The Sales Engagement Podcast
The Sales Engagement Podcast

Episode · 2 years ago

Sales Development: How To Decide Whether You Need to Outsource or Hire an In House Team w/ Kevin Warner

ABOUT THIS EPISODE

Outsourcing your sales development isn’t necessarily a good fit for every organization. While it has the ability to save time and money for some, it simply doesn’t make sense for others.


Kevin Warner knows this. As the CEO and outbound sales leader at Leadium, he helps organizations engage in strategic sales development activities that bring you qualified leads. From strategy to execution, they provide full service support.

Welcome to the sales engagement podcast.This podcast is brought to you by outreach dot ioh, the leading sales engagementplatform helping companies, sellers and customer success engaged with buyers and customers in themodern sales era. Check out sales engagementcom for new episodes resources in the bookon sales engagement coming soon. Now let's get into today's episode. Hey everyone, welcome back to another episode of these sales engagement podcast. I'm your host, Joviing Allo, senior content managing editor at outreach, and today we arejoined by Kevin Warner, CEEO and Co founder of medium. You probably heardof them, and we're going to be diving into the great debate that isamong salespeople these days in house versus outsourced sales development, the pros, thecons, the ends, the outs, all the above. But before wegetting that, I'm going toss it on over to Kevin, who can introducehimself tell us a little bit more about medium and his background and what we'regoing to be talking about today. Kevin, nice to have you on the show. Thanks, Joe. Excited to be here. Thank you for thewarm welcome and yeah, just to jump right into it medium. We're reallyfocused on one thing and that's engaging in just strategic sales development activities to bringsales qualified leads to companies. So any lead generation, sales development, outboundsort of activities. We look to provide kind of full service from strategy toexecution, where one of the leading agencies we like to see in the market. We like to say agency because we're not just another outsource of vendor who'strying to do your payper performance lead or hey, I can source some datafor you. We actually try to boil down to a what are you tryingto do, what are you trying to accomplish as an organization, and thenwhat's the best route to get to that end goal? And then we alsolook to layer in the actual execution. For a lot of those businesses it'snot all together package into the one we can actually layer each individual item dependingon a company's needs. So we really look to become kind of a growthpartner in a way. I think it's a bad, fantastic and it's agood distinction to hit right off the bat. The the agency part right, you'rea you're a comprehensive kind of a partner. That the companies work with. That's exactly right and and we're really bullying down that agency mantra this year. And you know it's become very familiar on the marketing side, right onthe inbound marketing side, everyone's familiar with agencies. Outreach uses agencies probably allday for all sorts of activities, from producing this podcast or the unleashed event, whatever it might be, helping with design, helping with inbound strategy anddigital marketing strategies. On the outbound side there hasn't been a lot of attentionor focus or credit credibility it on that same service execution, feeling that sameservice need for an organization, and that's where really we're trying to kind offit in and say, Hey, there is a value add to the strategy, to the experience and to a more affordable kind of specialized expertise for alot of rules that you don't necessarily need employed on a daytoday basis. Ithink that's a good segue into the meat of the podcast today, the debatebetween in house and outsourced sales development. Full disclosure. Outreach uses inhouse team. We have a very large sales development team. That shouldn't be surprised,though, because we're like a very outbound heavy shop. We have a toolthat caters to those types of people. But would love to hear the prosand cons of both. You know, some solutions are going to work forsome companies, other solutions are going to work for other so let's hear thepros and cons from from the source here. Yeah, that's exactly right. There'spros and cons to everything and outsourcing isn't isn't necessarily a good fit forevery organization. We lead to boil it down to kind of three markets,enterprise, kind of mid market and then small and medium sized businesses. Outsourcingfor SMB's it is a shoe in every...

