschange over time and as the project evolves.Full OperationsThe Full Operations phase can be an extension of the Initial Operations or the client maywish to set up their own subsidiary or distribution channel and the outsourcing be phasedout or be used to support certain aspects of the sales function. Many clients may alsochoose to take a sales operation in house once an early sales footprint has beenestablished. All options are possible and transparency in the short and long term plans willhelp both parties.Outsourcing CapabilitiesThe diagram below shows graphically the main functions required in an outsourced salesfunction. Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 7 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing AlternativesThe key functions are now discussed in turn – sales executives, sales management andlead generation, processes and systems, facilities and expertise.Sales ExecutivesFront line sales personnel are clearly at the heart of any sales operation. Sales executiveshave traditionally been recruited on a full time employment basis. The upside is quiteapparent but the downsides are often less obvious. For example, there is a high cost andhence risk if full time sales resources fails to give the required return on investment,particularly in the often, overpaid IT sector. The worst acquisition a business can make is anexpensive sales recruit who does not sell anything and leaves after six months, resulting inwasted time, effort investment, salary payment and hefty recruitment fees.Sales contracting and outsourcing is a relatively recent form of ‘recruitment’, particularly inthe IT industry. Sales contractors, often self employed, tend to be more common in otherindustries such as financial services and pharmaceuticals, and manufacturing industriesoften utilise self employed agents.A sales contractor usually offers increased flexibility and lower risk for a number of reasons:  Sales contracting is usually based on a simple, daily rate plus commission and expenses (phone, travel). This compares favourably to a 15-20% of salary recruitment fee, typical in permanent IT sales roles. The total recruitment fee typically equates to around eight weeks of an effectively working contractor.  Whilst some larger organisations need a full time sales resource, in reality, many smaller organisations do not initially need ‘packages’ of five sales days per week. Contract resources are recruited according to need and as there is no formal employee relationship, administrative overheads are much lower. An initial commitment of just two days a week for instance, can significantly reduce upfront costs and risks. Sales outsourcing components:  Flexibility is increased and can be extremely useful. For instance, instead of one full time resource, having two  Sales executives people at 2-3 days per week, where each has different  Management skills, or focuses on different territories or verticals, can be beneficial.  Lead generation  Additional resources can be recruited for peak periods to  Marketing assist with specific campaigns or demand.  Processes &The key point about sales resources, contract or full time, is that systemsthe outsourcing organisation can be responsible for the day to day  Facilitiesmanagement of the resource or choose the outsourced modelwhere the outsourcing organisation provides the recruitment,  Expertisetraining and management.IT sales people are normally paid a package split around 50:50between basic salary and a margin based commission scheme, a cost that needs to be keptin mind with any form of recruitment.The value of the product being sold and the length of the sales cycle have a direct bearingon the type of sales people required:  As a general rule of thumb products with a value of $1000 or less need to be sold with a self service approach – such as the web perhaps in conjunction with reactive telesales or customer services. Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 8 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing Alternatives  Products with a value from $1000 - $3000, depending on the margin available are more suitable for sales by telephone and perhaps the occasional fields sales visit, if required.  Products with a higher sales value can justify or require a field sales approach, though this may not always be required.Sales salaries can vary from a basic of about $25k to about £100k as measured on a fulltime employment basis (valid in the UK in August 2010). The lower rates are found in tele-sales roles such as media advertising and the top rates in high value complex solution salesfor IT or consulting services. These costs are obviously subject to various overheadsassociated with employment and commission. Daily rates for contractors typically vary from£100 - £300 per day for sales executives and more for sales directors and consultants.When recruiting for full time employment or sales contractors it is useful to determine whereon this pay scale you are looking to recruit from.One of the quirks of the contracting sector is that very experienced people in the 45+ agebracket are often available fairly cheaply given their experience.However, a clear understanding of the sales model and type of sales staff is required in anysales situation, especially where outsourcing is involved.Sales Management / DirectionWhere the outsourced sales solution is more than a single person then some element ofmanagement will be required. Even where there is only one person involved, certainaspects of an engagement will also fall under the ‘management’ function.Outsourcing sales direction can provide an experienced sales director at a fraction of thecost of in house equivalents. There are many aspects to sales direction, the basic functionsinclude:  Driving the sales team to close business and increase revenue  An accurate weekly/monthly forecast and process review.  