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As a founder of an angel or venture-backed company, the metric that matters is hitting a certain level of revenue. After raising seed funding the clock starts ticking, and there’s usually a 12-18 month window to figure out a customer acquisition channel that will achieve the financial milestones needed to raise further funds. This can be overwhelming and there are a lot of decisions to be made: Where is your bandwidth best placed? How do you achieve growth? Which channels will work for you?
By not making a decision, you’re essentially making a decision that runs contrary to growing a successful business. So, the question you need to ask yourself as a founder is, how do you deliver on projected cash flow? One of the key judgment calls to make is whether your company should outsource business-to-business (B2B) lead generation or do it in-house.
Pretty much every business owner has been burned by a bad consultant in their career. If that’s happened to you, it’s bound to have made you nervous. There’s also the issue of trust: Does your prospective vendor actually know what they’re doing? Every vendor can talk the talk, but do they have a proven track record and case studies to back up their claims of market expertise?
For the past few years, I’ve been lucky enough to run a company that has generated thousands of leads through outbound sales development. If you are considering the option of outsourced lead generation, I would like to share my top tips for what to look for in a vendor. Ask the following questions to determine whether a vendor can grow your sales:
What are their credentials?
Do they have expertise in your specific market, and can they prove it with case studies? Find out what kind of value the vendor regularly adds for their customers, and what they offer beyond deploying and managing campaigns.
What will your relationship look like?
What will success look like, and how many leads should you expect to see each week/month/quarter? Find out what your relationship will look like after 90 days and how much of a time commitment the vendor would need from you to make the partnership work.
Are the vendor’s representatives internal or outsourced?
Ask if you’ll have a dedicated rep working on your campaign or if each rep represents multiple offerings. Unsurprisingly, a representative context switching between multiple different offerings will kill performance. Find out how they screen, recruit and train their team, too. Your representative has the power to make or break your outbound campaign’s return on investment, so ask for an introduction to your potential contact before you make your decision.
What’s in their toolkit?
Which outbound solutions do they utilize to contact potential leads? Will it solely be phone calls, or does the vendor offer multichannel solutions? Ask them to talk you through the tech that they rely on. For example, do they use a predictive or power dialer?
What are the benefits and drawbacks of outsourced lead gen?
There are a series of objective benefits and drawbacks that business owners should also consider when deciding whether outsourced lead generation is right for their company. Let’s start with the benefits.
• They have experience and expertise.
Finding junior reps who know how to build a list and have the required speaking and writing skills is tough, and if your internal hire has a low lead efficiency score you’re going to burn through your target market quickly with minimal sales generation. Outsourcing can reduce ramp time and achieve a scalable lead efficiency, making your growth goals more obtainable.
• Outsourcing saves time and increases efficiency.
Outsourcing will save time on prospecting, so if you have an internal sales team, they can focus on working their pipeline opportunities and closing more business. The actual internal recruitment process is also inefficient in terms of time and money. You’re being kept from growing your business while interviewing for full-time employees.
• It expands your marketing horizons.
A lot of work goes into building a list and the process is iterative. As the founder of a startup, you’ll find that your customer profiles change regularly, and new segments will likely become available as you scale. An experienced vendor will understand the unique parameters of each individual profile and how to leverage channels to achieve maximum gains.
Here are two important drawbacks to consider as well:
• Your vendor may not act as a true partner.
Handing lead generation over to an external vendor can be a high-stakes decision. Although every external service provider will promise to act as a real partner, that might not always end up being the case. I encountered this firsthand when running growth for a couple of venture capital-backed companies. Some firms rely heavily on automated solutions and even shy away from weekly collaborations. Be certain the company in question is truly committed to working alongside you. Ask them to outline how you’ll work together.
• Some vendors may not care about your business.
Do your research and find a team that’s passionate about being an ambassador for your brand. They should have some insights into targeting your company’s ideal customer profile right off the bat. Be wary of companies that don’t add this type of value, even before the deal closes.
Is outsourcing lead generation right for me?
As with everything business related, the decision is a personal one that requires a lot of consideration. If you choose the option of an outsourced vendor, you then have a couple of choices for scaling your outbound lead generation once your campaigns are up and running:
1. Layer an internally hired rep on top of the outsourced lead vendor and benchmark them against each other to see who drives more qualified leads.
2. Double down with your outsourced lead generation vendor so you can target double the amount of leads.
Be sure to do your research into how external lead generation companies can support your business, and always choose an experienced vendor that has a proven track record of increasing leads and sales.
January 7, 2019 at 09:32AM
Forbes – Entrepreneurs