...time. I'm I've never come acrossthis situation where outsourcing sales development and lead generation isn't the good approach. MidMarket you're starting to follow more into what's going to be better long term forthe organization. And then enterprise. We don't necessarily play in on the outsourcesales development for enterprise. It's a hard game to win. Right. Weconsider outreach itself as more enterprise. You're just going after different funding goals orgrowth goals. A lot of stock put on investment by having head count,not necessarily that it's a valuable headcount, but there has to be head countassign so it's a different ball game. And we actually say, Hey,for those enterprise businesses, there's a better outsourcing solution, which is actually justdata ly generation. You know, you guys use some sort of database.We would argue that, you know, human researcher would add a lot ofvalue. But for outsourcing sales development, we focus on mid market at SMB'sand really there's buckets who can then fall into and why is outsourcing better forthese organizations? And in most instances it boils down to two things and that'stime and resources. And we can categorize now from employment costs, technology,the data, the strategy, ability to scale, ability to ramp, whateverit might be, all of those subcategories which will talk about here in asecond fall into two things, time and resources. Okay. Well, let'slook through the Lens of the the SMB small business. Okay, are breadand butter. Here you go, the as you would put a shoeing everytime, right, Jami, or why is it a shoe? In?Every time it's a shoe, and every time for the pure reason of timeand resources. So SMB's don't necessarily have salary, you know, the theability to pay salary to a large sales development team. Some smbs don't have, you know, funds to pay sales reps. it's still being driven byfounders there, cofounders, whatever it might be. They're kind of wearing severallayers of hats and one commonality every business has is they need more customers,more clients. All right, very few businesses today say hey, I'm good, I'm content and that's going to be, you know, not our market again, but most organizations have the commonplace that they want more customers. Nowit's a matter of how much can I afford? I can't afford necessarily tobring in a VP of sales. If I can't afford to bring it aVP of sales, I definitely can't afford an SDR whose whole job is justto create opportunities, because I can't even pay a closer. But one thingI do need is I need leads. And if you think about leads andthe sense of what are they, they can only come in from a fewchannels, and that's inbound and outbound are kind of the too primary and inboundis incredibly effective as well. You need content marketing, you need digital admoney. You know that's a that's a beast in itself. And within boundyou don't necessarily know who's coming in and when they're coming in and if they'requalified or unqualified. which leased outbound, which you're getting to choose who you'retargeting with what message, through what channel at what time. So I knowwho my ideal customers are, I'm going to go and knock on their doorinstead of waiting for them to come to my door. So why is that? Our bread and butter? Is because most of those organizations they need thatbusiness but they don't have the resources to go and get it themselves, northe kind of wherewithal to know even how to start that that programm or thatsystem, who to hire, who's qualified or not, and if you justthink about hiring the team member to execute on that goal, if you makea bad hiring move, it could cost you a year or a quarter ormultiple quarters. And then how are you going to rebound if your company's alreadystruggling to grow because you're not bringing in leads? Making one wrong move couldcost your business. You know it's longevity.