Weekly management to coach and direct the sales effort.  Strategic sessions to help with overall business growth and planning, including the review or determination of value propositions.  Creating a sales manual defining how the sales function operates in the company.  Sales resource/recruitment, for example, the candidate selection process.  Contribution towards company ‘best practice’ methods for operating a sales function. This can include resourcing, the sales model (how we sell), the sales cycle (the route to a sale) and sales process - including departmental interfaces (vital in a professional service operation), forecasting and reviewing processes.The sales director will interface with your internal or external lead generation, marketing,and sales teams.In some cases, the sales director will run some or all of the marketing function as this is fullyrelated to the sales effort and lead generation. If they do not control this function they willcertainly need to contribute through management meetings and perhaps service levelagreements for marketing expenditure and results = leads. Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 9 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing AlternativesWhilst the daily rate of a sales director may seem comparatively high, relatively little ofhis/her time may be needed. In a small sales team environment of 2-3 people, after theinitial setup phase, only half a day every week of sales management may be required.Sales manager / director outsourcing can also be purchased in isolation as an ‘interimmanager’. This should be considered if the client:  Has sales experience but insufficient time to properly set up, operate and review the sales process.  Lacks significant, board level sales experience.  Considers the risk and cost of a full time sales director as too expensive. Their basic salaries range from £60k to £100k. These costs double when other benefits and bonuses, including equity are taken into account.Lead Generation and MarketingA key consideration for CEOs and sales and marketing directors is how to generatesufficient leads to fill the sales pipeline.There are many different ways to generate leads, including, media relations, promotionalevents, white paper marketing, e-marketing, the web site, social media, networking andtelemarketing to name but a few.Should lead generation be outsourced?It is rare for a good sales person to also be an effective cold caller or lead generator. Whilstmany Sales Executives may be good ‘all rounders’ there are usually areas where they areweaker or simply uncomfortable. Many sales executives dislike generating leadsthemselves, especially where cold calling is involved.Typically, when a sales person has undertaken (usually as a last resort) cold calling andgenerated their own leads, they step into their preferred role of converting the leads intosales. Whilst this is going on, there is little or no lead generation taking place. For thisreason splitting out the lead generation, so that it is a regular ongoing activity can beworthwhile.Many marketing departments do not offer a regular and/or robust lead generation service totheir sales organisations. Poor or lethargic marketing departments often misdirect theircampaigns; and the leads produced are of low quality. This can be due to many reasons,often insufficiently targeted contact database and poor qualification of leads.The problems of undertaking lead generation internally also fall foul of managing the“internal” sales function. This is commonly staffed by relatively, inexperienced sales staffwho constantly look for their next career move away from cold calling.Above all other factors, the quality of the researchers/telemarketers undertaking the callingis of vital importance. Investment in data, process and technology will achieve nothing ifthe person chosen to make the calls is of insufficient quality and lacks experience.Outsourcing lead generation to a capable company ensures the aforementioned servicesare provided and managed professionally. A lead generation contract ensures your chosenservice provider focuses staff attention on using their core skills to increase your revenue,without diverting your sales force from the areas of the sales cycle, where they are mosteffective.MarketingIf an outsourcing organisation is contracted to solely provide sales, they will need a clearunderstanding of your marketing strategy, expenditure and the associated service level Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 10 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing Alternativesagreement. It would be unrealistic to reduce marketing and not expect a reduction in leadgeneration and resulting sales.Many organisations are seduced by the commission-only sales option. As an example asales outsourcing organisation risking a £4k per month expenditure is very likely to do this ifthe client is spending £20k per month on marketing but unlikely to be happy if there is nomarketing spend! (See related whitepaper on Commission Only Sales)Many smaller organisations often suffer from having few, in house sales skills and little or nomarketing expertise or resources. For this reason, some or all of the marketing can beprovided as part of a sales and marketing outsourcing arrangement. This could includepress releases; collateral production and proof-reading, web-site messaging, Googleadverts (PPC),outbound mail and email campaigns, lead