SDR as a Service vs. In-House SDR Teams: Comparison for Sales Leaders

Building a high-performing sales development team is a constant battle. Between recruitment, training, and managing day-to-day tasks, it's a massive time suck.

But what if there was another way to build a well-oiled SDR engine that would make closing deals look like child’s play?

This guide explores the differences between SDR as a Service (SaaS) and in-house SDR teams, giving you the insights you need to make the best decision for your sales pipeline.

What Is SDR as a Service?

SDR as a Service (Sales Development Representative) refers to outsourcing your outbound lead generation activities to specialized teams or agencies.

These teams are typically dedicated to outbound sales: prospecting, qualifying leads, and initiating contact with potential customers on your behalf through tactics like cold calling or emailing. Their primary goal is to efficiently fill the sales pipeline with high-quality leads.

This further allows the internal sales team to focus on closing deals rather than spending time on prospecting and optimizes how you allocate your resources (both time and people skills).

Using SDR as a Service can lead to significant improvements in lead generation metrics such as:

An increased number of qualified leads generated
Higher conversion rates from leads to opportunities
Shorter sales cycles
Improved ROI on sales and marketing efforts

What’s more, these external teams often achieve great results for a fraction of the cost of building and managing an internal team. We break down this below.

What are the Benefits of Outsourcing Sales Development Representatives?

The true benefits of outsourcing sales development extend far beyond just saving money. Here's a closer look at the advantages that can drive your sales organization forward.

Cost-Effectiveness

Outsourced SDR services eliminate the upfront costs of recruiting, training, and managing an internal SDR team. You also avoid fixed overhead costs like office space and equipment.

When you factor in the total cost of overhead on an in-house SDR team, outsourcing usually gives you more bang for your buck.

Faster Lead Generation

Outsourced SDR teams are typically seasoned professionals with established sales processes. They can hit the ground running, immediately launching targeted campaigns and generating a steady stream of qualified leads. This rapid lead flow can significantly boost your sales pipeline and speed up your growth trajectory.

Access to Expertise

Outsourced SDR companies have in-depth knowledge of outbound prospecting techniques, qualification processes, and industry best practices. By leveraging their services, you can access a pool of highly skilled professionals without investing in extensive in-house training programs or several months of onboarding.

Scalability and Flexibility

With an outsourced SDR team, you can easily adapt to changing market conditions and campaign goals and remain competitive even in fast-paced, crowded sectors. Simply scale your team up or down as needed, removing the burden of fixed staffing costs and allowing you to optimize your resources to make them as impactful as possible.

Focus on Closing Deals

Imagine your sales reps spending less time prospecting and more time closing deals. Outsourcing lead generation frees your internal sales team (as they know your product or service and audience inside out) to focus on what they do best: nurturing qualified leads and converting them into paying customers. This improves overall sales efficiency and effectiveness, driving higher revenue for your business.

Shorter Sales Cycles

Qualified leads are the lifeblood of any sales funnel. By handling initial contact, qualification, and lead nurturing, outsourced SDRs ensure your sales team only spends time on high-potential prospects. This streamlined process shortens your sales cycle, allowing you to close deals faster and capitalize on fleeting market opportunities.

Explanation of SDR as a Service Model: How Does It Work?

Think of your sales funnel as a factory assembly line.

An in-house SDR team would be the initial stage, responsible for gathering raw materials (prospects). But wouldn't it be smoother to have a dedicated supplier deliver pre-processed components (qualified leads) directly to your assembly line (sales team)?

That’s what you can achieve with SDRaaS. The core function of your outsourced SDR team is to identify and qualify leads. They focus on finding potential clients and customers who are a good fit for your product or service. They then assess these prospects' interest and suitability through a qualification process.

Here's a deeper dive into how the entire process works:

Step 1: Defining Your Ideal Customer

The journey starts with a collaborative effort. You'll work with the SDRaaS provider to define your Ideal Customer Profile (ICP).

