When to Make the "Inside Out or Outside In?” Decision
When should a revenue executive break tradition and habit to look for an outside expert to develop new or improved sales strategy and validation? When a Fortune 500 company faces big challenges and change, the answer is “Often” and they seek big consulting to help outline the solution. They can afford the expense and understand the value of fresh, outside and unbiased perspective of experts (and they like the CYA). Smaller companies typically say “Never” and instead choose an Offsite-brainstorm, the “Tiger Team” or a new hire to figure out, staff the solution and run it. The classic justification is the belief that insiders know best and outsiders are cost prohibitive.
Let’s assume the wisdom of expert-based work-projects and the “Gig Economy” is becoming widely understood and accepted (US Dept of Labor believes by 2020, more than 40% of our workforce will be contract and 1099 work). Now you can envision a specialist or team of experts coming in to accurately assess the situation, recommend a solution and validate the new model with the initial execution (~20% of that workforce will be business professionals like sales, Emsi 2017). All with less disruption and distraction to the core team until proven. That leaves the Cost-Effectiveness question.
Outsourcing key sales and marketing functions may not be broadly practiced today, since few providers offer this service. However, when you find a match of expertise-to-need and after a thorough analysis, the total cost of the solution will be far less than hiring.
We completed a detailed total cost analysis and ROI calculation for prospects and clients, and in every case the pure cost or cash outlay advantage of outsourcing is less than 30% of a comparable FTE team. The most effective outsourced engagements are still embedded within the organization which takes internal resources to support and collaborate; however, the distraction and opportunity cost is far less than the internal-only option.
Unique advantages to outsource and expertise contracting that is specific to sales and marketing function:
- Higher ROI and lower Total Project Costs (noted above and details can be forwarded, click here)
- Straight and accurate answers from pure outsider and unbiased perspective
- Incremental contacts and prospects for feedback and opportunity
- Team of functionally and/or market specific proven experts
- Fast ramp-up with proven process, templates, tools, data and technology
- Best practices drive metrics and reduce iteration
- Effective and smooth transition processes from validation phase to production
Toptal, an Andreesen-backed venture that specializes in top-tier IT contractors sums up the comparison well: “It’s truly astounding how few executives properly account for the real cost of their labor. In a product company, these errors can eat away at your bottom line. And in a services business, these errors can even result in spending more to provide a service than you’re charging for it.” While most investors embrace fast iteration and pivots, getting it right the first time is still the preferred strategy.
We are not endorsing outsourcing your sales or partner programs. Rather, we have seen the productive and beneficial results for projects and stage specific challenges from outside experts. Once their hypothesis is validated then the knowledge is transferred to W2’s to standardize and grow. Granted, we are those expert providers and thus biased, but it’s this belief and experience that formed our mission 18 years ago and the concept continues to grow well outside of Altus Alliance.
If you are interested in exploring the possibility of outsourcing your next launch or revenue growth initiative, or simply frustrated with the challenge of scaling sales, feel free to reach out. As always, we are happy to share our experiences with you and provide more details on the insights above.