So I mean this is a thisis a big deal. Like, you can't just throw some money atan SDR and hope it's going to pay off. If that, you're puttingall your eggs in that one basket. Right, if you're a small business, you don't have the, as you said, resources to kind of testthis out. So outsourcing is probably the way to go. Now let's talkabout the things, the considerations that let's say you you are running a smb, the considerations you have to take into account when looking for an outsource agencyor something like that. One are some of the things they need to lookat. Yeah, before we jump into that, I think it's a goodanother point on why are outsource agencies good? To begin with, a just hiringan SCR to solve a problem. Well, the average scrs only withan organization for a year and a half and and it takes between three andfive months to ramp and SDR to where up their pipelines going to be.And you can only ramp an SCR if you have the internal infrastructure in orderto train them, in order to provide them all the technologies and the salestools in order to deliver on it. So before we talked about hey,how do I decide what's a good outsource vendor or not? It's important tosay hey, you can, you can do this yourself, but look atwhat's going to be in your way. Right hiring an SCR just to drivepipeline. It's going to be a long process just to get them to wheretheir pipeline starting to kick in. SCRS are typically the least qualified within thesales pipeline. Right these are young, usually younger people who want to becomeaccount executives don't have the sales experience. So they're going to be put onthe front line to kind of get that experience before they can grow into accountexecutives. So you can't just expect an SDR you hire to instantly know whatto do. They need that training and coaching. If you just take theSDR cost alone, if you are trying to do this inhouse, I thinkit's you know, the bridge group every year does really good and breaking downSCR cost but I think it costs an organization about a hundred and fortyzero dollarson average to have one SDR employed for a year. Why is it soexpensive? Because there's a lot of hitting costs that a lot of team memberswithin our organization and a lot of owners will overlook, and that's hey,you have salary, but then you have benefits. Then you have taxes,right, and taxes aren't cheap. Then you have technology costs. You gotto get them onto the CRM. You need to give them a program likeoutreach, right, and outreach has limitations on how you can sign up.An annual contracts are not so you need to give them all these resources,sales or linkedin. You need to provide them access into and those all havebuilt in costs. Then you need to pay for that training time. Youneed to pay for that down a ramp up time. So if you havean SCR on salary, you know that it takes three months to ramp anSCR. That means you're covering the costs of that SCR for three months.What happens then when your SCR leaves you after five months? You paid outa lot of money. Figure fifty thousand dollars by that point, and allcosts without any production because they left and went to a new job. Theywere stolen. So it can be really damaging to an organization and in orderto try to do that in house if you don't have that infrastructure built,which is why we say enterprises are often times a different beast, because enterpriseshave the infrastructure, they have the resources to bring in sales trainers and trainingprograms and people just to build training programs for scrs. They have a clearpathway for an SCR to become a AE, which might allow them to pay themless money up front because there's there's just a longer career path. Sobefore we say hey, you know what is a good way to break downwho to use? There is a real you know, worried that I liketo say if you are an owner or a VP of sales looking to doit in house. Is What happens if you get it wrong. Outside ofcosts, which are definite, you then have to pay for data. Whoare these people going to reach out to? You still have to find email addresses, you still have to find directiles.

If you go to a database likezoom info, discover or again not cheap, super expensive annual contracts andput limitations on the data you can receive. Outside of that, the biggest valueadd for outsourcing is the strategy component. What are we doing and how arewe going to do it? How do we leverage the technology and thedata to get us our greatest results as quick as possible? If you goin house, oftentimes you don't get any of that. You have to figureit out on the fly, which means you're going to spend more time andmore money and more resources to try and hope that you hired the right personto get you to that end goal. Going out sourced, you're able tocircumvent all of those barriers to driving pipeline, which that's all you want, isyou want leads and you want them as fast as possible. In House, it's going to be a long road, it might never pay off, youcould be huge investments and it can be incredibly disruptive to your company.Going out source you can circumvent at all. I feel like you've you've told thestory before. You paint a very upugalyptic picture of the dangers of buildingout an inhouse says d our team. So let's let's just right now agreethat the people listening that they want to outsource. Okay, there are something theer's some pitfalls of outsourcing as well, because you don't like you did saythat you are getting better strategy and people have done it before and theramptime decreases significantly, so the production happens right away. But you have topick the right one right. It's the same thing as hiring someone. You'restill vetting a candidate to help you with this process. So what are goingback to what I asked before. What are the considerations? What are thethings you need to look at? Yeah, your one biggest worry when you're outsourcingis, you know, the vendor, vendor reputation, vendorability to execute onwhat they're promising. And the biggest worry you have and the biggest roadblock that you have in front of you is it's a low barrier of entryand it's high margins. Low Barrier Ventry and high margins means you have alot of crap and the market place right and you probably get the emails.If you're a business owner and you have an SMV, you get the emailsright now, right, hey, we can source data for you, Hey, we can do leads for you. It's going to be the same processas if you wanted to hire internally. You need to put your vendor throughthat same process. Right. It's not going to be a two day close. You have to have the same kind of red flag indicators popping up asif you were doing interviews. Do Multiple rounds of interviews, talk to,you know, the past employees or clients. Ask to speak to multiple right it. Don't just speak with the first one that they present you, becauseif you've asked for references, most people are going to give you the bestone, and vender worry is the biggest issue. So you almost have touse your smell test right. That's going to be one of the best indicatorsfor you in the market. But it's not the best thing to say.But the smell test is obvious. leadium puts a lot of time and attentioninto passing the smell test. We produce a lot of content. We addfaces of every one of our outstores team members. We try to put onvideo and add pictures to the website so you know who your team is.Right you're you're inherently adopting a remote team. You want to know who they are. Most outsource businesses don't want you to know who they are because alot of them are then outsourcing, you know, out of the country aswell. These smell tests will be your biggest indicator. If they wrote toa cold email. The email sound a little fishy. It didn't sound likeit was that well put together. Does it seem like it has a goodorganization base here in the US or is it all overseas? Reputation is abig one and then strategy is a big one as well. And have themtalk to you about strategy on the phone a very quickly you're going to know. Is that vender just about the margins? If they're all about the margins,a clear indicator is going to be they put a young salesperson or commissiononly salesperson on that call with you just...