This detailed persona outlines the characteristics of your perfect customer, including information like:

Industry
Company size
Decision-making roles

For example, if you sell marketing automation software, your ICP might be marketing directors at mid-sized technology companies.

Step 2: Building Tailored Lead Generation Strategies

Once you've defined your ICP, the SDRaaS provider assigns a team of experienced SDRs to your project. These SDRs are skilled in various outbound prospecting techniques, and the provider will match them to your specific industry and needs.

Imagine you're a cybersecurity business targeting financial institutions. The SDRaaS provider might assign you a team with a proven track record of cold-calling security officers at banks and wealth management firms.

Step 3: Multi-Channel Prospecting

SDRs leverage a multi-channel approach to identify and connect with potential customers. These approaches may include cold calling, email outreach, or social media prospecting—more on that in the following sections.

Step 4: Lead Qualification

Not every prospect is a good fit, but your outsourced team of SDRs will know exactly how to find diamonds in the rough. They will implement a qualification process to assess each lead's interest and suitability for your product or service.

This often involves asking questions about the prospect's current challenges, budget, and decision-making timeline. Only leads that meet your pre-defined criteria are classified as "qualified" and passed on to your internal sales team.

Step 5: Tracking Performance for Success

Both you and the SDRaaS provider closely monitor the team's performance using key metrics. For instance, number of leads generated, qualified leads passed on, or meetings booked.

Tip: Regularly review these metrics. This way, you’ll be able to make adjustments to optimize the SDRaaS campaign and align it with your evolving sales goals.

Outsourced SDR vs In-House SDR

Essentially, the key difference between outsourced SDRs and in-house SDRs boils down to who employs them and where they work. Let’s unpack the two main options: outsourced SDRs and in-house SDRs, to help you make an informed decision.

Employment and Management

Outsourced SDRs: Imagine them as loaned talent. You contract with a third-party SDR provider who employs and manages the team. They handle everything from recruitment and training to performance reviews and day-to-day activities.
In-House SDRs: Here, you take the reins on the entire process, from recruiting and hiring to training, managing, and motivating the team. These SDRs are fully integrated into your company culture, breathing your brand and understanding your unique selling proposition inside-out.

Where the Work Gets Done

Outsourced SDRs: Geography is no barrier. Your outsourced SDR team could be located anywhere in the world, depending on the provider's network. They can work remotely for the outsourcing company, offering a flexible and potentially global talent pool and catering to your target market right there—potentially in its own language.
In-House SDRs: These SDRs are either embedded within your office space, working alongside your sales team, or working remotely for your company. This proximity can foster a strong team spirit and allow for closer collaboration.

Control and Brand Alignment

Outsourced SDRs: While you set the overall goals and strategy, you might have less direct control over the day-to-day activities and communication style of outsourced SDRs. Their training and communication might not perfectly align with your company culture, requiring clear communication and close collaboration with the outsourcing provider.
In-House SDRs: You have direct control over training content, communication style, and brand representation. In-house SDRs are fully immersed in your company culture, allowing them to become real brand ambassadors when interacting with leads.

Cost and Scalability

Outsourced SDRs: Generally, the upfront cost is lower compared to building an in-house team. You often pay a set fee or a performance-based fee, eliminating the burden of salaries, benefits, and office space. Scaling the team up or down is typically easier with an outsourced provider. Imagine needing to quickly ramp up lead generation for a new product launch—with an outsourced SDR team, you can simply increase the number of SDRs assigned to your project.
In-House SDRs: The upfront cost can be higher due to recruiting, training, and office space expenses. Scaling the team requires additional hiring and potentially more office space. This can be a challenge for startups or companies with limited resources.

Expertise

Outsourced SDRs: Depending on the size and specialization of the outsourcing company, you may have access to a wider range of expertise. Larger ones might have SDRs with experience in specific industries or verticals, bringing valuable knowledge to the table.
In-House SDRs: Your company's resources and investment in training might limit the level of expertise of your SDRs. While you can develop your SDRs' skills in-house, it might take longer to achieve the same level of specialization as an experienced outsourced team.

