Why Are Most B2B SaaS Companies Choosing SDR Outsourcing in 2020?
SDR outsourcing is a growing trend, due to the increasing challenges that come with building an internal sales development team.
For B2B companies, having a dedicated SDR team to qualify leads and set sales appointments is essential for a strong sales pipeline.
In many cases, B2B SaaS companies see significant pipeline growth within the first few months of using an outsourced solution, as opposed to building it internally.
Let’s take a closer look at some of the factors that are leading companies to outsource sales development:
1. Costs of an internal team
Given the high likelihood of SDR burnout, it’s not surprising that turnover rates for the role reached an average of 39% in 2018, according to a report by The Bridge Group. And if you’re a high-growth company, this rate tends to be even higher. With nearly two-thirds of turnover made up of involuntary terminations, companies have started looking to outsource this position to organizations that specialize in hiring and retaining for this role.
The costs of hiring, training, and managing an SDR team aren’t the only concerns impacting the bottom line. As with most roles, one can expect the actual cost of an employee to be 1.25 to nearly 1.5 times their salary.
Building an internal appointment setting team means you’re paying for employee benefits, equipment, and office space, too. Recent reports show that companies with internal SDR teams spend an average of $371 per month, per SDR on sales acceleration technology tools alone.
A lot of money goes into building an internal team, but how long does it take to start seeing a return on this investment? The Bridge Group report found that the average ramp time from new hire to full productivity for SDRs is 3.2 months.
Taking all variables into account (experience at hire, the average selling price of the offering, and a company’s level of growth), it’s a well-established truth that ramping new SDRs to their most productive takes about three months. Considering that SDRs only stay with the same company for 1.5 years on average, opting for an internal SDR team translates to a lot of time spent getting new hires up to speed.
2. Keeping the sales team focused on closing
Value of a salesperson
Closers are one of a company’s most valuable assets, and it’s expensive to recruit and maintain a talented sales team. Salespeople should not be wasting their time and the company’s money doing their own prospecting.
Salespeople are overqualified for cold calling and either won’t do it or, honestly, won’t do it well. As closers, they tend to be too focused on pitching the product or service to recognize the persuasiveness of pitching a more modest ask—setting a sales appointment—while prospects are in the early awareness stage.
A key component of appointment setting is a professionally persistent call cadence, and determining a suitable time interval between touches can vary from prospect to prospect. Through working with thousands of clients, we have found that a call cadence beyond 3-4 touches is imperative for nurturing a lead.
Emphasizing our previous point, salespeople don’t have time to cold call, and they are reluctant to do it. To achieve the necessary cadence and qualify more leads, any growing B2B organization needs a dedicated and persistent appointment setting team.
3. Discovering a new approach
For companies in the startup phase, that are scaling their business, or looking to expand into new markets, appointment setting is a viable method of market validation. SDRs can be used to explore an offering in the market without the limitations and costs of a broad-sweep marketing effort.
If a company doesn’t currently have an appointment setting team, how do they know the right way to go about building one? Outsourcing appointment setting efforts is a flexible and cost-effective way to find out how an SDR team fits into a B2B sales structure.
Due to the steady increase in demand for sales development representatives in B2B software companies, the required years of experience to enter an SDR role has declined 45% since 2010. This is concerning for software companies, especially high-growth companies or ones with high ASPs who tend to require a more experienced SDR team.
Outsourcing through a reputable sales development agency provides knowledge, experience, and a proven process developed over many years. Using an outsourced appointment setting department allows you to leverage the expertise of a team who built their entire business around sales development and keeps you focused on what your company does best.
Interested in Appointment Setting? We wrote the Ultimate Guide to B2B Appointment Setting. Free for anyone who is ready to take Appointment Setting to the next level.