“I know we need to get out there and sell our firm’s services, but I don’t want to be the one to do it, and I can’t justify a full-time position. Can’t I outsource it?” If you’ve ever posed this question, this issue of the Win Without Pitching Newsletter is for you.
First, let me be clear on what I mean by sales. After positioning (a marketing function) there are four main functions in selling. They are the identifying, qualifying, nurturing, and closing of prospects. (If you are a new reader you should know that when I say qualifying I mean determining the prospect’s place in the buying cycle.)
I have previously written that the function of closing (securing the engagement) should be the domain of the principal or CEO. I think it’s obvious that the act of identifying the most appropriate prospects for the firm is a function that should also be kept in-house. That leaves qualifying, which includes introducing the firm to prospects and determining their place in the buying cycle, and nurturing early-stage buyers (those a long way from buying) as the two functions of selling that might be candidates for outsourcing. So the proper and more nuanced question is what are the pros and cons of hiring an outside provider to introduce your firm to prospects, qualify the opportunity they might represent, and nurture them over time?
Reasons to Outsource
There are three reasons to consider outsourcing any function: saving money, freeing up time to focus on core strengths and more mission-critical functions, and gaining access to specialized skills. Some trade-offs inherent in outsourcing include managing the outsource partner, and managing your own expectations around results. Let’s explore each of these three reasons to outsource and consider some alternatives.
1. Outsource to Save Money
In my experience, expense is the primary reason why agencies consider outsourcing over hiring. The thinking is that if the current market for a quality business development person is, as a hypothetical example, a total compensation package of around $10k per month, then outsourcing at $5k or $6k per month represents substantial savings. The question to be answered in this model is what are you sacrificing for your savings? The answer is either quality or quantity. You’re buying a person of lesser quality than one that you would hire at the going rate, or you are purchasing less than one full-time equivalent (FTE) person. The reasons for not sacrificing quality are so obvious (I hope) that I won’t explore them here.
Maybe your firm is so small, so busy, or so specialized to the point of significant competitive advantage that you do not need a dedicated full-time business development person. In this case, you may be willing to pay $5k a month for half the time of a quality individual. This is where the idea of outsourcing begins to become viable.
But there are other means of saving money by employing less than one FTE in outsourced services. One of them is to assign the function to a part-time employee, and another is to have a full-time employee assume business development responsibility along with other functions, usually client services. I am not a fan of this latter model, as I have previously written (Set Your Account People Free), but the former has some possibilities. The obvious challenge is finding an effective business development person willing to work less than full time. Principals and employees interested in transitioning into retirement are as good a source as any.
2. Outsource to Focus on Core Functions
There are two main functions in your firm: getting clients and adding value to those clients. Parts or all of the remaining support functions of finance, human resources, and information technology are the obvious candidates for outsourcing. But couldn’t parts of the two main functions be outsourced too? After all, how mission-critical is the act of introducing the firm to prospects?
Management consultants like Tom Peters love to tell tales of corporate maverick Southwest Airlines. One of the better-known stories is the veto power the receptionist wields in hiring decisions, and the qualified pilots who did not get hired because of the first impression they made on her. I wonder if Southwest founder Herb Kelleher, who knows the power of first impressions, would outsource the introducing of his company. The truth is, if you are considering outsourcing to focus on core functions, components of other less critical functions already mentioned are more viable candidates.
3. Outsource to Gain Access to Specialized Skills
Clearly some people are better at telephone introductions than others. But the skill required is neither complex nor uncommon. In my experience, the missing element that agencies are hiring out for is not so much skill as it is knowledge: an understanding of what the objective of the call should be, what to say in the call, and what the next steps should be after the call. Once a firm has a clear understanding of what to do, it becomes far easier to find and train someone to do it.
But there is a trade-off in this hiring out for knowledge. You may gain specialized knowledge by engaging a firm that employs a proven, specialized business development process (in most cases you do not), but you sacrifice knowledge of your firm. The person introducing your firm to your prospects has limited knowledge of your firm and how you help your clients, and this is not something easily hidden from prospects. Being physically removed from the agency’s office impedes the transfer of knowledge that an onsite person receives virtually through osmosis. This poses a significant problem for selling professional services because the product being sold is the firm’s thinking, and assessments of the quality of that thinking are made at every interaction. Effective salespeople probe knowledgeably about the prospect’s challenges. They then overcome credibility objections, spoken or silent, by discussing similar challenges the agency has previously faced. Outsourced introduction specialists serving multiple clients cannot readily have these in-depth conversations.
This sacrifice of intimate knowledge of the firm is one of the most compelling arguments against professional service firms of any kind outsourcing any sales function that cannot be tightly prescribed and controlled.
I believe that for some agencies some of the functions of selling can sometimes be successfully outsourced. My caveat is that I have yet to see it done. I will further add that I believe in the long run any agency would be better off investing in personnel and optimizing its own sales processes than by outsourcing. If you have read this far and you find yourself still considering outsourcing sales functions, it’s time to commit to answering the following question as honestly as you can: why is it that I do not want to put the time and energy into selling the services of my firm?
I would like to hear your feedback on this subject, especially if you have any experience in outsourcing sales functions.