Does Sales Process Outsourcing (SPO) work? - Part I
28 March 2014, Posted by Shyam Sekar S
The business of selling, in much of the corporate world, is perceived as a function to which business targets (sales quotas in strict sales-speak!) are handed down, with the expectation that they will be achieved somehow. Sales was perceived as a profession that is invariably personality driven: it is very common for field sales representatives to be viewed as a flamboyant individual who uses the 'power look' to intimidate prospects, or uses 'closing techniques' to make the prospect sign on the dotted line. In short, sales was perceived as more of an art, rather than as a science.
Although service delivery capabilities and functional expertise is very critical to any business, without the right sales efforts, nothing gets achieved. It is a no-brainer that without sales there are no revenues and hence no growth. Sales, which is such is a critical function, is often not managed in the right perspective. Just pushing the target down the throat does not work anymore. As said before, it is more of an art and there are very few professionals in the industry today who not only understands the sales secrets, but who also able to manage their sales team far more effectively and build high impact enterprises.
Every organization cannot excel in their sales process. More often than not, start-ups, small and medium enterprises (SMEs) will observe that bringing in the right sales talent is one of the most common challenges they face. This challenge becomes more evident when the founders of such organizations come from a strong technology/operations/service delivery background.
With no in-house sales ‘expertise’, the question that comes to anyone’s mind will be – can the sales process be outsourced?
The answer to the question above is a 'Yes', as well as a 'No'!
To understand more about when Sales Process Outsourcing (SPO) can work, and when it cannot, we need to break down the general sales process into various phases, and relate each phase to the organisation's specific product, service or solution. The objective of this exercise will be to understand how amenable a particular phase will be to outsourcing. Depending on the nature of product or service, the complete sales process, or a few phases at the minimum, will lend itself to outsourcing.
Captured in the table below are the various phases of the sales process, and their amenability to outsourcing:
|Sales Process Phase
||Suitability for Outsourcing
||Factors to consider before outsourcing
|Lead generation through tele-calling
||A very common activity that is outsourced.
Can be streamlined significantly through the concept of 'ideal customer profile'
||Can be completely outsourced for products and also solutions having a relatively straightforward functionality
|Product Demonstration / Service pitch
||Where the solution being sold is complex, or lends itself to extensive customization to the prospect's business needs, this is best done by the organization itself.
If it is a product or services pitch this process can be outsourced.
||As it applies to the Product Demonstration phase;
If it is a product / simpler service, can be managed through readymade template that can customized for different prospects.
||As it applies to the Proposal phase
Maybe (with exceptions)
From the table above, it is evident that by and large, the first two phases of the sales process (Lead Generation and Lead Qualification) are amenable to Sales Process Outsourcing. The next three phases, namely, Product Demonstration, Proposal preparation, Negotiation/sales closure lend themselves to outsourcing only when the type of solution offers a relatively well defined functionality, with almost no scope for customization. Typically, such solutions can also be sold online as it can be targeted towards self use type.
While contemplating the outsourcing of the lead generation and/or lead qualification process, it is worthwhile to use the concept of the 'ideal customer profile'. The ideal customer, as the name implies, is a customer that an organisation would like to have in its client list. Even where the product or solution is complex, when the ideal customer profile is well defined, organizations can derive significant improvements in the productivity of their field sales force, since the outsourcing partner is broadly able to qualify leads that are fed into the sales pipeline. Field sales resources ultimately get to work on good quality leads when the ideal customer profile is well defined.
Sales process outsourcing will be a win-win scenario for both the outsourcing organisation and its outsourced partner, provided the ideal customer profile is well defined. Regardless of the product/solution/service focus of an outsourcing organisation, outsourcing their lead generation efforts, and after careful consideration of the complexities involved, other phases of their sales lifecycle will help them significantly improve the rate at which they win deals.
In Part 2 of this post, we will dwell upon a few scenarios where outsourcing various phases of the sales cycle will benefit an organisation.
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