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Outsourcing the Sales Function

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Outsourcing the Sales Function

The Real Costs of Field Sales

Thomson South-Western,

15 min read
10 take-aways
Audio & text

What's inside?

Could you drop your in-house sales force and use outside reps? Here are some good reasons to ponder it. (Sorry, guys.)

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Editorial Rating

6

Qualities

  • Comprehensive
  • Well Structured

Recommendation

Outsourcing has become an accepted business practice because it can deliver demonstrable savings and improved services. However, while sales outsourcing is common, it has not been widely adopted by companies accustomed to having dedicated in-house sales staffs. Authors Erin Anderson and Bob Trinkle make a powerful case for the benefits of using outside sales reps, asserting that they cost less and sell more, particularly when they use the tactic of "portfolio selling." The authors explain how the two types of sales forces can co-exist and augment each other. Diehard sales managers will find interesting material here, though the book belabors a few obvious points and lacks enough real-world examples to juice up the dry text. The authors include a CD with software for analyzing sales costs. Since this is a very specific book for anyone investigating whether to use reps, getAbstract.com recommends it to sales directors and executives who are facing that question. However, front line salespeople and reps should just keep to their appointment books - this text is not designed for you.

Summary

Sales Staff or Reps?

For years, the leaders of large companies believed that a dedicated in-house sales staff was the key to taking products into customers’ offices and bringing in orders. Most companies never considered contracting with outside sales representatives ("reps"). In their viewpoint only small- or medium-sized companies with low sales volumes used reps. Common wisdom held that as smaller companies grew, that changed. Ordinarily, small firms would create in-house sales staffs when they reached the break-even point in costs between the two approaches (in-house versus a captive sales force). Forming an in-house sales staff denoted reaching a new level of corporate maturity.

The decision was influenced by a predominant idea that outside sales reps could handle only less complex products. Companies believed that outside reps lacked the skill or the presence to break into large global organizations. Today, some colleges still teach that reps are motivated by a short-term commission-driven mentality and lack the tenacity to complete complex sales. These preconceptions about sales reps are false.

Companies often maintain in-house dedicated sales forces because...

About the Authors

Erin Anderson, Ph.D., a member of the marketing faculty at the Wharton School for 12 years, is now a professor of International Management at INSEAD, the international business school in France. She directs the INSEAD/Wharton Alliance program for executives. She is the author of numerous articles and the co-author of a textbook on distribution channel management. Bob Trinkle worked as a manufacturer’s representative and an executive in the Electronic Representatives Association International (ERA). He often speaks to trade association groups and consults on field sales issues.

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