Selecting the right partner for your market development activities is not easy. Sales and business development activities in a new territory are of strategic importance to your organization. Therefore, a sales outsourcing partner must be selected wisely and carefully. Here’s a list of questions you should ask in order to separate the wheat from the chaff.
- What is the background, experience and track record of the outsourcing company?
The main assets of a sales partner are its market knowledge and the network of contacts which it brings to the table. The right partner for your organization has a team of seasoned, highly experienced professionals, which can present a proven track record in the markets that are relevant for you, including detailed information on successful projects which were carried out.
- Does the sales partner have experience in the markets (geographies, segments, verticals) and/or with the technologies / product groups that are relevant for you?
Enterprise software sales is different from channel development for a low priced tech product. And a vast network of relationships with key executives in the health care field in the UK is not going to help you very much in the publishing or telecoms markets in Germany or the Nordics. Make sure the company you select as your sales partner is active in the geographies and segments which are relevant to you. Such local market knowledge is even more important than experience with the technology that is provided by your company, although an initial technical understanding will obviously help as well.
Related: Why your European market entry strategy should start in the North
- Does the sales partner have the necessary resources and staff available when you wish to start your new market development activities?
Make it very clear when exactly you wish to start up your new market development activities and ask if the outsourcing company has the necessary resources and staff available at that point in time. Although the organization may have the perfect profile, you need to ascertain that the people you will be working with are a good match to (the culture of) your organization, your offering and – especially – the market you are targeting as well. And that they will be able to invest ample time and efforts in order to meet the objectives you have set.
- Does the partner have its own methodology?
A professional outsourcing company will have adopted a structured, methodical approach to business development and sales and should be able to inform you in detail how it intends to address the market for / with your offering. Preferably this approach is supported by a set of procedures and possibly a software system which allows for monitoring and optimization of all activities during the various stages in the sales process. Such a model provides structure in combination with optimal transparency. At the same time, the model should be sufficiently flexible so it can be adjusted to your specific needs and processes.
- Is the business model entirely clear?
It should be crystal clear to both you and the partner what the commission percentages and bonuses are and to which part of the turnover these are applicable. Does the sales partner receive commission on the licenses only or is the percentage applicable to all revenues that are generated? Does the partner receive commission on turnover that is generated in a specific geography or only on named accounts? Does this go on forever or is there a time limit? And is the partner entitled to receive commission after the agreement between the outsourcer and your company has ended as well? Make sure that there are no loose ends. You don’t want your commission scheme to be demotivating or lead to discussions later on as a result of misaligned perceptions.
- What are the first steps the partner proposes to take after the agreement was signed?
Ask your outsourcing partner which steps they suggest to take immediately after the collaboration agreement will be signed. What should be done first? Run away if the answer is not: to organize a training/knowledge transfer session combined with a business planning exercise. Sure, the partner probably has its own philosophy and – hopefully – its own methodology. But first and foremost, they should gain a comprehensive understanding of the background, history, mission and culture of your company, the benefits and key features of your offering and the characteristics of your customers. They should listen to what you have done and learn from your experience. In order to substantiate this, they should be able to provide you with a standard outline of questions / topics that should be addressed during such a kick-off session.
- Which part(s) of the sales process does the outsourcing company take responsibility for?
What is the major strength of the sales outsourcing organization you are speaking to? Do they present themselves as a lead generator? As a company that is great at putting you in contact with the relevant executives in the organizations that are important to you? Or do they wish to take responsibility for the entire sales process, from initial introduction to closure, and perhaps even after sales account management? Ask where their major strength lies… and make sure this matches with your needs.
- Is the sales partner able to quickly and easily scale up or down if the situation requires this?
A major advantage of working with a sales outsourcing company should be its flexibility and its ability to quickly adjust the efforts and resources based on the specific market circumstances. You don’t want to be stuck in a relationship with a company if things don’t develop as they should. And you don’t want this partner to be a limiting factor if you want to scale up. The partner should be able to provide you with additional resources quickly if things go well.. and scale down rapidly if the market (or your cash situation) requires this.
- What happens if either party decides to disengage?
Before starting an engagement with a sales outsourcing company, discuss the implications of disengagement. Make sure that it is clear to all parties involved what happens in case of termination of the agreement. Is a termination period applicable? This is probably a good idea, so a proper handover can be arranged. And which tail periods are applicable? Also, do you wish your partner to remain involved – even after the relationship has officially ended - for certain account management activities?
- How is reporting done?
Ask the sales outsourcing company what their normal reporting structure is. Do not accept any reporting format which does not match your own. Demand a complete update on all activities every two weeks and – in the early stage of the collaboration – every week. And if this seems convenient to you, ask them to enter any relevant updates directly in your CRM system. Any professional sales organization should have extensive experience with a variety of CRM and lead tracking tools.
So, are you looking forward to get started? Great! We’d be keen to explore new business opportunities with your organization as well. Would you like to assess the potential for your offering in Europe (or specific geographies, verticals or segments)?
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