NASSCOM EMERGE Community Catalyst for Growth of Emerging & Start-Up companies

Sarada, we're tried both, to varying degrees of success. When we started US operations some years ago, we initially outsourced the whole thing, assuming that "locals" would do better from a cultural perspective. It failed miserably, so we moved to an internal team that actually did better from Day One. We later moved it back to an outside team mostly because they could do better in terms of language, intonation, even details of local baseball teams. That worked - we were talking to a different target market when we moved the team out, so I think that helped. We started with SMBs in California but we wound up selling to CIOs in the Midwest.

In a later company in India, we did use an outside agency initially, but the cost-per-lead was so high that we moved to an in-house team and improved not just the cost but the effectiveness, too. So also the employee turn-over - ours was actually less than what we saw with the outside agency.

In hindsight (always 20/20!) I think the reason the outside team in the US failed was not because they were not good enough but because we were not clear enough. While the delivery team was over 200 people, the sales and marketing team was hardly five. And these five people would constantly "innovate", evolving the service and tweaking their message sometimes a couple of times a week. It's the same issue in my current company - while the offering does not change so regularly, we are more adventurous on the marketing side, changing positioning and looking for new niches. And, being a small company, there is much less process and documentation. Conveying continuing changes to someone sitting in a different location takes effort that, instead, can be expended on involving an in-house sales team more closely with Product Management. So here, we use an internal team that sits close to where the product managers are. This has worked very well.

There are obviously other considerations, as we saw in both our contract situations: their salespeople are better trained, they have better/larger systems, their CRM has CTI and so is able to monitor effort-to-return more effectively, their focus on details is better, they handle employee turn-over smoothly and so on. But they did cost more than our internal teams, regardless of effectiveness.

So there's my opinion: if you think your sales team will need to operate in a fluid, unstructured environment, you should probably go the in-house route. If you can put together a clear tactical model and stick to it for some reasonable length of time, an outsourced group may work better. Given, of course, that the cost-to-effect parameters work out OK!

Creating a winning team within your organization is ideal. They can only understand better than any outsourced partner. At the same time, certain branding activiites like creation of 'awareness' can be outsourced.

Sarada,

I go back to this Pragmatic Marketing Framework slide all the time when I get a Marketing / Sales question in my mind. I consider this as one-page-bible for those who are marketing technology products. While this framework is relevant to product companies, many of the blocks are relevant to Services companies too. I know your company deals with both product & services, hence you can definitely use this.

Obviously, we all know there is no one solution for S&M, as everybody's problem is unique! Broadly, as a technology person turned into sales & marketing in the last 5 years, the key is to keep the strategic items inhouse and tactical / transactional items outsourced to specialists, who do that for a living. The above link gives an idea for strategic items and tactical items! Also there is a confusion between Marketing and Marketing Communications. Most actually mean marketing communications when they use the word Marketing in a conversation. In my opinion, marketing Communication can be outsourced, but marketing should not be outsourced, because that is what is your business all about!

Suresh

In my experience outsourcing works, but it is expensive in the initial stage . Internal teams are the ideal choice but it takes quite some time for the team to perform specially in a new market.

Hari

Thanks for responding with a lot of passion.  Can any one of suggest few comapnies  with which we can start outsourcing the inside sales acitivies.  I would appreciate, if you can also let me know what will be acceptable charges for such activities

Sarada,

Some of our members have used this agency and have found them very helpful. Please try and explore them:

Michael Loh
Business Development Associate
US Market Access Center (formerly the IBI)
The Global Business Embassy of San Jose and Silicon Valley
Tel: +1 408-351-3323
Email: michael@usmarketaccess.com
http://www.usmarketaccess.com

Thank you.

Regards,

Avinash

Sarada,

I came to know that this book is truely good. Check it out: http://www.actionplan.com/index.html

Suresh

Sarada,

I think sales is pretty much about the last mile connectivity (very crucial ofcourse) but the success of the sales organization hinges on the success of marketing to create the right platform. A sales interaction is usually referred to as the "moment of truth" and in order to leverage this optimally, marketing has to deliver. This hypothesis is true for most services organizations where the prospective customer base or wish list is just about a couple of hundreds.

Creating a integrated sales/marketing engagement strategy would be invaluable. The "pragmatic" marketing framework suggested by suresh is a great place to start identifying what areas to insource, outsource or cosource. However it is always a 50/50 or 20/20 like narasimhan pointed out. There have been success stories and sob stories at both sides.

No doubt managing sales internally can give you control but one distinct advantage outsourcing can give you especially in the "emerging" stage of an organization is the flexibility in terms of costs with access to best practices and expertise. Reason why you should outsource some of the strategic pieces of sales/marketing to a competent partner.

Last word: Evaluate a hybrid model (key prospects or selling to a wishlist in-house, others outsourced or vice-versa)

I totally agree with Pramod. It is always difficult to get the marketing program started, just like the morning excercise program we all wish to start. Most of the top level energy goes on quick win sales activities. From my own personal experience, you don't need a huge team for marketing, because it is a highly intellectual work. Marketing is all about your business and the leadership team at the top knows about it anyway. Some amount of orientation might be required in terms of messaging & communicating what is business is all about, which can be provided external marketing agencies. Another beauty: Marketing is the one that brings the SCALE! Sales becomes a fulfillment job, last mile as Pramod puts it, when marketing engine is cranking!

