Should I consider outsourcing my sales?
Okay - firstly, let’s deal with the elephant in the blog article. Yes, Silent Sales offer outsourced sales services but we’re going to be as objective as possible and straight off the bat acknowledge that outsourcing all or even part of your sales process isn’t for everyone.
So, rather than trying to deal with all aspects let’s purely concentrate on things from a financial perspective in this article - after all, notwithstanding zebras, there are fewer things more black and white than figures.
Recruitment & Basic Salary
Let’s face it, good sales people can be expensive. At the time of blogging Total Jobs research shows that the average salary of a Business Development Manager in the UK is around £42,500 and rising to well over £50,000 in some industries and locations.
So even with very conservative agency fees of 15%, taking that average salary would cost a company £6,375 in fees alone.
And if it is a Key Account Manager role you’re recruiting for then you can expect to pay in excess of £7,000.
Of course, there are also two more options here. The first is to do the recruitment in house and technically save those agency fees. Glassdoor suggest that the average cost of a DIY approach to recruitment will cost you around £3,000 but probably more worryingly, irrespective of the size of your company are the number of days it is likely to eat up in the process - 27 and a half of them.
The second option is to scrimp on the amount you pay your sales hires. But sales, like all other professions is a living example that if you pay peanuts, you get monkeys. And let’s be honest, a “sales monkey” is less enduring than the ones at your local zoo who fling unmentionable things at visitors. And they can damage your brand, reputation and business significantly (the sales monkeys - not the zoo residents).
We appreciate that this is a very simplistic way of looking at this but the sample sizes are significant and span across most industries so the summarised figures above are trustworthy and very believable. The Glassdoor link above goes into more details about “Cost Per Hire” formulas and a well informed recruitment professional will be able to tell you more about this than us.
The Silent Sales Alternative: Our team are already recruited. We’re tried, tested, trusted professionals with experience across many industries and across the globe. We assign our team members to suit your needs and this process can be done in closer to 27.5 minutes - not days - and there are no agency fees at all so you can spend that money on paying us to help you to sell more.
But what about the overall remuneration package?
Sales Commission & The Overall Package
Sales commissions vary hugely in the UK and are much less aggressive than in North America. But a decent estimated average is somewhere around 15% on top of annual salary, assuming targets are realistic and achieved. So using our £42,500 average salary you need to be prepared to pay out over £6,000 in commission payments. And of course, if you have an uncapped scheme then that could be a lot more. But this is a double-edged sword of course - if your commission scheme is designed correctly then the benefit to the company of paying commission will mean that you’ll gladly be signing off those payments as it means that your order book is filling nicely. It might also be the case that your sales staff also qualify for the company profit share/bonus scheme too.
As for all of the other things that are expected by sales staff, here is a breakdown of some of the annual costs to the business, which may depend on the type of role and industries you serve of course:-
Pension contributions
Company vehicle or travel allowance
Company phone / laptop / tablet
Healthcare plan
Perkbox or other employee benefits such as gym memberships or life assurance
The Silent Sales Alternative: We never work to 100% commission. We don’t believe in it. In our experience commission only based incentive schemes are a breeding ground for undesirable sales behaviours. Occasionally we work on a partial commission basis but generally speaking we work on an hourly basis which means you know from the off how much your outsourced sales function will cost so budgeting is straight forward and there is no need for complicated accruals for potential additional payments. Simple.
As for the cars, mobile phones, PCs, laptops, company bonuses, pension contributions etc - none of it applies. We work as a contractor so all of this is taken care of by us. More weight and cost off your shoulders.
Onboarding, Training & Coaching
Lets continue to be honest - sales people are at the more emotional end of the employee scale. The job can be stressful, more nuanced than it is often given credit for and a lot of resilience and soft skills are required. This also means that sales people tend to need strong managers who understand this and can be both a shoulder to cry on and be versed in very high levels of motivational management. In a nutshell this is time consuming - and if you have a manager or managers doing this then they too are an expensive resource.
Sales team onboarding (or “Ramp Time” if you’re a tw@t) is estimated to take around 12 weeks. And this is generally viewed as a cost to the business in that it is unlikely that your new hire will be a net contributor to your sales during those three months as they are learning the ropes. So using our magic £42,500 average salary number, that is another £10,625 you’ve now spent getting them anywhere near “up to speed”. In an ideal world, that is money well spent as they will hopefully stay with you for many years - but it is a risk and it is essentially an upfront cost. If they leave after six months then you’re not seeing a return on that investment.
Like any professional, sales people are unlikely to thrive if they’re not trained an coached regularly. Whilst this would be an ideal time to also mention Silent Sales Mentoring or Silent Sales Training we’re not going to do this as it would be blatant advertising of our service offering and that isn’t the point here (it is). But the point being that a level of investment in these areas is both expected and needed annually in order to develop, improve, motivate and retain sales staff. And it wouldn’t be unreasonable to estimate a annual cost to cover such time as at least £2,500.
The Silent Sales Alternative: In terms of onboarding this usually takes the form of one online session. Our team are so experienced that we take pride in being extremely low maintenance. Yes, there will be some things to iron out over the first few weeks but we’re so used to onboarding that we help with that process and ensure that we have what we need - and no more. We can stay out of office politics, being introduced to Steve in Accounts who we will never deal with and as we work remotely we don’t need to know where your fire exits are. We’re selling from day one - or day two at worst.
As for the training and coaching costs - all of our team are fully trained in Silent Sales methodology and before that have lots of experience and have been on many other training courses. And the team are in regular contact with Silent Sales Owner, Simon who ensures they are motivated and fully supported. And of course, with most of our clients we have periodic (some weekly) update calls/meetings so that issues, opportunities and continuous improvement is woven in to our process. All you’ll pay for is the time spent on any update calls which we can assure you do not amount to £2,500 pa.
The True Cost of a Sales Employee
Using our £42,500 salary and an annual commission above - when you start factoring in everything else it is likely that the actual cost of employing that person will be higher than £65,000 pa. And if you want an accurate number then you can play with some figures in this excellent online calculator from Accounting Services For Business.
As you’ll see, there are many other factors to include such as:-
Employers National Insurance
Software licenses
Mileage and other expenses
Admin overheads
Consumables
The Silent Sales Alternative: If you were to engage with Silent Sales on a project for £8,000 you’ll pay £8,000. In fact, if for some reason not quite as many hours were worked then you’d pay less. And when our team member is on holiday you don’t pay for that time. There are no additional costs
We’re hopeful that this article has helped you if you’re considering outsourcing even part of your sales process. At Silent Sales we can be involved from lead generation right through to closing opportunities and even account management - or anything in between. We work with our clients closely to understand where they’d like to pass us the baton and when and where they want it passing back - so that their clients get a seamless experience and we help them to sell better. Please feel free to book a free call with us to see if outsourcing your sales can help you to reach your goals.
