The demands on your telecom sales department change regularly. For instance, you may experience seasonal fluctuations in demand or need to reassign people according to the amount of activity in your sales funnel. Some of these fluctuations can be absorbed without changing the size of your sales team, but at a certain point it will become necessary to upsize or downsize the staff to match the workload.
It’s hard to respond quickly to changes in scale if you maintain an inside sales team. If you work with an outsourced sales partner, though, you can add and drop reps easily, month by month or quarter by quarter, which provides a much more cost-effective way of dealing with these fluctuations in demand.
The cost benefits of sales process scalability that result from working with a telecom sales partner can be approached from three different directions:
1. Production Per Sales Representative
The single most important metric that a telecom company should be looking at over time is production per rep. If your initial increase in headcount is matched with an increase in productivity, that’s a prime indicator that scaling is proving to be effective. And if you’re seeing production per rep continue to increase over time, you know that your partner is finding efficiencies in the sales process.
For instance, if you’ve gone from 15 reps to 30 reps, you may see that the production per rep has also increased, so that you’re getting more than twice the results at twice the number of reps. This gives you confidence that you can scale at the current cost per rep and get more production out of the relationship.
2. The Ratio Of Revenue To Expenditure
Another way to determine results involves comparing your outsourced sales team’s sales versus what you’re paying them. In a particular month you could be at an 8 to 1 ratio, or a 3 to 1 ratio, or a 37 to 1 ratio.
Note that this is independent of the number of reps being deployed: it’s a straight return on investment (ROI) calculation.
When doing ROI calculations, don’t forget to consider the other expenses that would be involved if you were handling sales in-house, especially training and other personnel costs. Your outsourced sales partner has significantly lower training costs than you do, which enables it to provide staffing at costs that might be as much as 5o% less than they would cost you.
3. The Administrative Cost Of Scaling
The main benefit of sales process scalability is the flexibility it offers; you can add and drop sales reps in response to changing conditions, whether the changes are planned or unplanned. This benefit only accrues if someone else is absorbing the administrative costs of those changes in staffing, however.
Perhaps you have a six-month period when 10 reps can handle your sales needs, but you want to go to 18 reps for the following six months. With an inside sales team, you’d need to recruit, hire and train those eight new employees – which could easily take up half, or more, of your six-month period. And if after that period you want to go back down to 10 reps, the cost (for unemployment insurance and other expenses) of dropping eight reps is huge if you’re doing it internally.
Changes in scale like this are wildly disruptive to your business if you handle them yourself, but they’re seamless if you let your outsourced sales partner handle them.
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