How to Determine the ROI of Outsourced Business Development
Posted on January 17, 2018 at 5:39 pm
Outsourcing certain types of work can be very valuable for a company, but many businesses are hesitant to take this step. Some may have tried in the past and found that it didn’t work, while others are uncertain if they will see a positive return on their investment.
Outsourcing to the experts can be a great business decision, but a major budget item like outsourced business development requires a solid plan.
Going in with specific goals – and ways of measuring progress towards those goals – will help your business move forward, spend wisely, and know what to look for when hiring a business development partner.
Even when your company has plenty of business opportunities, outsourcing can be the most effective way to keep your sales pipeline moving.
A common issue with internal staff is effectively qualifying opportunities when resources are stretched or focused on competing interests.
An account executive might be in the middle of an important sales cycle when a new opportunity arises. His or her attention must be focused on the lead that is approaching a close, and by the time they can turn back to the new opportunity it has become stale or picked up by the competition.
Even staff hired specifically for jobs like cold calling tend to end up doing other tasks within the department. In short, the overall structure is not set up to handle all of the potential leads. Consistency is lacking, and opportunities are lost.
How To Make Outsourced Business Development Successful
In many cases, previous attempts at outsourcing proved unsuccessful because of a poor fit between companies or because there was no plan to evaluate performance.
Figuring out how you’re going to measure success is essential to finding an outsourced firm that will meet your needs. Is it by the number of qualified leads you receive? Your total profits?
Find a partner who understands exactly what you’re trying to accomplish and work with them to create a comprehensive, detailed plan to measure outcomes.
At the same time, consider whether or not your previous measurements have been useful and accurate. You may need to redefine how you determine success before you even start talking to another company.
Are you considering outsourcing your business development efforts? Learn more about our outsourcing capabilities.
Here are some good questions to ask when you’re trying to determine your success:
- What is the time frame we’re willing to invest in outsourcing? Most outsourcing companies can’t bring you profits overnight. If you’re looking for short-term profits, this isn’t the best way to go. On the other hand, if you can accept a long-term investment, how long can that be?
- At what point do we need to break even on our investment (12, 18, 36 months)? Obviously, breaking even sooner is better – but when does that actually need to happen?
- How high does the return have to be to make it a success? After breaking even, what numbers are you looking for? What benchmarks must be reached to continue outsourcing?
- How closely do we want to work with an outsourced partner? Some companies want to be hands-on throughout the process, while others are happy to check in periodically to review numbers.
Ultimately, an outsourced firm should act as an extension of your sales team, making connections and delivering qualified, actionable opportunities.
If you want to determine the ROI of your outsourced business development, it’s imperative to set up measures of success so you determine the right fit.
The last thing you want to do is work with a firm that has a different idea of what success is. Instead, make sure you’re on the same page from the very beginning.