In this episode of SaaS Half Full, Lindsey Groepper chats with Eric Quanstrom, CMO at CIENCE about when and why you should outsource your sales development reps, the cost of outsourcing vs. in-house and why inbound marketing alone isn’t the holy grail of lead generation.
When deciding whether or not to outsource a sales development rep (SDR), Eric believes there is no single correct answer. You should base your decision on your SaaS business’s circumstances, goals, agenda and approach.
When You Should Outsource SDR’s for Your SaaS Company
Eric believes the business model is the first criteria SaaS companies should consider when deciding whether to outsource outbound SDRs.
“If you’re running a freemium product or something with a very low kind of ticket price, seat, license, whatever — outbound won’t be a good fit. The costs associated with running successful outbound programs will exceed customer acquisition costs,” said Eric.
“You should also factor in how you plan to grow your sales org,” says Eric. “If you want to have an SDR lead motion and grow a farm team of SDRs within your business — with the explicit hope of turning them at some point into sales [AEs] — an outsource agency like CIENCE probably won’t make a ton of sense.”
What if you commit to mastering what Eric calls a “deep understanding of why people might care to have a conversation in the first place?” If you plan to divide your sales org by areas of specialization — with SDRs as the first outbound touchpoint and truly master what Eric calls a “deep understanding of why people might care to have a conversation in the first place,” then outsourcing that specialty might be the right move.
Cost-Effectiveness of Outsourcing SDR’s
Is it more expensive to outsource an SDR vs. hire in-house? When you analyze the total cost of an internal hire, the answer is often. Training in-house SDRs to become conversation-starting specialists can scale over time, especially once you factor in:
- Training
- Software
- Salary base
- Commission
- Management hours
By outsourcing SDRs, the agency onboards, teaches and trains sales talent on a proven and repeatable process. This approach ultimately provides career progression paths within the SaaS company and eliminates many costs and organizational and managerial headaches.
Inbound Marketing vs. Outbound Sales
Eric believes most company leaders value outbound cold calling, but marketers often believe inbound tactics offer the path of least resistance. Inbound marketers typically want permission-based leads, which often generate highly competitive deals.
If an inbound lead requests a demo, they’re likely demoing your competitors, too. An outbound approach, on the other hand, empowers you to set the tone, find the interested parties to use your software first, and guide the sale through to close. This approach becomes inherently less competitive and easy to attribute from where the lead originated.
Eric encourages marketers to think about how inbound and outbound can work seamlessly together. “When we start to run outbound programs for our clients, we see their inbound picks up, too. It’s really simple — you’re running awareness campaigns to high-value targets, and a lot of them, they just come right around the outside at their own time, doing it their way.”
For more of Eric’s insights, listen to Episode 314 of SaaS Half Full.