The Real Cost of a B2B Salespersonby Matthew Hudson
In the Spring of 2020, many organizations furloughed or dismissed all or some of their sellers. In the short-term this allowed them to quickly stabilize costs while protecting revenue. Months later, we have reconciled to the idea that the COVID-19 pandemic will be with us for an indefinite time and the health and business climate will remain fluid.
Now, as businesses settle in to the next normal, they must rebuild pipelines and prepare for a return to growth. But what is the best way to do that? Can re-hiring sellers be justified in the absence of pipeline? Is the financial risk of bringing sellers back into the organization too high when future pipeline and revenue remain as unpredictable as the pandemic itself? Full-service sales outsourcing can mitigate the financial risk and shorten time to build—or rebuild—pipeline and sales.
Sales outsourcing provides a flexible opportunity to assess, design, and quickly implement a go-to-market sales strategy in the current normal, while retaining the ability to quickly pivot should the environment change, as it inevitably will.
You can develop a strategy to optimize your sales expense and maximize your returns in this transitional environment by using high-value sales outsourcing, sometimes referred to as Business Process Outsourcing, or BPO.
Assessing the Costs
Is outsourcing a good financial move? A good place to start is by calculating the cost of a salesperson. Many leaders run a quick calculation of salary + bonus or commission + a percentage allocation of overhead and that’s their number. But is that the real cost?
Not finding a published answer to this question, MarketSource financial analysts set to work to figure it out. Using proprietary data based on years of experience in the human capital and sales outsourcing industry, they built a robust model that accounts for all the costs incurred in recruiting, onboarding, training, supporting, and managing a salesperson.
Using this true cost model, CFOs can understand the real cost of one salesperson and evaluate whether outsourcing may, in fact, be a wise financial move.
B2B Sales Rep Expense Model™
Other Items to Consider in Cost Comparison:
• Management time associated with interviewing, hiring, and training
• Lost revenue and opportunity cost of turnover
• Performance management including employee severance
• Employment and workers’ comp claims
• Risk mitigation by using outsourced service
• ROI—revenue targets for internal vs. outsourced
• Continuous improvement in sales process
• Time and cost in testing, adopting, and utilizing new technology
© MarketSource 2020 | Source: *DePaul Center of Sales Excellence Study
Hire or Outsource: The CFO’s Guide to Optimizing Sales Expense
Does it make sense to commit to an in-house sales team? Or does outsourcing offer time-to-revenue and reduced cost benefits? We’ll help you decide.
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Do you know how much revenue you’re leaving on the table for every month it takes you to hire a B2B sales rep? We do. And we’ll show you.