Outsourcing Demand Generation: Pros and Cons

Outsourcing Demand Generation: Pros and Cons

In my last blog post, I discussed how B2B companies can accelerate revenue growth by segmenting their sales model into separate workloads (i.e., demand generation, closing business and account management). Since experienced, senior sales people are driven by closing business, removing demand generation and account management responsibilities from them can dramatically increase both their effectiveness (results) and efficiency (speed). Keeping the company’s best – and most expensive – sellers selling is the ultimate goal!

Most B2B companies staff the closing business and account management workloads with experienced FTEs. However, many are outsourcing the demand generation workload and other task-oriented projects to firms like Invenio, SEI and Televerde. These firms can increase a company’s sales performance and revenue growth by doing the work senior sellers do not want to do – account profiling, appointment setting, event management, lead generation, lead qualification, etc. Since these firms specialize in these areas, it can be win-win.

Advantages of Outsourcing Demand Generation

  • Cost – Reduce the fully burdened cost of hiring new employees by one to three times.
  • Effectiveness – Keep your best sellers focused on high-value activities and generating revenue.
  • Expertise – Benefit from functional expertise and industry knowledge from day one.
  • Flexibility – Increase or decrease employee headcount based on the demands of the business.
  • Speed – Rapidly build-out sales processes and teams to go-to-market faster than the competition.

Disadvantages of Outsourcing Demand Generation

  • Coaching – Companies often cannot directly coach or develop vendor employees for legal reasons.
  • Experience – Customers can be turned-off by vendors calling them “on behalf” of a company.
  • Management – People and process are managed by the vendor where knowledge, skill and talent can vary.
  • Quality – Results can be below company standards without clear expectations and consistent inspection.
  • Talent – Employees are interviewed and hired by the vendor allowing for minimal input into the process.

Outsourcing the demand generation workload is successful when the company and outsourcing firm are partners versus a client and provider. This means that the company is clear about its expectations and outcomes and is willing to invest (people and resources) in the vendor’s success. It also means that the vendor remains flexible and open to change while priding itself on total accountability and full transparency. A client is told the good, but not the bad. A partner is told both the good and the bad and together work is done to move the business forward.

All contents copyright © 2012, Josh Lowry. All rights reserved.

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