Having a Sales/Business Development team to generate qualified leads is a proven method of generating predictable and sustainable revenue.

However, the cost of creating such a team can easily be miscalculated. When deciding whether to build an in-house team or outsource the function, it is important to consider the total cost of hiring, training, managing and hiring this team.

Next, we compare that of building an internal team with the cost of an outsourced team. The cost of each component required for an effective team of representatives is listed and explained.

• Sales Tools
• Additional Hiring Costs
• Salaries (Sales Manager)
• Sales Development Salaries
• Business Development Salaries

How does outsourcing offer cost-benefit?

• Recruitment and Training:

Attract the best talent It’s harder than ever. Building a recruiting pipeline is expensive and the interview process is time-consuming. Additionally, developing a highly effective and repeatable training program is resource-intensive.

These costs fall on the outsourced company, which systematized these processes as part of your core business, in order to minimize recruitment and onboarding costs. Digital Selling also uses its own established training program to develop highly qualified professionals and maximize results.

• Management:

Companies generally have two options for managing their business development team:

1. Hire an inside sales manager to provide ongoing support and maximize results for the business development team.
2. Using the (expensive) time of a Director or VP to freely manage staff between regular duties.

As an outsourcing company, Digital Selling is able to substantially decrease this cost by scaling with in-house sales managers who can manage multiple groups of projects.

• Employee costs:

Employment taxes, employee health benefits, payroll costs, work space, computers and phones are all expenses that an in-house team would need to add, but with outsourced companies it is built into the design.

• Sales tools and enablement CRM platforms, high-quality data services, prospecting aids, and sales aids are necessary tools for effective business development teams. They are easily scaled by third-party companies, and Digital Selling uses best-in-class for each component of the lead generation and qualification process.

THE TRUE COST of your SDR team

Benefits of SDR Outsourcing to Consider When Creating the SDR Role

💡 According to the article“How much does an employee cost?” by Joe Hadzima There are a handful of unforeseen costs that come with hiring an employee. He quotes Basic Salary, Recruitment Expenses, Taxes, Benefits, Space and Equipment as the main external factors to consider when hiring an employee. Each comes with its own challenges and associated costs to consider during your employee search.

The costs mentioned in this article are often overlooked, resulting in an erroneous assessment of value.

Below, we discuss expenses to consider when building a team of SDRs and how much you must expect to spend if you create the function internally.

Sales Representatives: Salary

One obvious cost of an SDR team that everyone recognizes – you have to pay your reps! And it’s not just base salary, but also on-target earnings (OTE). This value includes extra costs like your commissions, contest winnings, incentive programs… it can add up quickly, especially if you have a good reputation (which you want – it’s expensive to hire bad talent!).

Manager/Coordinator Salary:

Most of the time, companies have two options when it comes to managing their SDR team. They can:

1) Hire an Inside Sales Manager to provide ongoing support and maximize results for the SDR team, or

2) Use the (much more expensive) time of a VP or Director to manage the team in addition to their broad responsibilities.

Whether hired or promoted from within, hiring a manager is a necessary cost to maximize the success of your SDR team.

Human Resources:Hiring costs (~40% of salary):

Employment taxes, health benefits, payroll costs, workspace, computers, phones – these are difficult costs of an SDR team that are unavoidable when hiring.

Plus, attracting the right talent to your organization is no small cost. Recruitment expenses, along with the lengthy interview process, can be expensive. Considering that it is still necessary to train these new representatives means paying for a training program and taking time away from current employees to train new SDRs.

Sales tools:

Modern sales tools are packed with technology: CRM platforms, high-quality data services, outreach tools, sales intelligence technology… all are necessary expenses when building an SDR team.

If you want your reps to succeed, you need to give them the tools to do so.

Office costs: (space, hardware, supplies)

Space:

Renting office space is expensive, but it can be difficult to measure the impact an individual employee has on rent. Fortunately, shared office spaces can give us a better idea of ​​how much cost we can associate with a desk in a given location.

Hardware: 

For most companies, hardware costs are built into the internal hiring process, but as your company continues to grow, the need for cost-effective solutions becomes a necessity. Until laptops start growing on trees, this is something you’ll have to provide.

Supplies:

Finally, you have to deal with the increasing amount of office supplies your SDR requires. Besides the obvious – like a table and chair – they will use your notebooks, pens, paper towels, kitchen utensils, etc… and this can add up significantly over time.

All of these costs of an SDR team add up quickly. You can expect some clash between budgeted vs accomplished – especially when you may have initially budgeted X to build your team. Hidden expenses like workspace/equipment, manager salary, sales enablement tools, etc. actually increase that number.

Often you are choosing between spending real money (buying tools, equipment, hiring a manager) or the opportunity cost of existing resources – using current employees to train new hires, giving managers double duty.

Alternatively, a standard three sales rep program – Sales Development with Digital Selling costs below $ 36.000,00/year. Over 40% of the economy with immediate effect, organizations can reallocate funds to improve their products/solutions and catalyze growth. Cutting overhead costs (and the headaches that accompany them) through outsourcing can be a viable and healthy alternative.