Sarada, Another article which I read in the DARE magazine which might be interesting read.

Should you outsource marketing and sales?

Regards,

Avinash

thanks for the response.  right now we are trying to work out a hybrid model of outsourcing the generating leads to a 3rd party while from there we will take it upon to convert it.  I am in the process of evaluating 3 companies, (all from India) and will let you know why and how we selected those companies.  Of course, I would be more than happy to share the news of our success as when it happens with this group.

Before signing off, I just want to say that 3 companies have given 3 different quotation with so much wide margin,

a) so what are the parameters I should look for when I select and

b) what is the normal payout for such agencies

c) is there a % share in the topline apart from the monthly retainer.

Sarada

Hi Sarada,

This is pretty complex.

In marketing there is a pull and then there is push. Sales strategy for both will be different. But before embarking on a strategy, it is essential that the management is clear on who the customer is. How will your service help the customer? Why you and not anyone else? Be honest when you respond to it. When you try to answer why you are not best suited also. A small-medium sized firm with generic IT services is likely to face trouble. So one solution is becoming everything for a chosen vertical then trying to be everything to everyone. How this helps? Considering there will always be constraint, if you focus all your energy in point, you are likely to break the wall quicker. On the contrary, if you try to spread, your are likely to be weak.

Small and medium sized organization should invest in creating a strong sales team where at least the head is experienced and has a track record. Freshers or juniors are cheap but may take that much longer to deliver.

Execution - inhouse or outsourced, is important but secondary. I may be wrong but I haven't seen companies in B2B which have grown by outsourcing their sales. To grow you need to be on top of the relationship. But then my experience is limited and I could be wrong. If anyone else has a different experience, please do share.

Ganesh

Thanks to all who have contributed to this topic.  I take this opportunity to personally thank each one of you as everything you had written is very valuable for me to take a decision.

At this point of time, we have decided to outsource our Inside sales team work(Sriganesh just a clarification, only the first part  which is  db building, cold calling, finding prosepcts and leads and then fixing up a meeting with a client is being outsourced).

Now I have 3 agencies which have given the quote - which ranges from US $ 1000 to US $ 2500.  So here we are trying to take a decision of which company should we take.   let me put things very openly in this forum.

Of the 3, one company we have eliminated becoz, for them starting a night shift to cater to US market will be a challenge and we dont want to experiement with them giving this challenge.

The second company is a new company.  But what brings this company into reckoning is that the key people are very good in sales and having promoted their own company and made that successful have come out of their company (dont know why they had surrendered their equity to another partner) and  is starting this business.  so he knows the sales process and also knows how to convert in the US business scenario.  so effectively we will be take a chance with them but my gut feel says that what they say they will deliver they may still deliver.   if they dont deliver, Here my loss will be more of lost opportunity cost and less of money.

The third company is into this doing this work for few indian companies.  But their quote is highest.  Though they have said what their deliverable is, still we have to give the order and then see.  Here we wil not only loose time, but also heavy investment

So, my question is if you were in my shoes, what will be your decision?  I am also reminded of my company competing with other bigger companies and loosng the deal to them since I will be in the second category.  this is very much like how I feel with my client's  thinking  - that though I am small company, I know what I am talking about and so give me the order vis-a-vis the other company has experience in having handled similar project so it was fair that the order went to them.  This is my dilemma. 

Looking forward to your decision support

so here is the latest in this topic.  We have signed up with a startup company in Madras to outsource the inside sales team functiontioning to them and will be having 2 BDE who will be working on our behalf and help in reaching out to potential customers.   Through various analyis we came to conculsion that they have the passion to deliver (having proved themselves in their earlier company) and becoz it is their first order they will go all out to win, as they know much rides on their success.

I will come back to the forum after a couple of months with regard to their approach and what is the success they are having.

My sincere Thanks to each and everyone of you who have helped me in coming to this junction through spending your personal time and writing and sharing your experiences, thoughts and also giving me action points.

Sarada

There is pros and cons to both the approaches. We have tried outsourced sales model but found out that the onus of developing, nurturing and mentoring the sales team lies with us and it also entails that we need to do a lot of follow-up, sit in geographically different locations which makes it difficult to monitor their performance and also take corrective actions and rebuttals immediately. There is one more concern over replication of service, today most of the Support services are generic which means that once we give all the knowledge to the Sales team it is easy for them to replicate and start their own.

But the advantages are targets would be achieved/delivered as it is SLA bound and there is no headache of identifying and retaining good sales guys

Whereas having an inhouse sales team makes it easy to monitor their performance regularly and also involve them in organisation growth and give them a totally different career path

There is always a problem of attrition which we need to face though

Hi Sarda,

I have followed this thread with interest. I am curious as to how the first 3 months are shaping out for you. Any experiences you can share will help me make my own decisions regarding some of the challenges you have articulated.

Regards,

Arvind