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Outsourcing Your SDR function is a Bad Idea

by Todd Berkowitz  |  July 18, 2017  |  Submit a Comment

Street signs Outsource Road versus In House Street ERM supply chain business decision

I’m probably going to take some heat for this statement. And I’m sure there are many examples for where the approach has been successful. But I will restate the view that I share with clients. If you are trying to sell into enterprises in North America, do not outsource the SDR function. Full stop.

Why shouldn’t you outsource the inbound qualification or the outbound appointment setting responsibilities, especially when it may not make financial sense to hire in-house? Because it generally doesn’t work very well, and even when it does, you may be providing a less than stellar impression to a prospect during the first direct interaction they have with you.

Look I know all of the benefits of outsourcing. It’s cheaper, the firms have people ready to start making calls right away and have access to data that you don’t have. But the drawbacks are significant. They include:

  • “Dumbing down” of messages to adhere to a simple script required by outside firms
  • Limited opportunities for ongoing and continuous enablement of SDRs and the ability to adjust based on what is (or isn’t) working
  • Misaligned incentives where the firms are paid for appointments regardless of whether they turn into opportunities
  • Lack of control around the specific experience being provided by the outsourced reps
  • Pressure from firms to expand outbound targets when they quickly exhaust the initial ones

I can add a lot more to the list including the fact that you can’t promote external SDRs to field or inside reps, a disconnected relationship between the outsourced SDR and the rest of your company and near impossibility to use them for ABM programs unless you have a massive number of accounts.

Yes, there are some scenarios where it may work. You have a more transactional sales process and/or are selling into a very mature market with a broad-based solution that appeals to a large population. Or you are selling into European companies that are typically more accepting of outside “telemarketing” reps. But these are the exceptions, not the rules. I count on one hand the number of North American clients that have reported success with outsourced SDRs and I have lost track of the number of clients that tried it and deemed it a failure.

The best option is to hire a young and inexperienced (and thus far less expensive) SDR, put them through rigorous training and then make a point of having product marketing (or someone acting in a product marketing capacity) take responsibility for ongoing enablement. If you don’t have the volume to focus that person entirely on inbound lead qualification, then have them do outbound prospecting as well. ¬†You can also task them with researching accounts and contacts as part of ABM effort or find other valuable uses. Done right, you will see a compelling and rapid return on your investment.

If you are a Gartner client, I’m happy to have a conversation around this topic. Or can you read some recent research we’ve published on making inbound and outbound SDRs more effective.

Category: sales-enablement  sdrs  

Tags: sdrs  

Todd Berkowitz
Research Vice President
3 years at Gartner
18 years IT Industry

Todd Berkowitz is a Research Vice President focusing on B2B technology marketing and sales. He advises product marketing leaders, CMOs and sales enablement leaders on how to improve the effectiveness of their demand generation, sales enablement, account-based marketing and upsell/cross-sell efforts. He also looks at how data, analytics, content and tools can improve marketing-sales alignment and overall effectiveness.. Read Full Bio

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