Can Outsourcing Lead Generation Make Sense For Your Business?

There are innumerable companies, domestic and overseas, who promise to help your company generate more leads and appointments. For all the noise, it’s by no means a certain or cost-effective way to improve your sales or leadgen productivity. In fact, most companies have had little success in trying to outsource major lead generation activities. Also, Gartner recently published a report showing “Outsourcing costs more than in-house”, with a particularly important quote that “”If all you are trying to do is save money, you are not going to be successful.”

Here are the important angles to consider when and how outsourcing could work or not.

What Are The High- And Low-Value Activities Of Your Team?
Every team has high value activities (ex: qualification calls, demos) and low value activities (ex: data entry, researching contacts, gathering basic research). Unless you have an extremely good reason and can truly trust the partner, never outsource your high-value activities, only low-value activities.

Is Quality Or Quantity More Important?
Do you want a lot of early contacts and leads, or a small amount of high quality researched information? Different companies are set up to deliver either quality or quantity, and it’s unrealistic (or very expensive) to expect both from the same company. Furthermore, if you’re looking for high quality results, make sure you can trust the results of the vendor with practiecs such as: pilot the project, include extra quality-control processes, or maintain constant, close working contact. For many projects this kind of overhead will outweigh any benefits!

Do The Financials Make Sense?
If you buy leads from a company, but can’t measure revenue generated from those leads, how can you tell if it’s a profitable relationship? If you purchase appointments at $700 each, and it requires 10 appointments to close a new customer, are you really willing to pay an effective $7000 per customer? Actually, that might be cheap if your average selling price is, say, $700,000+, but what if it’s $70,000?

Are There Hidden Costs?
How much management time will overseeing the relationship require? Will you need backup resources or services in case the service doesn’t perform as expected? What about the investment in time and money (training time, travel, distraction from other projects) to make it successful?

How Complex Is The Program To Execute?
Really think through everything required to make outsourcing successful. How much training will the vendor require? How will you exchange data and results? How long will they work on it? When they return it in 4 weeks, what do you have to do to re-import the data into your sales system? How will you quality-check their results? How much cleaning or de-duplication will it require? What can you, and can’t you, measure?

Pilot It!
If you are determined to outsource something, ALWAYS do a pilot. Make the focus of the pilot to learn as much as you can about your project, rather than just a “go/no go” test:
* Are there process kinks we didn’t consider?
* Were we able to train the vendor’s people effectively?
* What was the vendor’s quality of service?
* Are the financial results reasonably within our estimates?
* What were the delivery timeframes?
* Can we measure results?
* Do we really want to proceed with a full scale project?

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