...with the goal of closing you forthree months or closing you to a sixmonth contract. Trying to get some strategyout of that call. Right. How would you approach it for me?How do you know about my market? Do you have any experience in thepharmaceutical market targeting, you know, large medical device companies, and how wouldyou approach it with us? How is that different than you approach it elsewhere? If the person you're talking to on those calls can't talk heavily to strategy, clear flag. Don't go with them, because outbound sales and outbound Lee generation. It is one hundred percent about the strategy. Everything else is verysimple. The strategy that they go with or that people use. That's whatit's all about. And before you mentioned data costs. Or are using zoomin forward discover org? Is that something that gets passed on to the companythat is outsourcing or or should that be covered by the the outsource company thatyou're purchasing? Yeah, it's a good question. I always say if you'reoutsourcingly generation and sales development and they use a database, don't go with thatvendor. That's my argument with it. So, okay, at medium wedon't do any database Lee generation because again, you could just take that contract anddo it yourself. I'm just trying to play a heavy margins game andthe best interest isn't for my end client. If you're outsourcing, it's to me. I want to make sure that we're doing everything by hand so thatwe can produce and we can control every variable that's going to go into youroutbound program so at leadium we employ over a hundred researchers right and we handgenerate every lead for you that you're targeting specific to your ideal customer profile.So for us, before we can begin working with you, before you eversign a contract with with us, we lock in who are you even goingafter, because we want to be comfortable a we can source the data andthen be that we can actually get you the conversion rate that you're expecting toget from an outbound program so by defining that ideal customer profile, we thenhave a research team in the back end who become dedicated to your account.We actually assigned researchers to your account who, all day, every day, allthey do is look to source data, and data today is readily available,right and if I go to Linkedin, I can find it's the best database. The problem is it doesn't have contact information, but I can findwho the decision maker is within the specific companies I'm going after. Within tentries you can typically find their email address, right. You can just guess.Mine might be first named, period, last name. What did? Youcan go through ten variations get to that email address, run that throughmultiple email validation systems, and then not just one, you have to domultiple just in case they're varying systems, and then boom, you have avalid contact information. Then what additional data do you need? Do you needfacebook followers, you need linkedin followers, whatever it might be? By onlyusing what databases have a you're stuck to whatever that database has, right.So what happens if I'm targeting ideal customers who don't exist in that database?Are you, as an outsource of vendor, then limited, right, or canyou go beyond that? Well, if you don't have any channel togo beyond that, now you know that your outsource of vendor is putting limitationsinto what they can actually deliver for you, and those limitations are on other vendors. There's also a worry about what market are you going after? Alot of SMB's aren't going after CMOS of fortune five hundreds. Right outreach,for example, is going after VP's of sales and sales development leads at largeenterprise businesses. A lot of times that date is cheap and easy. Anynumber of databases can get it for you. But what happens when you guys aregoing after restaurant owners? Right, single location and restaurant owners? Whathappens when you're going after HBAC owner owners? What about long you know long carehigh schools. What happens if you're...