Ultimately, the decision comes down to your company's priorities—there’s no universal answer to which is better.

What are your business needs? If flexibility and cost-effectiveness are crucial, then outsourced SDRs might be the ideal solution. However, if greater control and brand alignment are top of mind, building an in-house SDR team might be the better fit.

Key Services Offered By SDR-as-a-Service Providers

SDRaaS providers are more than just lead generators; they're strategic partners who can help you build a qualified sales pipeline, optimize lead generation efforts, and scale your sales initiatives for sustainable growth.

Lead Generation

The first task of an outsourced SDR team is to identify potential customers who perfectly align with your Ideal Customer Profile (ICP) through different approaches: cold calling with scripts targeting decision-makers, email marketing campaigns, and social media prospecting.

Lead Qualification

SDRs examine the prospect's current challenges, budget considerations, and decision-making timeline while assessing their interest level and suitability for your product or service. Using scoring systems, your SDR provider can assign points based on the prospect's answers to qualification questions.

These data-driven models help SDRs prioritize leads and ensure they focus on the most promising opportunities. Only leads that meet your pre-defined criteria are classified as "qualified" and passed on to your internal sales team, ensuring they focus on the most promising opportunities.

Sales Funnel Management

SDRaaS providers don't just hand off leads to your internal team—they help move them through the initial stages of your sales funnel. By qualifying leads and ensuring they are a good fit, they prevent unqualified prospects from clogging your sales pipeline. This allows your internal sales team to dedicate their hours and expertise to nurturing high-intent leads and closing deals instead of wasting time on those who are unlikely to ever buy from you.

Performance Tracking and Reporting

SDRaaS agencies usually offer regular performance tracking and reporting using key metrics like:

Number of leads generated. Tracks the overall prospecting volume

Qualified leads passed on. Measures the effectiveness of the qualification process

Meetings booked. Indicates the SDR team's ability to generate new sales conversations.

Assessing Your SDR Team Needs: 3 Key Things to Consider

Still on the fence about whether outsourcing is the best option for your business development? Here’s what you need to understand about your SDR team needs before you request your first meetings with potential vendors.

Identifying Business Needs and Goals for SDR Outsourcing

First, you need to think about what you’re aiming to achieve with an outsourced SDR team. Think about the answers to the following questions:

Sales goals: Clearly define your sales goals. How many new clients do you need to acquire in the next quarter or year? What is your desired revenue growth?
Current pipeline health: Evaluate the health of your existing sales pipeline. Do you have enough qualified leads to meet your goals? Is the lead generation process efficient?
Internal resources: Assess your internal capabilities. Do you have the budget and staff to build and manage a successful in-house SDR team?
Desired sales cycle length: How quickly do you need leads to move through the sales funnel? Outsourcing can be a good option if a faster ramp-up is required.

Determining the Scale of SDR Services Required

Then, you should aim to determine how big your outsourced team needs to be to cover everything you want to achieve, by assessing your lead volume, target market, and sales and marketing campaigns you’re planning to run:

Lead volume: Estimate the number of qualified leads you need your SDR team to generate per month or quarter to achieve your sales goals.
Industry and target market: Consider the complexity of your product or service and the specific needs of your target market. This will impact the required skill set and potentially the number of SDRs needed.
Campaign focus: Are you launching a specific campaign targeting a new market or product line? Outsourcing might be ideal for a temporary surge in lead generation needs.

Determine the Primary Reason for Outsourcing SDRs

Are you outsourcing SDRs because of costs, the need to ramp up sales quickly, a lack of internal talent, or other factors?

