Disclaimer: your in-house sales team is expensive

In the realm of business operations, the in-house sales team stands as the cornerstone, embodying unmatched importance for a company. These individuals, often referred to as BDRs, SDRs, sales experts, or simply sales professionals, serve as the dynamic force behind revenue generation and client relationships.

However, a debate rages:

In-house or outsourcing: which strategy truly saves more on the bottom line?

Imagine two choices: growing your in-house sales teams or passing the job to external experts. But, many believe that outsourcing is expensive, creating doubts about this option. However, there's more to consider. Underneath the surface of this essential task, there's a complex network of hidden costs that could significantly impact a company's financial stability. Let's dive in and uncover these often-overlooked expenses that can turn your sales strategy into a financial challenge.

As we pull back the curtain on the true financial landscape of an in-house sales team, a series of hidden costs come into focus:

1. Cost of poor hiring decisions : Ineffective recruitment choices have a lasting impact, with each underperforming employee resulting in expenses of salaries, commissions, and team dynamics. As a reference, the average B2B Sales salary in the United States is?$49,154?as of July 25, 2023. (Why did we opt for the USA? Simply because the source was the freshest.??)
2. Employee benefits expenditure: Beneath the workforce's surface lies the financial commitment to employee benefits, averaging at $5,655 per employee, including health insurance, disability coverage, and more.
3. Investment in hiring processes: Bringing a new sales team member onboard incurs various expenses, estimated at $4,700 per seat, highlighting the financial commitment needed to attract the right talent.
4. Sales tools cost: Equipping team members with essential sales technology tools holds immense importance for sales teams. On average, companies invest $4,581 annually in about 5.8 sales tools, paying around $66 per tool per month. Essential tools include CRM, sales cadence tools, LinkedIn lincenses, and email engagement.
5. Training expenditure: Building a quality sales pipeline takes time in the modern B2B world. Value creation throughout the buyer journey is essential for hitting goals. Ongoing training, costing around?$1,252 per employee?is vital for sustained growth, covering trainers, tech, and external programs.
6. Sales Team Turnover Challenges: With a consistent 35% annual turnover in 2021 and 2022, sales personnel departures are expected to hit around one-third in the coming year. This surpasses the standard 10% employee churn rate, highlighting a costly divergence.
7. Hidden cost of reduced productivity: Given high sales turnover, ineffective hires matter. For instance, an average SDR who brings $100,000 yearly to a company means that a weaker one who brings $40,000 results in a $60,000 loss. This affects future years too – a missed first-year customer means less earnings later, even if the underperformer is gone.
8. Employee engagement and retention Initiatives: Establishing internal engagement programs requires time and resources. Low employee engagement costs businesses $5000 on average for new hires.
9. The cost of bad data for prospecting: Efficiently handling and analyzing data is crucial for modern sales strategies. In-house teams might lack the expertise needed for qualitative data sorting and analysis. Every year, poor data quality costs organizations an average of $12.9 million.?

With these individual costs in mind, let's calculate the cumulative financial impact of maintaining a single in-house salesperson:

Total Estimated Hidden Costs = $49,154 (Bad Hires) + $5,655 (Benefits) + $4,700 (Hiring) + $4,581 (Sales Tools) + $1,252 (Training) + $60,000 (Lost Productivity) + $5,000 (Employee Engagement Programs)

?? Annual estimation cost per sales guy: ≈ $130,762

To sum things up, we've learned that having an in-house sales team can actually cost a lot more than it seems, considering various hidden expenses. So, it's crucial for companies to take a close look at these costs before deciding how to allocate their resources.

When it comes to managing your own sales team, it's a smart idea to consider outsourcing. This doesn't just mean saving money, but also getting experts to help. For example, dealing with the challenge of finding new customers using accurate data is one area where experts can make a difference. And this is just one example of the many skills outsourcing can provide. The main goal is to give your sales strategy a big boost. So, outsourcing is about more than just spending less; it's a complete way for businesses to enhance their selling methods in the long run.