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Wednesday, 14 January 2015 00:00

Outsourcing B2B Telemarketing? - How to Calculate the ROI

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You've decided it's time to use the power of the human touch and connect one-on-one with your prospects and customers. You're ready to nurture and qualify leads more effectively and maximize the use of your sales team's time.

Ad Hoc Internal In-House Telemarketing Proves Ineffective

Perhaps you've previously done some informal telemarketing. You've asked a few administrative assistants to make calls on an as-needed basis. However, this option may not have worked for you because you were not able to put the correct systems, training, people and processes in place. It ended up being expensive, time-consuming and ineffective.

The Inside Sales vs. Outsourced Telemarketing Question

So, now you're making a choice between setting up an inside sales function or outsourcing the task to a professional B2B telemarketing organization. Intuitively, it may seem like it would cost less to tackle telemarketing tasks at your company. However, you want to see the numbers in black and white.

  • The Cost of Inside Sales

  • People may think that the most important factors to calculate into the cost of inside sales would be salaries, phone costs, and system costs.

    There is, however, more to consider. Inside sales people tend to have high turnover rates and, therefore, you need to factor in recruitment and training costs. In addition, you will need to hire a manager to oversee the agents’ work. You can assume that one manager to 10 agents would be an ideal ratio. Finally, you will need to dedicate space to the telemarketing activity which will need to be heated, cooled, cleaned and maintained.

    The chart below shows the costs associated with an inside sales department.

    In-house ISE

  • The Cost of Outsourced Telemarketing

  • Outsourced telemarketing comes for a flat fee of $6,250, very similar to the costs of inside sales.

  • What’s the Return?

  • Of course, you’re not just concerned about costs. To make a decision, you need to understand the return sales generated by each option.

  • Inside Sales Revenues

  • At this level of investment, the inside sales option generates approximately 950 calls a month that yield about eight sales appointments and 0.8 deals close. The average sales value is $87,000 and, thus, the monthly revenues of inside sales are $69,600, yielding an impressive return on investment (ROI) of 946%.

    In-house ISE2

  • Outsourced Telemarketing Revenues

  • Outsourced telemarketing, however, usually proves to be even more beneficial than inside sales for several reasons. Professional telemarketing agencies have years of experience selling to the discriminating B2B buyer. Also, because they have many clients, they can leverage best practices. Finally, they know how to hire the best agents, train them well and reassign them into different roles as necessary to avoid burnout.

    Because of these factors, outsourced telemarketing completes more calls per month (1,425) and arranges ten sales appointments. Since they are experts at lead qualification, sales people increase their conversion rate to 10%.

    Thus, this option, with slightly lower costs than inside sales and the ability to set more and higher quality appointments, is the clear winner with a ROI of 1292%.

    In-house ISE2

    Given the numbers, it seems like most B2B companies should choose the straightforward path of outsourcing their telemarketing rather than trying to reinvent the wheel and create an inside sales team from scratch.

Download your free white paper now and discover more about what’s driving these numbers. "Telemarketing Execution: In-House or Outsource."