nurturing etc….Processes and systemsAn experienced outsourcer should bring a series of best practice systems and processes tobear on any engagement. Typically this would include:  CRM/SFA/Contact management system set up for efficient use in data management, cold calling, contact and pipeline management and client reporting  Sales methodology – so all people on the project know the status of leads and prospects – the client may need to be trained in this  Regular and clear project reporting  Quality staff, recruitment and training processes  ISO 9001 or similar accreditation for quality processesFacilitiesThe outsourcer should have local physical offices with full time staff and the telecoms anddata infrastructure to run several businesses.Expertise and intelligenceThis is an interesting issue. Ideally when recruiting for a position it would be reasonable toexpect, in a new business situation, to recruit an experienced person/team. The ideal mightbe a senior sales resource with 10 years domain expertise in the relevant industry orproduct sector.However, if this is not readily available it may take time and money to recruit the idealresources.This is one model of operation; the other is to use the outsourcer’s existing team, as long asit is experienced. This team will have all the sales skills, knowledge of the processes andsystems and the local markets. The only thing missing is the client’s proposition knowledgeand that is something the client controls and can easily disseminate to the sales resources.An outsourcer should also bring intelligence on the market as a result of operating in thesector for a period of time. Intelligence is often software information, as distinct from leads,but can be useful in initiating conversations and developing relationships.Full sales outsourcing solutionCombining all of the above services: lead generation; sales resource, direction, marketingwith facilities and expertise results in a fully outsourced sales solution.Outsourcing to a third party means that all day-to-day decisions and activities are handledby the outsourcing company but they may interact with your key company departments Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 11 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing Alternativeswhere input into the sales cycle is required. The Project or Sales Manager should probablyform a key part of your management team.The outsourcing company can vary key elements of the sales function: leads, operationaland management resources, over time, according to business needs. For example,additional resources can be acquired for a specific campaign, both in terms of the leadgeneration and follow up sales resource. At the start of an engagement significant effort isrequired in lead generation. After 6 months, more effort may be required in ongoing accountmanagement or opportunity management.A full sales outsourcing arrangement compares very favourably with trying to recruit a singleperson to cover all of these activities.Ultimately, an outsourced contract is usually based on revenue performance. It includes abasic retainer and commission or bonuses based on the revenue/margin delivered. Thecommission-only sales approach rarely performs well. Review the related white paperentitled “Commission-Only Sales – fact or fiction”.The basic retainer could be equivalent to the management and overhead costs of theproject, or it could be based on time and materials where all the project resources arecharged for on a daily rate.Given a base is being charged, the commission element could be relatively low, similar tothat given to a company’s own direct sales people.There are many aspects to negotiating a sales outsourcing contract, some of the variablesinclude: equity; commission, base rates, market exclusivity, timescales, sales support,marketing spend etc.Margin ConsiderationsThere are many aspects to an organisation’s sales and marketing effort. When choosingsales channels to market there are three main approaches:  Direct sales effort internally: your own sales and marketing team; premises, costs, overheads, legal etc.  Enlist partners/distributors/VARs/resellers - these are third party companies, whose business is aligned or complimentary to yours and naturally opens up opportunities for your product/service. They may even pay an upfront fee to become a partner if you are a market leader.  Sales outsourcing service providers are companies that will sell products or services on your behalf, within its range of expertise for a fee and usually a commission. They become part of your business rather than a separate channel.The key differences between the three models are their comparative costs and therisk/reward ratios. Outsourcing sits somewhere in the middle of these three options. Forexample:Option Upfront cost Risk Commission paidDirect/Internal High High Low (2-15%)Partner model Zero other than Very low High (35-55%) training, management time etc. Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 12 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing AlternativesOutsourcing Low Medium Medium (10-30%)Commission rates vary widely between engagements, product and industry and thesefigures are purely illustrative.Where the product or service or the sale is high value or complex, the partner model initiallytends to be quite unproductive in the first year of operation. In many cases the first salesorders will need to be developed and/or undertaken with significant support from the vendor.In these cases, an outsourcing sales solution can be far more productive.Where IT products are sold through distribution channels, margins and financial models arehighly variable and beyond the scope of this paper.BenefitsTo summarise, the benefits of an outsourced sales approach are many and varied:  A small initial outlay can dramatically reduce risk compared with other solutions because there can be a high return on investment due to the proven, successful sales people employed by the outsourcing company.  