Why The Pay-for-Performance Model Doesn’t Work for Outsourced Sales

pay for performance in sales outsourcingMany people consider Outsourced Sales and marketing work come to me with some preconceived notions about what they would like to do.

One thing I hear over and over again is the desire to produce outsourced sales or marketing functions using a pay-for-performance model. While the intentions of using a pay-for-performance model are usually good, in practice, there are several reasons why it doesn’t work well for outsourced sales.

The first is in regards to the cost of resources. Let’s take cold callers for example; cold callers are an extremely expensive resource (especially if they are full-time). Cold callers can also require a lot of training before they can become effective.

If everyone is in agreement that cold callers are valuable resources, why would an outsourcer agree to invest in those resources without any guarantee of return on that investment? From a business perspective, it just doesn’t make sense.

Another reason why pay-for-performance does not work well for outsourced sales is that it puts the focus on short-term goals rather than long-term success.

For example, I often get asked if we will take compensation for each appointment set. From a sales reps perspective, this incentivizes the sales rep to ‘hit his number’ by setting as many appointments as possible, regardless of the quality of those appointments. Because, if the only performance metric being looked at is the number of appointments set, the rep has no motivation to put in the extra time and effort to only set meetings with quality prospects that he thinks will eventually close. With no reason to think past hitting his numbers for this week/month, a pay-for-performance sales rep is focused on his short-term goals, not your long-term success.

If you would like to know more about the value of outsourcing B2B sales, read Scale Your Business for Sales with B2B Sales Outsourcing. To learn how we price our sales and marketing outsourcing services, you can visit our services page and click on the different boxes for pricing details.

Feel free to contact us with any questions.

The “Self-Diagnosis Dilemma”

self diagnosis in sales outsourcing

I work the front end of our sales process, taking Inbound calls from interested companies looking for help with their sales. Inevitably, we see the same scenarios play out and the same issues come up over and over again. One issue that has come up a lot recently is what we call the “self-diagnosis dilemma.”

An executive or SVP of sales reaches out with the core problems of:

  • They need a bigger pipe
  • They need more leads
  • They need faster revenue traction

Often, what we see happen is when companies are looking for kind of outside help, they have some preconceived notions in their mind about what tactics will work. They will say something like, “I don’t need any content; I just need callers,” or “I just need you to set appointments.”

While it is great that people are trying to take some action to improve their sales efforts, self-diagnosing in this way does not always produce the best results.

For example, let’s say you have a runny nose and a cough and diagnosis yourself with a common cold, which you would normally treat with some over-the-counter medicine. However, when you go to your doctor, he tells you that you most definitely have whooping cough and need antibiotics—the over-the-counter stuff won’t cut it.

So, while symptoms may look the same on the surface—whether it be a runny nose or low conversion ratios—a qualified domain expert with years of experience servicing multiple customers successfully on a daily basis probably has a better understanding of what solution is most appropriate.

Experts are experts because they can see big picture ideas that others miss, and they are able to discover new solutions to difficult problems. And while it was somewhat easy to become a marketing expert 10 years ago, the sales and marketing landscape has changed dramatically with the proliferation of digital and is now much more complex on both a social and technological level.

So, if your company’s sales are struggling going at it alone, it would probably benefit you to be open to an expert’s advice before haphazardly concocting your own home-remedy.

If you would like to know more about the value of outsourcing B2B sales, read Scale Your Business for Sales with Sales Outsourcing. Feel free to contact us with any questions.