The answer? Well, it depends.
A virtual sales team and an in-house sales team are both designed to manage your company’s sales operations. However, there are key differences in their structure.
Virtual sales team:
- Works for an agency or works independently
- Paid to run your sales department
- May work for other organizations as well
In-house sales team:
- Built internally through a company hiring process
- Paid a salary and typically a commission
- Works only for your company to manage sales operations
A virtual sales team is basically a third-party provider/virtual service that runs sales for you (at a cost). They professionally execute on the sales model you’ve created to drive sales. The provider either creates a virtual sales team specifically for your company or they use reps already available to run the sales process. Sales reps might also be independent contractors who work outside of an agency.
Outsource sales only if it matches your company goals
You should hire a virtual sales team if one or both of the following is true:
- You can’t afford an in-house sales team.
- You are testing a market and don’t want to commit to an organization.
If you’re on a shoestring budget, outsourcing sales can help minimize the high costs associated with maintaining an in-house team (e.g., recruiting, training, retaining) so you can put that money toward improving your product/service.
Or perhaps you want to test your product/service on a small scale to determine if it fills a need in the market. A virtual sales team offers the opportunity to sell the initial idea without sinking piles of money. It also provides a foundation for scaling your business in the future if the idea proves successful.
It’s important to note that a virtual sales team should not be a cop-out for work you should complete yourself. First, you need to understand the sales process to help with things like strategy and sales forecasting.
You and your team know your product/service better than anyone else. Although you may not have built a sales funnel yet, you are responsible for going into the market and determining things like
- How you’ll find leads
- How you’ll qualify them
- How long you think the average sales cycle will take
- Customer acquisition costs, etc.
Gathering this information will help you develop a sales model and provide a foundation for a virtual team to execute sales.
That said, before handing over your sales to an outside party, there are many things to consider. To decide if outsourcing is right for you, let’s take a look at the challenges and opportunities associated with a virtual sales team and then review steps to building a team.
Challenges & opportunities of outsourcing sales
Just like with an in-house team, a virtual sales team will have unique problems and abilities. A customer relationship management system (CRM) can overcome many of the major challenges associated with both options. The challenges listed below, therefore, are just some things to be aware of as you think about which option is best for your business.
An in-house sales team will naturally be closer to your product/service. They will be “in the trenches” and easily able to ask you or other employees if they don’t understand something. A virtual sales team can present challenges such as:
- Less control – Quality relationships between sales rep and potential customer are crucial if your startup is going to grow. You’re not able to constantly monitor relationship touch points with an outsourced team, so it’s difficult to track if they’re focused on a quality customer experience. Broken confidentiality is also a risk, particularly if you have innovative software. You have to be very discerning in who you hire.
- Communication problems – How will you communicate with your virtual team? Email, chat, Slack? Do your time zones align? While an in-house sales rep can simply pop in your office if there’s a problem, a virtual sales rep might have more difficulty relaying important information. Again, a CRM tool can help with this issue, but if you don’t have that, important messages might fall through the cracks.
- No internal talent development – Internal skills and knowledge that could be beneficial for your company in the future won’t be retained with a virtual team. A virtual sales rep likely won’t have the same deep and specific knowledge of your product/service or the same passion that comes from being involved in the everyday process and part of your internal culture.
Because of the nature of these challenges, virtual sales teams are better suited for companies that don’t expect sales to be a core competency. If you do, you should be developing talent internally and hiring sales professionals who can grow with your company.
Outsourcing sales (or any other startup process) is a perfect example of delegating. Yes, you have to be careful, but it can save you significant time and give you the ability to focus on management activities and improving other areas of your startup.
- Learn from the best – If you are just starting a company and don’t have any experience in sales, turning to virtual sales experts might be the way to go. The hiring and training are taken care of for you, which helps avoid operational inefficiencies. You can also take note as to what works best in the sales process and what type of training will be required if you hire an in-house team later on.
- Less risk – Not only is a virtual team cheaper, the risk is also lower. The cost impact of hiring and retaining an in-house team is not a concern, since if there is a problem with your virtual sales team, you can easily switch providers.