There are three main reasons why businesses choose to outsource their SDR team:

Cost-effectiveness: Building and managing an in-house team involves recruitment, training, salaries, and benefits. Outsourcing can be more economical, especially for smaller businesses.
Rapid lead generation: Experienced outsourcing firms can quickly ramp up lead generation efforts, shortening the time it takes to fill your pipeline.
Lack of internal talent: You might lack the resources or expertise to recruit and train a qualified in-house SDR team. Partnering with an SDR outsourcing provider fills this gap.

Choosing the Right SDR as a Service Provider

Selecting the right SDRaaS provider is like finding a teammate who complements your sales strategy. Here's a cheat sheet to guide your evaluation process:

1. Industry Expertise

Imagine you're a software company selling cloud-based project management tools.

Look for an SDRaaS provider with experience in the tech industry. They'll understand the challenges faced by your target audience (engineering teams, marketing agencies) and tailor their outreach accordingly.

Avoid generic providers who might struggle to connect with your specific market.

2. A Proven Track Record

Don't settle for empty promises.

Ask for case studies that showcase their achievements in similar industries. Focus on results that align with your goals.

For instance, if your goal is to increase qualified leads by 20%, look for case studies demonstrating similar success stories for their clients. Explore websites with client testimonials and reviews. Use social media to learn if anyone in your network has had an experience or advice they might want to share.

3. SDR Team Composition

Ask about the SDRs' qualifications and experience.

Do they have a proven track record in B2B sales? Are they familiar with your product or service type?

Say you're selling high-end networking equipment—you'll want an SDR team with experience in complex B2B sales cycles and a strong understanding of technical specifications.

4. Technology Stack

Evaluate the technology used for lead generation, qualification, and communication.

Look for providers that leverage a robust CRM platform to manage leads and track interactions. Sales automation tools can streamline outreach efforts, and email marketing software can nurture leads.

Ensure data security is a top priority for the vendor—ask about their protocols for protecting your confidential information.

5. Investing in SDR Development

Ask about the agency’s onboarding process for new BDRs and their ongoing training programs. Do they equip their team with the latest sales methodologies, like challenger selling or solution selling?

Regular training ensures your SDRs stay up-to-date with industry best practices and effectively represent your brand.

6. Pricing & Contract Flexibility

Understand the SDR outsourcing company’s pricing models (hourly, retainer, performance-based). Choose one that aligns with your budget and risk tolerance.

For example, a performance-based model might be ideal if you're unsure about the initial lead generation volume.

And remember, always negotiate. Review the contract terms carefully, focusing on aspects like service level agreements (SLAs) that outline performance expectations. Ensure termination clauses are fair and data ownership rights are clearly defined. Look for flexibility to adjust the service level as your needs evolve.

If you’re not sure whether you understand all the terms well enough, consulting a legal professional can’t hurt.

Evaluating Potential Partners

If case studies that showcase their success in industries similar to yours are not readily available on the website, request them. You can also contact references to get firsthand insights into their experience—positive testimonials from satisfied clients can be a strong indicator of their capabilities.

The next step is a call with the agency—or a demo, depending on what they offer. Evaluate their understanding of your business and their proposed approach. A provider who actively listens and tailors their strategy to your unique situation demonstrates a commitment to your success.

Is a trial available? Excellent—you should go for it. A probationary period will allow you to assess the SDR team's performance and ensure a good fit before committing to a long-term contract.

Starting Off on the Right Foot: Your SDR Outsourcing Checklist

To facilitate this process of assessment and selecting the right partner, here’s an easy-to-follow checklist to guide you:

1. Define your sales objectives and KPIs:

What are your specific sales goals (number of qualified leads, conversion rates, revenue growth)?
Identify the key metrics in line with your goals that you'll use to measure the SDR team's performance (number of leads generated, meetings booked, lead qualification rate).
Gather and organize all relevant materials about your product or service (product brochures, sales decks, customer testimonials, and pricing information).
Ensure the SDR team has access to clear and concise information they can leverage when prospecting and engaging leads.

