Rethinking Outsourcing: The Perils and Potential of External SDR Functions

B2B data
Cold Outbound
May 17, 2024

In today’s lean sales environment, the allure of outsourcing the Sales Development Representative (SDR) function to external agencies is strong. The promise of rapid scale, cost efficiency, and quick deployment can seem too good to pass up. However, the reality often falls short of expectations. The nuanced, highly personalized nature of successful sales development makes SDR outsourcing a challenging proposition, and for many companies, it might do more harm than good.

The Pitfalls of Outsourcing SDRs

Firstly, outsourcing your SDR function is not a plug-and-play solution. It typically takes at least six months to gauge whether the external team is delivering value, a period fraught with intensive training and coordination. As sales lead Jason Bay points out, “You will discover how bad your messaging is, very quickly when working with an outsourced team. And if you think it’s not working within the first few months, you really need to reconsider your approach rather than question the process prematurely.”

Indeed, the problems with outsourcing often manifest as:

  • Inadequate understanding of your product: External SDRs might lack the deep product knowledge necessary to engage potential customers effectively.
  • Poor quality leads and meetings: Meetings set up by outsourced SDRs often result in low show rates and engagements with non-decision-makers.
  • Cultural misalignment: An outsourced SDR may not fully grasp or convey the company culture and ethos, which can be crucial in early sales conversations.

The Advantages of Outsourcing SDRs

Despite the potential pitfalls, there are scenarios where outsourcing can be beneficial:

  • Focus on Core Competencies: By outsourcing SDR functions, companies can focus on their core business operations while leveraging the expertise of specialized agencies.
  • Scalability: Outsourcing allows for rapid scaling of SDR operations without the need to hire and train new staff.
  • Access to Expertise: Reputable SDR agencies come with a wealth of experience, having worked with multiple clients across various industries. This expertise can lead to more effective sales strategies and outreach campaigns.

When Outsourcing Might Work

Outsourcing can work under certain conditions:

  • Established Outbound Processes: Companies with well-established outbound sales processes and messaging might see benefits from scaling their efforts through an outsourced team.
  • Clear Expectations and Training: If your team can invest the time in training and has clear, realistic expectations about what outsourced SDRs can deliver, the collaboration can yield results.
  • Stable and Easy-to-Understand Product: Products or services that are stable and easy to explain can benefit from outsourced SDRs, as they require minimal training and the learning curve is shorter.

Recommendations for Those Considering Outsourcing

For companies that decide to explore outsourcing their SDR functions, selecting the right partner is crucial. Here are some reputable SDR outsourcing agencies known for their robust processes and potential to deliver results:

  • MarketStar: Known for its comprehensive approach to outsourced sales and marketing.
  • Belkins: Specializes in appointment setting and email marketing services.
  • Martal Group: Excels in lead generation and sales as a service for B2B companies.

These firms stand out in the crowded space of SDR outsourcing for their commitment to quality and alignment with their clients’ objectives.

The Bottom Line

Ultimately, no external agency can match the nuanced understanding of a company’s value proposition that in-house teams possess. The intimate knowledge of one's product, market, and customer pain points is often lost when outsourcing the SDR function. As Jason Bay aptly sums up, "No outsider will ever understand your customers as well as you do. And it's only a bandaid to build a sales culture that doesn't understand how to excel at outbound."

For companies seeking growth and efficiency, investing in training in-house teams often yields longer-term benefits compared to outsourcing. However, if outsourcing is still on the table, choosing a partner who understands and aligns with your company's goals is essential for any semblance of success.

Conclusion: In-House vs. Outsourced SDRs

In my experience, if you have enough scale to insource appointment setting (i.e., enough SDRs to have at least one SDR manager), then you should insource because:

  • Cost Efficiency: You'll avoid the outsourcing markup.
  • Tailored Talent: You'll have talent more matched to your needs since you selected and trained them.
  • Talent Pipeline: You'll have a pipeline of talent to promote to junior Account Executives (AEs) or Account Managers (AMs), Customer Success Managers (CSMs), etc.
  • Optimization: You'll be able to rapidly optimize processes and strategies.

The only conditions under which outsourcing appointment setting might work are when:

  • Scaling Known Processes: You are merely scaling known/working sales engagement cadences to a known/working target set of accounts and personas.
  • Stable Products: Your product/service is stable and very easy to explain/understand (SDRs do not require much training; especially since outsourced SDR turnover is high, so you'll have to train a revolving door of people).

Recommended Outsourced SDR Agencies

If I did not scare you off, here is the list of all appointment setters ever mentioned in MSP threads. Comments are those of folks from the threads. Asterisks (*) denote good agencies according to Sales Leader Jeremey Donovan:

  • Acquirent
  • ArcGate
  • AWM Interactive (for Latin America)
  • Annuity Systems, now Linvio (in Oakland – Stu Holloway) (*)
  • BAO (By Appointment Only)
  • Baxly Group
  • Clarus Designs (Greg Dalli ***)
  • ConnectAndSell (MSPers have had mixed results) (possibly more B2C)
  • ConnectLeader
  • Conversica (100% AI bot?)
  • Databees (good for APAC list building)
  • DemandDrive
  • (EBQuickstart)
  • Entourage BD - Matt Dyment (UK)
  • FrontLine Selling (Lauren Kornitsky or Jackson Tate)
  • FuseMachines (Jon)
  • GetDataBees
  • InsideSalesBootcamp
  • Inside Sales Solutions
  • (Steve Hays & Brian Vital) (***)
  • Kopp Consulting (possibly more experienced working with C-Level)
  • LeadJen
  • Leaper (call center)
  • Mansfield
  • MarketOne (global campaigns)
  • MarketStar (*)
  • N3 (Latin America)
  • NetDmand
  • (based in UK and cover EMEA; many languages) (*) - Aurelien Mottier-
  • (for Latin America)
  • OutboundWorks
  • Predictable Revenue
  • PunchGeneration (based in London) - Ari Snider
  • Qualified Opps (stay away!)
  • Quality Sales Leads - Lee Kettleton (UK)
  • Revana (call center)
  • Revboss
  • Revenue Zen (need to confirm they are appointment setter)
  • Tactical TeleSolutions (TTS)
  • Vocus
  • VOIQ (possibly more B2C)
  • Vorsight (*)
  • Whitelight (Europe)

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