...going after high schools, what aboutCatholic high schools and Christian high schools, which one of our clients goes after? There's no database, with no Catholic high schools. How do you thenfind out who the principle is? So you have to have a system inwhere, hey, we're really good. Our backbone is actually the data sourcingand then applying a strategy on top of that. So I would say ifyou are using a database, another red flag indicator, because you're just repackagingeverybody else, putting, you know, a nice little let's stick on itand saying, Hey, look, pay us now x amount and we're goingto take high margins, whereas if we're giving you a human researcher and aresearch team who work every day doing exactly what you want, then you havea lot of power. Still as our client, you can come to usand say, Hey, you guys are off a little bit right. Iwant to start finding Catholic high schools who have over three hundred students. Okay, let's go back and let's refine what that researcher is doing. There areno necessary limitations because we're doing all open source, and I think that thatis something that would set a outsource agency apart from the rest that human verification. I used to work for a sales data provider in the space and Ican't tell you how many times we would get calls me like I need toknow all of the mechanics in Flint, Michigan, and we're like cool,let us know when you find out, because that's we can get them ayeah, that's incredible, but but it also does to say that that separatemarkets. Right. When is outsourcing good for separate markets? And we said, Hey, maybe appointment sending outsource sales development not good for enterprise businesses,but really good for mid market and SMB's. On the data side and the waywe set up the data side as an outsource vendor, we actually that'swhere enterprises are knocking on our door because the question becomes, Hey, wehave two million records in our sales for us over the past ten years.However, none of them are accurate. And, by the way, we'vealso changed how we capitalized industry and there's no technology that can just go inone by one and change how we redefine how we you know, tag leadsor contacts by industry. We need somebody to go one by one who understandsa the data technology and then be can actually validate and enrich these databases inreal time. So let's quickly play devil's advocate here. I am a salesleader and I am thinking about building out an in house s Dr Team,but obviously there's a very attractive offer on this side to outsource it. Idon't want to relinquish control. What is your response to that? It's that'sthat's the one thing I need. Don't beat make sure these people are infront of me. I need to watch them. You need to make surethey're on top of the thing and pound in the phone and send any ofus. Yes, and we've been confronted by this a we've been we've lostcustomers over sales development reps thinking we were producing too well, that they mightlose their jobs. So they have to control it all in house because wewere out competing with their internal team. And then, as a sales developmentrep, you don't look good at all. Or leader, you don't look goodat all if you have the resources to start putting together sales development team. Our response is always don't choose one or the other. We are incrediblyaffordable and we are full service. Full service meaning we package data, wepackage the technology. We're outreach partner, so every one of our clients getsan outreach seat. So you're using the best of the best technology for outboundand you don't have to take on the contract for outreach. will do itfor you. So we packaged data, that's technology. The execution team,we're actually providing you an SCR to manage the day to day. We're probablywriting you a strategist to break down who are you targeting? Why? Howdo we develop messaging? And we also have an inhouse content team. Allof this for an incredibly affordable rate, starting at thirty five hundred dollars allin it. That's about half of an SDR cost if you're going entry level. But by the way, that includes all technology and data, so youdon't even need about thinking about something else.

