The Long-Term Risks of Insourcing Your Inside Sales

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If you’re considering insourcing your inside sales to save money, you may want to think twice. Why? Because any short-term gains could cost you more in the long run.

We’re all familiar with outsourcing — the practice of hiring an established third-party workforce to perform specific tasks on the company’s behalf. Many B2B companies have outsourced their inside sales. In the past, the only competition in the industry has been from other firms and agencies providing similar services.

COVID-19, however, changed that. And according to McKinsey, COVID-19 “changed B2B sales forever.”

Faced with a pandemic in early 2019, companies struggled to find a way to remain in business without putting customers and employees at risk. In some parts of the world, lockdowns were mandatory, so people had to work remotely and virtually or not at all.

Overnight, field reps were forced to join the ranks of inside sales teams that were just coming into their own. Because tele-services firms already offered virtual sales services working remotely, it still made sense to outsource some of the sales responsibilities.

The Lure of Insourcing

Now, almost two years later, companies have become more comfortable with virtual sales practices, which include employees having flexible schedules that allow them to work a few days a week remotely.

So, sales and marketing managers thought, why pay third-party outsourcers when we can outsource to ourselves?

Thus, the concept of insourcing, a sort of outsourcing turned on its head, gained ground. Companies could hire teams of people to work remotely. It seemed to work during the lockdown. Often, they felt they had better monitoring of the process, good quality control and could also save money.

It’s that last benefit that’s going to put businesses at risk. That’s because most businesses looking to insource have not been content with saving money by cutting out the outsourced firm. There’s theoretically no need to set them up at corporate headquarters in New York, Atlanta or Silicon Valley, for example. They figure they can locate their remote team of inside sales reps in small towns anywhere across the country or world. Business managers can pay them less because the cost of living is lower.

The Risks of Insourcing

It looks good on paper. The reality, however, is a little different.

In a rush to insource and save money, many companies may overlook many traditional incentives that keep employees with a company. Inside sales jobs are not easy. Reps need a nurturing environment, a positive company culture, opportunities and work-life balance. Focusing on just one employee incentive, money, misses the mark.

Since nothing binds these reps to the company besides the money, there’s a risk that they can easily be lured away by ever-higher financial incentives offered by other businesses.

By insourcing an inside sales force, companies are putting themselves at risk for:

High Turnover: People who are incentivized by money will look for more money. Any business anywhere can and will entice insourced remote reps away, so expect a high turnover. And with so much turnover, companies need to bring on new reps constantly. Onboarding is challenging when they can’t introduce new reps to the company culture or other employees.

No Company Loyalty: Without interaction with the company and other employees, there’s no camaraderie. No sense that they belong to something bigger and more critical. Even if reps are equipped with the finest remote communications, there’s nothing better for building teamwork than leaning over a cubicle wall and sharing a story or successful sales tactic. With insourcing, teamwork doesn’t exist.

Difficult to Manage Remote Environments: Even with the best technology to monitor, share, communicate and mentor, it’s impossible to recreate personal, one-to-one face time. That makes it challenging to ensure that processes, methodologies and messaging are standardized. It’s difficult to convey the company culture.

Plus, there’s a whole new set of distractions, interruptions and temptations working at home. If you notice a rep is not putting in the time or hitting their goals, you might find it’s because of interferences from family distractions or childcare needs. But there are also times when remote reps are taking other work on the side. You’re managing a whole new set of variables.

Alternatively there may be reps who lose the boundaries between their job and their home life, striking an unhealthy work-life balance.

Lost Reputation and Breakdown of the Sales Cycle: With money-hungry reps who have low morale and no loyalty, you can’t expect them to build relationships with prospects, share best practices with the team or take responsibility on behalf of the business or its customers.

Inside sales reps play a unique role. They’re not just field reps who’ve switched to a virtual environment, calling customers and closing sales by phone. Inside sales reps are multi-taskers—making the first contact, building lines of communication, following up and generating trust. People who have none of those experiences themselves will not pass these values along to prospects and customers.

Instead, over time companies will see their pipelines shrink. Lead-to-prospect-to-opportunity conversions will decline. Customer churn rates will rise, and everything from your company culture to the bottom line will suffer.

A Real-Life Experience

When COVID-19 first emerged, we got a taste of what it was like to have our telesales people work remotely. Although call centers in some locations remained open, we decided that for our employees’ health and safety, we’d send everyone home to work.

For the first month, everything was good. Employees proved they could be productive at home. But by the second month, the novelty was gone and reality set in. A few liked it and even flourished, but most found working at home either too comfortable or too distracting. There were challenges to performance standards when working away from the office.

These difficulties occurred even though our inside sales reps are used to working virtually. Plus, most of them were pre-COVID-19 employees. They knew the company, our culture and other reps. Even though they were good, loyal employees, they struggled.

Based on our experience, we brought everyone back to the call center as soon as possible, and most of our employees were eager to return.

It takes years and much effort to build a strong sales team. But it’s never going to happen if they don’t feel like a team in the first place.

Companies may not yet be sensing the risks of insourcing. It’s a relatively new trend, and most companies are still ramping up.

If you still want to insource your own inside sales team, my advice is not to dispatch them to the far corners of the earth. Keep them close to the business. If you’re concerned about the longer-term risks of insourcing, avoid the headache by considering working with an experienced, professional agency.

Short-term savings often result in long-term costs. Don’t risk revenue and relationships to save a few dollars. When it comes to insourcing, the long-term return on investment may not be there.

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