Sales Outsourcing or Rolodex Sales Rep

by Glen Springer | Dec 12, 2011

Why should you choose our sales outsourcing services over Rolodex?

This blog discusses the pros and cons of using a sales outsourcing organization like Gabriel Sales vs.  hiring a Rolodex Rep specifically for new product or service launches.

Gabriel Sales is an organization to work with when outsourcing sales. In short, what we do is  build sales engines.   Those sales engines are usually for new product launches and new service launches but we also work with companies looking to turn around under performing sales teams, improve effectiveness of cold callers or anything else you can think of that has the end goal of generating sustainable revenue through a solid sales process.  Because we are not a rep company, when we take on clients launching a new product, we are required to wear many hats – sales consultants, marketing consultants, lead gen rep, inside sales rep, closer, sales manager and market research (so we can accurately forecast and create an aligned sales content strategy).

One question that comes up frequently when discussing a new product or service launch is: “Should I hire a Rolodex Rep or hire Gabriel Sales?” There is no clean answer to that question because it depends on:

• Short term and long term strategic needs
• Short term and long term revenue goals
• Competitors
• Maturity of the market
• Maturity of the solution

We can make recommendations once we understand all the specifics with relation to the bullets above but here are some general thoughts (based on experience) for boards and executives to consider when evaluating Rolodex vs. Sales and Marketing Outsourcing.

Pros of hiring a Rolodex Rep

• Rolodex Sales Reps have established relationships.
• They can generally get you in front of a handful of decision makers quickly- By quickly we mean they should be able to spend 2-4 weeks reaching out to their network and another 2-4 weeks doing the first round of meetings.  So within two months you should have 6-10 meetings completed and if the product or service is the right fit you can get some quick deals in the pipe depending on the sales cycle.
• If it works you are a hero.  If it does not work you are no further along than when you started and you will have lost two quarters (1 quarter waiting for that rep to produce and another putting another solution in place).
• If it does work you can show investors traction but not scale.

Cons of hiring a Rolodex Rep

• The ability of a Rolodex Rep to penetrate the market is limited. Studies have shown that the average Rolodex Rep can maintain 7-20 really strong relationships with senior buyers and another 15-30 plus friendly relationships.  If you have a finite market this could be a great solution.
• In most cases you have no visibility into what a Rolodex rep is doing for you until they actually produce something.
• It has been our experience that Rolodex Reps with valuable relationships (20 strong relationships with senior buyers and 30 plus friendlies) are not cheap.
• An experienced Rolodex Rep with genuine value in their network are often reluctant to take on a product until its proven unless you are willing to give them an exclusive for a period of time.
• Rolodex reps rarely sell using a script (process in not necessarily repeatable and sometimes does little to convince investors you can scale) and do not provide and significant sales ratios for future pipe forecasting.
• If it does not work you are no further along than when you started and you will have lost two quarters (3 months waiting for that rep to produce and another 3 months implementing the next solution).

Summary of hiring a Rolodex Rep

When a Rolodex produces it’s a huge win! Hiring a Rolodex Rep is generally high risk and high reward.   Gabriel Sales is often brought into an organization after this approach has been attempted unsuccessfully.   We are also often brought in simultaneously to start the lead generation engine so when the Rolodex Rep’s pipe runs dry we are filling it to sustain the sales momentum.

Pros of hiring an Outsourced Sales Company (like Gabriel Sales)

• Outsourcing Sales Companies sell using a repeatable sales process.   They generally get on the phone to start filling the pipe leveraging a scripted and repeatable sales process.
• Outsourced Sales Organizations staff blended teams so you get the advantage of being able to hit 1000’s of decision makers with their dedicated telemarketing staff,  leverage direct marketing campaigns and still have senior inside reps and part time enterprise reps to close business.
• Unlike a Rolodex Rep, Outsourced Sales Companies are collecting critical market data for long term strategy and growth, creating a sales content strategy (and in our case producing digital sales content ).
• When Outsourcing Sales and Marketing you don’t have to deal with all the database  management and acquisition work.  You get the advantages of a dedicated sales team without the 100K-200K of technology and support team investments required if you were to build your own technology stack. In addition you get rid of some of the fixed costs you would incur by hiring a Senior Sales Executive and Senior Strategist to frame your own engine. The savings is usually in the 100K -150K+ range.
• With an Outsourced Sales and Outsourced Marketing Organization you get accountability, market intelligence and transparency on a weekly basis.
• You get into the market fast and you get infinitely smarter faster.
• Unlike a Rolodex Rep with a Sales and Marketing Outsourcing Company your sales momentum is just starting to build heading into months 3 and 4 which is generally when a Rolodex rep is starting to run out of steam.

Cons of Outsourcing vs. a Rolodex Rep

• The same principle applies here as with a seasoned Rolodex Rep: The better the Sales Outsourcing Organization, the more expensive they can become. (On the plus side neither comes close to the sunk cost of building and managing your own team).
• These organizations can get you into the market much faster than you could get there on your own but it will still take a little time to customize your sales machine and build a process that is both sustainable and repeatable.

Overall Summary

The best solution if you can afford it is to hire both.  However in this market you are better off walking away with something if you can’t afford to risk walking away with nothing.  Good Rolodex guys are not cheap and you don’t know if you are getting anything back on your investment unless guarantees are made up front.  With an Outsourced Sales Organization you are guaranteed call volumes, weekly reports to help you shape future metrics,  market intelligence,  a sales pipe with multiple stage deals that you can at a very minimum if the product you are taking to market does not quite hit the mark.

At the end of the day everyone is looking for the fastest cheapest way to fix their problem. While you might be able to get something in the short term from a Rolodex Rep you will not get anything for the long term. Building a sales engine is like building house and you have to do it the right way, build a strong foundation and lay the groundwork for success, or you will end up dealing with repairs on a consistent basis and wishing you had invested that extra effort up front.

For more background on the type of consulting you can expect and to understand some of the additional options you have we invite you to check out our blog post on Sales Consulting vs. Sales Outsourcing.   If you are looking to drive sales faster while building a sustained foundation for a high velocity sales machine we invite you to contact us for a free consultation to see what we can do to help.