But if you have the resources andyou're looking to do it internally, is it as a team, wesay bring us on as well. Right, we're super cheap, we're super fullaffordable. We can make a great argument bring us on at the sametime. And if your goal is to have it running in house and youdon't want to use any vendor a. You should start with us because you'regoing to learn a ton of the strategy side things that you will not willbe able to ramp your team that that experience and that training and how dowe do it and what do we do? Will be able to ramp it.But while you're ramping your internal team, we can start your pipeline today.We can have outbound launched incredibly strategically within ten days, and so you'restarting to get an inbound pipeline as you ramp your team. Are Contracts aresuper short. Three months. How long does it take to ramp an SDRthree months. So why not at least bring us on now? If wemake a use case that we're driving Roy, meaning we're setting more appointments, thatare closing into deals, then then what our cost is. Then whywould you ever shut us off, even if you have an internal team runus together, because we're making you more money. Within that three months wemade you more money than what it took to costs. The second problem iswhat happens if two of your strs quit within two months because you guys didn'tknow what you were doing. There was a lot of chaos. There wasn'ta lot of direction. If you're only relying on your internal pipeline, you'llimmediately have a dip in your productivity, which means your revenue projections are goingto drop as well, because you're projecting revenue based on the endown and pipelinethat's coming in, whereas we can come in at stabilize it. And that'sactually what a lot of mid market and enterprise companies have actually engaged us for. Is Hey, we have an internal team. We just want to alwayson solution so that if three people leave from our group of Steven we don'thave a huge drop in numbers. We can actually just put more top offunnel leads into the program you guys are running to make up for that exitof those employees while we ramp new employees back up. So my quick takeis don't choose one or the other. If you're building a team internally andthat's what you want to do, do us side by side. And Iknow I'm talking for a long time with hey. That's one of the podcast. Yeah, one of the biggest benefits of outsourcing to a good vendor likemedium is just strategy. Yeah, Self Plug Selflog is the strategy component.We live and breathe outbound and there's one single advantage we get as an outsourcecompany that allows us to speak to the industry more so than if you wereto go higher a VP of sales development or lead sales development or in SCRand that's over the last few years we've worked with hundreds of businesses over fiftydifferent industries, varying sizes, products, target markets, whatever it might be. We are one of the handful of companies who can say that's a badapproach, that's a bad strategy, that that's not going to get many opens. Hey, you have a deliverability problem. Here's how, here's the fastest wayyou can fix it. Hey, are you even planning for deliverability?Is everybody just emailing everybody? Hey, that's bad content. That email willnever work. You're repositioning, you're using the wrong variables. Because we workacross so many different industries and markets, we've built the knowledge base. Soeven working signed by side your internal team, we can say, Hey, letus coach you on actually how to do this the right way as quickas possible, and I think that's a good mic drop moment right there.I was going to ask you for a takeaways, but I think you hitall the takeaways right there at the end. They're done. That's the time ortwo I think. Yeah, yeah, that. If people want to learnmore about Lidium, I don't know why you would, because I thinkyou've learned everything here. But if people wanted to conduct you learn more aboutLidium, maybe pick your brain a little more. How can they do that? Yeah, my email. You can...

...always email. It's Kevin at LidiumDon ioh. You can always go to Lidium Don ioh learn about how weapproach sales development, outbound sales and lead generation. We have, of course, our own podcast, the outbound sale podcastcom you can go to the outboundsale blog, which is just all content for sales development reps or any ownerlooking to engage and outbound sales and a strategic way. Just go to LidiumDon ioh and it's pretty much a treasure trove. When we can talk aboutthe smell test, if you go to one company versus the next and justgo to their website, you can see who passes the smell test by wholives and breeze outbound sales every day, and that's right Kevin, I encourageeveryone to go check out lidium. I encourage everyone to check out your newpodcast. I want to thank everyone for listening today, and especially Kevin meon the show and we will see you next time on the sales engagement podcast. This was another episode of the sales engagement podcast. Join US at salesengagementcom for new episodes, resources and the book on sales engagement coming soon.To get the most out of your sales engagement strategy, make sure to checkout outreach die ioh, the leading sales engagement platform. See you on thenext episode.

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