Flexibility and efficiency is increased by acquiring a wider range of skills as they are needed. Customers outsource services to compliment and support their own organisation’s core skills.  Reduced financial outlay by having an engagement where there are few upfront recruitment fees.  A two to three month Launch and Test phase can be used to prove the concept and likely success rates before committing additional investment and resources.  Resource levels can increase or decrease, as required, at short notice. Low performing resources can be changed, quickly and easily.  Sales resources can be split geographically if the outsourcer provides UK wide sales solutions. For example, a five day sales resource could be split: three days in the South, a day in the Midlands and a day in Scotland. The same principle can be applied to divide sales resources according to vertical markets or product groups.  Employee relationships are not created eliminating the associated overheads and risks.  You can have total resource control and management as with in house sales employees, with performance metrics and targets – subject to the method of outsourcing, initially agreed.  The outsourcer may also procure additional leads from within its network for agreed finder’s fees and commissions.InvestmentReturn on investment (ROI) is vital for those considering sales outsourcing. The outsourcershould provide a detailed costs and revenues spreadsheet to assist with ROI calculations,free of charge.In the methodology the preparation (Scan & Plan) phase is typically fixed price and is a fewdays at consultancy rates. Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 13 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing AlternativesThe Launch / Test phase is typically charged on a time and materials basis, for theresources utilised, plus a small commission for any early sales.In the longer term the arrangement could be anything sensible – a continuation of the timeand materials operation of the Test phase, a commission only arrangement or more typicallysome form of retainer and a higher commission.The items below indicate typical daily rates of contract sales people in the UK in 2010. Sales Resources senior level rates vary from £250 to $500 per day, according to qualifications and experience, with no recruitment fee outlay. Junior sales resources range from $150 to $300 per day. Commission and expenses are also typical. There are usually no additional charges such as holidays or sick leave. Sales Direction is normally only required in relatively small amounts and varies from around $450 to $1200 per day. Commission on sales is always generated at a pre-agreed rate, often between 5% and 15%. Method of calculation can vary slightly according to product or service. For example, software sales commission is usually calculated purely on revenue, service solutions are also often based on revenue, however, the rate has to reflect Return on the margins achieved. investment (ROI) Expenses should be kept to a minimum, however, is vital for those some are inevitably recharged to the customer, for example, travel and telephone usage or use of considering sales office facilities outsourcing. Outsourcing investment figures vary with contract although there is generally a basic charge per month and a revenue-linked, variable commission style figure.SummaryMany business functions have been successfully outsourced over the years and thisapproach has recently adopted and developed to optimise the sales function.This approach will become more common place, particularly within the small and start upbusiness community, as they often do not have or cannot afford to employ their own, inhouse professional sales expertise.In addition this solution is very applicable for an overseas company setting up in a newmarket where the outsourcer brings a wealth of local knowledge and contacts.About Selling PeopleSMDI was founded in 2003 and has rapidly become one of Europe’s leading sales and leadgeneration consultancies. SMDI has provided market evaluation, lead generation and salesoutsourcing services to a variety of companies, small, large and across multiple sectors.SMDI provides services, consulting, best practice and technology around the LAMPprocess.We operate in many sectors but our specialism is the demanding IT software sales sector.Within that sector we have particular expertise in: Business intelligence & knowledge management Help Desk & service management Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 14 of 15 Copyright © Selling People (SMDI Ltd)
  • White Paper – Sales Outsourcing Alternatives CRM & customer service ERP Media Internet marketingSMDI operates using a number of full time employed consultants, sales and tele-marketingexecutives, including in-house project and sales management. We supplement this withexternal associate resources to extend our skills and geographic coverage. Our externalnetwork consists of approximately 50 associates allowing us to operate in many sectors andgeographic areas.SMDI Ltd Phone: 020 3397 3270Unit 12, The Power HouseHigham Mead Email: julian.poulter@sellingpeople.bizCheshamBuckinghamshire Web site: www.sellingpeople.bizHP5 2AH Version: 5, November 2012 Contact: www.sellingpeople.bi 020 3397 3270 Page 15 of 15 Copyright © Selling People (SMDI Ltd)