Why Outsourced SDRs Are a Path to Failure
To grow your company, you need sales. To get those sales, you need to build a team of sales development representatives (SDRs). Simple enough, right?
Not necessarily. Today, more and more companies are farming out their sales to SDR outsourcing companies that claim they can get massive results for a lower cost than an in-house team.
Don’t listen to them. If you are selling a technical product in a crowded space, you will fail if you outsource.
A dynamic team of in-house SDRs will win out over outsourced SDRs every time. I learned this firsthand while working in Silicon Valley, where I tried hedging my outbound model with outsourcing. It failed miserably. When I built a team in-house, on the other hand? I scaled a SaaS platform to $30 million in annual recurring revenue.
So, what aren’t the outsourcing evangelists telling you? Here are the truths I’ve learned while building countless successful sales organizations from the ground up.
What Is an Outsourced SDR Team?
Outsourced sales development representatives are typically positioned as lower-cost alternatives to building an in-house team. Instead of hiring SDRs directly, you would contract with a third-party company that hires and manages their own staff of SDRs. Those companies allocate their SDRs to different accounts based on client needs. That might mean the SDR is working exclusively on your account for a period of time or that they are juggling it with other clients—but ultimately, they report to the third-party company, not to you.
Why In-House SDRs Always Win
SDR outsourcing companies argue that their model leads to cost savings because businesses can quickly scale up and down based on their needs, rather than dealing with the costs of hiring and letting go of employees as their businesses expand and contract. However, those supposed savings are quickly canceled out if your sales suffer. In-house teams outperform outsourced SDRs for three primary reasons.
1 - In-House SDRs Build Stronger Relationships
When you essentially “rent” an outsourced SDR team, that team has no real insight into your company’s mission, vision, or values—no matter how many onboarding calls you might have. They aren’t in your team meetings, they don’t stand to gain from your company’s success, and they don’t see what makes its heartbeat. You also lose the opportunity to iterate, develop best practices, and learn from one another.
That insider knowledge and investment make all the difference when it comes to building relationships with prospects. The fact is that 85% of customers and prospects are dissatisfied with their experience talking to SDRs on the phone. That means it’s easy to stand out when you invest in relationship-building. The best SDRs build rapport and empathy with prospects by connecting over shared values and goals. They understand their product so deeply that they can immediately assess how it will help the prospect reach their own objectives. That level of connection can make or break prospecting efforts, especially when you’re competing in a crowded technical market.
2 - In-House SDRs Deliver Higher-Quality Prospects
Would you rather have one meeting with a high-quality prospect or ten with random companies who may or may not need your product?
It’s easy to answer that question—and it’s easy to see why in-house SDR teams are more successful. SDR outsourcing companies are usually looking at one primary metric: meetings on the books. That means they’re likely to keep throwing things at the wall to see what sticks rather than putting in the time to understand your sales cycle and what you need from an initial conversation. The result? No shows and meetings that don’t go anywhere.
In-house SDRs, on the other hand, stand to gain a lot more from putting in the legwork to identify solid leads and ensure their goals are aligned with your capabilities. That means that by the time you jump on a Zoom, the prospect you’re talking to is warm and ready for a productive conversation.
3 - In-House SDR Teams Are More Skilled
Think about it—if you were a talented salesperson, would you rather work for a middleman who farms you out to random accounts or invest your time and talent in a growing business you believe in?
The best SDRs understand that you can’t sell an organization unless you believe in it. They seek out compelling products, visionary leaders, and companies where they see a growth trajectory for themselves. And that belief and commitment matter. On average, it takes eight attempts to reach a cold prospect, but most salespeople give up after just two. SDRs who stick with it are the key to your sales success, and you won’t land them through a third-party contract. Developing them yourself, on the other hand, not only leads to stronger SDRs but also builds a pipeline within your organization for future account executives and sales leaders.
If there’s one rule of sales to remember, it’s that no one wants your product. They want a solution to their problem. The trick is convincing your prospect that your product is that solution.
In a crowded, technical market, that takes talent, as well as dedication to and knowledge of your company. You simply can’t outsource those traits. The cost of an SDR’s salary won’t make or break a tech company, and scrimping on your sales team by using outsourced SDRs can mean a huge hit to your profits.
When you build your own team of SDRs, on the other hand, you’ll reap the rewards: stronger relationships with prospects, higher-quality sales conversations, and a more talented team. Plus, you’re setting yourself up for growth by developing your own sales processes, methodology, and team structure. It’s an upfront investment that will pay dividends for many years to come.
Interested in learning more about how to build a top-performing in-house sales team? Let’s set up a time to talk about SalesLeap’s proven outbound sales process.