2. Discovery with the SDR service provider:

Schedule a discovery meeting with the SDRaaS provider to discuss your business, target market, and sales goals.
Ask questions about their experience, expertise in your industry, and the processes they use for lead generation and qualification.
Clearly define the scope of services you'll receive (lead generation, qualification, lead nurturing).
Establish mutually agreed-upon goals and metrics to track progress and measure success, ensuring both parties are working towards the same objectives.

3. SDR Onboarding

Introduction to tools and platforms:

Introduce the SDR team to the tools and platforms they'll use for lead generation, communication, and CRM.
Ensure the team is comfortable with the technology and understands how it supports their outreach efforts

Training sessions for SDRs on your product/service:

Provide comprehensive training sessions for the SDR team on your product or service
Equip the SDRs with the necessary knowledge to effectively communicate the value proposition and address potential customer concerns

4. SDR Implementation

Launch of SDR campaigns:

Collaborate with the SDRaaS provider to launch targeted lead generation campaigns aligned with your goals and KPIs (possibly involving cold calling, cold emailing, or social media outreach strategies)

Regular monitoring and adjustments:

Maintain regular communication with the SDRaaS provider and monitor the campaign performance using the agreed-upon metrics
Be prepared to adjust strategies and messaging as needed to optimize lead generation and qualification processes

5. Evaluation and Scaling

Performance review against KPIs:

At predetermined intervals, conduct performance reviews to assess the SDR team's achievement of your KPIs
Analyze data and reports to identify areas of success and opportunities for improvement

Feedback loop and continuous improvement:

Establish a feedback loop to provide constructive feedback to the SDR team and the SDRaaS provider.
Based on performance reviews, you may decide to scale your outsourced SDR team up or down.

Measuring the Success of SDR Outsourcing

Outsourcing your SDR team can be a strategic move to boost your sales pipeline, but how will you ensure optimal ROI? Tracking key performance indicators (KPIs) and analyzing results is the answer.

Here's a roadmap to guide you, complete with concrete examples:

KPIs for SDR Outsourcing

Lead Generation Metrics

These metrics assess the raw power of your lead generation engine:

Number of leads generated: Track the total number of leads produced by the SDR team each month/quarter. Aim for steady growth or set a target based on market size and sales goals. some text
- Example: Increase lead generation by 20% in Q3.
Lead qualification rate: Divide the number of qualified leads by the total leads generated. A good rate depends on your industry, but generally aim for 20-30%. Analyze low rates to identify issues with lead targeting or qualification criteria. some text
- Example: Investigate why the qualification rate dipped below 20% last month. Refine lead scoring or provide additional training for SDRs.

Engagement Metrics

These metrics indicate the effectiveness of SDR communication:

Number of call connects and emails sent: Track daily/weekly outreach volume. Look for steady increases, but also consider quality over quantity. some text
- Example: While aiming for 100 dials a day, ensure SDRs are connecting with qualified prospects.
Average call duration and email open rates: High call durations and open rates suggest engaging conversations and compelling messages. A low average call duration might indicate rushed conversations or reaching the wrong audience. Low open rates might necessitate revising email subject lines or content. some text
- Example: Investigate a drop in average call duration below 2 minutes. Provide coaching on effective conversation strategies.

Meeting Booking Rate

This metric measures the SDR team's success in converting outreach into sales conversations:

Meeting booking rate: Divide the number of meetings booked by the number of qualified leads. Aim for a 10-20% booking rate. Low rates might indicate issues with lead quality, SDR communication skills, or value proposition pitch. some text
- Example: A booking rate below 10% suggests the SDR pitch might not be resonating. Analyze win/loss data from booked meetings to identify areas for improvement.