- Lower overhead costs – Unlike an in-house team, a virtual sales team does not require a full-time base salary (the average compensation of an in-house sales development rep (SDR) is $72.1K). You can hire by the month, day, or hour — whatever makes sense for your budget. This can help scale sales. In addition to salary, administrative costs, training costs, and management costs are lower for a virtual team. You also don’t have to spend time and money on employee retention.
Avoid the traditional costs connected with an in-house team by using a virtual sales team instead. Not only do you save on employee set-up, you also benefit immediately from the skills of seasoned professionals rather than spending time training new sales reps.
How to build a virtual sales team
If a virtual sales team makes sense for your company based on the above information, you need to consider several key things to ensure you hire the right third-party provider/virtual service for your industry and company.
In addition to your initial sales exploration discussed at the beginning of this article, below are specific steps you can take to properly outsource your sales team.
Step 1: Outline goals & budget
Create a strategy that breaks down your business needs and what kind of outcomes you want. What are your overall sales goals? If you are testing the market, how many sales do you need to know you will be successful there? How much money can you allocate to sales?
Based on your needs, determine the max amount you can spend. Remember that you want to balance cost and quality. Top expertise is worth it and will save money in the future if done correctly.
If you are outsourcing the entire sales process, you need a provider that does it all from lead generation to qualification. Let’s take a look at average costs:
- Independent sales agent: $40 to $60 per hour (as compared to $87 per hour of an in-house sales rep).
- Agencies: Price can vary based on your needs but $2,000 to $10,000 per month is a range to keep in mind.
Some agencies charge a rate as well as a commission fee. Scout around for top providers or contractors and find out what type of pricing packages they offer.
Step 2: Research & choose a provider
You can choose a provider that a) builds an outsourced team specifically for your company b) uses their own sales reps to manage your sales process or c) acts as an independent sales agent.
Look online at reviews and also ask colleagues if they can refer a good agency or individual. Upwork is a possible place to find independent sales agents if you’re only looking to hire one or two.
Choose a few options based on your industry and review their expertise. For example, if you are a B2B startup, finding a provider that specializes in B2B sales makes the most sense.
Consider asking potential providers the following questions:
- What is your organization’s selling record in my industry and market segments?
- What type of training do you provide your reps?
- Do you choose the reps for me?
- What types of tools and CRM do you use?
- Can you provide examples of similar companies you’ve worked with and the results?
Find out also who manages the sales reps, what their leadership ability is, and if the sales reps are capable of top-level conversations. Of course, the questions above will be slightly different for independent contractors.
Discovering the answers to these types of questions will help you determine if the provider aligns with the strategy and vision for your company. The answers will also help you understand if the provider has been successful in the past and if they would be effective leading sales operations in your industry.
Choose a provider based on their expertise, your budget, and company goals.
Step 3: Engage with provider
Once you’ve hired an outsourced sales team, it will take time for reps to get onboarded, ramp up the sales process, and for results to be seen. That said, don’t step back to let the virtual team run sales by themselves. Yes, they have the expertise and you shouldn’t micromanage, but you need to be involved in the process just as you would with an internal team. Here are a few things you can do:
- Schedule weekly meetings with your outsourcer.
- Establish an open line of communication with sales reps.
- Provide training about your product/service, update when necessary, offer sales enablement tools, etc.
- Regularly check on key metrics and analytics.
- Align outsourced sales with your marketing team to improve sales enablement and buyer personas.
Intentional management helps ensure that the sales process is on the right track and that end goals are being achieved. It also helps identify the most effective sales methods to implement with an internal sales team in the future.
The point of a virtual sales team is to take your sales model and turn it into a well-oiled sales process. If you’re still unsure if outsourcing is the right approach for you, try outsourcing certain sales activities first (administration, lead generation, etc.). Outsource the entire sales process later if results are good and it aligns with your company strategy.
Timing is a key factor in choosing to outsource sales. What might work now may not work in a year or two as your company grows. But especially in the early stages of a company and if you’re tight on funds, outsourcing can be a helpful strategy.
Again, a CRM is a great way to monitor all communications and the sales process of a virtual sales team. Check out our platform and also let us know your opinion on outsourcing sales. Do you think it’s a good approach? Let us know in the comments below!