Sales Conversion Metrics

These metrics track how well your qualified leads translate into sales:

Sales accepted leads (SALs): Track the number of qualified leads passed on to your internal sales team. A healthy pipeline of SALs is crucial for sustained sales growth. some text
- Example: Celebrate a consistent flow of 50 SALs per month.
Lead to opportunity conversion rate: Divide the number of opportunities created from SALs by the total number of SALs. A good rate varies by industry, but generally aim for 15-20%. some text
- Example: Analyze reasons behind a drop in conversion rate from SALs to opportunities. Identify if the SDRs are qualifying leads accurately or if the offering needs to be better aligned with prospect needs.
Sales cycle length: Track the average time it takes to convert a lead into a paying customer. Aim for a shorter sales cycle to accelerate revenue generation. some text
- Example: Investigate reasons behind a lengthening sales cycle. Identify bottlenecks in the sales process or provide additional training to the sales team on closing deals.

Tools and Methods for Tracking and Analyzing Results

You should look into these three categories when building your tech stack to track and measure SDR results:

SDRaaS provider reporting, if available (reports on call activity, email engagement, etc.)
CRM integration with the provider’s tools (a two-way data flow for an up-to-date sales funnel)
Data analytics platforms, both marketing and sales-specialized ones (a holistic view of your marketing and sales efforts for clearer insights)

Best Practices for Managing the Outsourced SDR Team

Building a successful relationship with your outsourced SDR team requires clear communication, performance monitoring, and a focus on continuous improvement.

Here's how to achieve this while navigating potential hurdles:

Open Communication and Shared Goals

Establish regular meetings and clear communication channels to ensure everyone is aligned on goals, expectations, and challenges. Transparency about goals and data fosters a sense of partnership and helps address misalignment early on.

Effective Performance Monitoring

Use reporting tools to track key metrics (leads generated, qualification rate, meetings booked) and SDR activity (call recordings, email outreach). Conduct regular performance reviews to assess KPI achievement and provide constructive feedback. This monitoring can identify inconsistent lead quality or low SDR engagement and address it through targeted coaching or revised lead qualification criteria.

Clear Expectations and Ongoing Training

Clearly define expectations for communication, reporting, and lead qualification. Provide ongoing training to keep the SDR team up-to-date on your product/service, industry trends, and lead generation best practices. Unclear expectations can lead to confusion and inefficiencies.

Positive Reinforcement and Feedback Loop

Recognize and reward achievements to motivate high performance. Establish a feedback loop to provide constructive feedback to both the SDR team and the SDRaaS provider. This feedback loop is essential for addressing performance and quality concerns.

Async Collaboration as a Priority

Make sure everyone on the team can work autonomously on their own time, especially if the SDRs are distributed across different time zones. You can also consider scheduling overlapping work hours for essential communication and plan asynchronous communication for updates outside those times.

Investing in Building Relationships

Treat your outsourced SDR team as an extension of your internal sales force. Building positive relationships fosters trust and collaboration—this sense of mutual investment can lead to higher engagement, improved communication, and ultimately, better sales results.

Accelerate Pipeline Generation and Close More Deals with AltiSales

Now that we’ve unpacked the advantages and considerations of both in-house and outsourced SDR teams and explored the key services offered by SDRaaS providers, you have a clear roadmap for successfully managing an outsourced SDR team. You also have the tools to build an effective performance monitoring process and lead a collaborative partnership that fuels your sales pipeline and moves your business forward.

Whether you choose to build or outsource your SDR team, one thing is key: a well-structured and well-managed SDR function is the cornerstone of a thriving sales engine.

And this is exactly where AltiSales can help.

Our team of over 150 sales professionals has everything you need to build a flawless revenue-generating process: from prospecting to reaching out to booking meetings, our word-class, experienced SDRs work to define your target accounts, create outreach strategies, and make sure your pipeline is full of meetings with qualified leads.

And that’s not all—AltiSales offers fractional leadership services, data ops strategy creation, sales consulting and training, and much more.

Find out why 100+ clients globally trust our expertise—book a meeting with us today.

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SDR as a Service vs. In-House SDR Teams Comparison