Offshore sales or hiring a sales team in another country can help you scale your business and boost profitability. It can also help you reduce costs while using the latest technologies in the industry.
However, offshoring sales can be tricky without a clear understanding of it.
In this article, we’ll explore offshore sales in detail, its five benefits, and four challenges. We’ll also explore four popular sales and marketing services and suggest tips for smooth sales offshoring.
Let’s get started.
Table of Contents
- What is Offshore sales?
- 5 key benefits of having an offshore sales team
- 4 main challenges when offshoring sales
- 3 popular sales and marketing services you can offshore
- 4 smart tips to boost your offshore sales prospects
What is Offshore sales?
Offshore sales refer to the process where a company conducts its sales operations from a foreign country. Upselling, cross-selling, telemarketing, etc., are some of the sales tasks that companies offshore.
Companies practice offshoring when their in-house team is inexperienced, expensive, or occupied. They can choose from three different business models when offshoring sales. These include:
- Hiring a third-party service provider to run their sales operations. This approach is also known as offshore outsourcing. Here, the third-party company may take over your entire sales operations or manage just a part of it. However, this approach leaves companies with lesser control over their staff and operations.
- Set up an offshore captive center (a fully-owned subsidiary) and hire a sales team yourself. In this approach, you’re in charge of the entire offshore operations, including hiring. Although you have more control here, it usually requires more investment and effort than the first approach.
- Delegate sales-related tasks to freelancers in an offshore location instead of hiring an entire team. The freelancer will be accountable only for the outsourced task and not your entire sales. Some popular offshore sales jobs for freelancers include sales director, sales account manager, sales manager, etc.
Check out our handy list of the best countries to set up an offshore company.
Now that we know what offshore sales is, let’s dive into its benefits.
5 key benefits of having an offshore sales team
Here are the five main advantages of hiring an offshore sales company:
1. Save money
Offshoring sales is cost-effective as companies typically choose locations with low average salaries and living costs to set up their company or hire from.
For example, according to Salaryexplorer.com, the average monthly salary of a sales representative in the United States (USD 5,330) is way higher than in popular offshoring hubs like India (USD 269) or the Philippines (USD 526).
Additionally, the cost of living in a region in the USA, like South Jersey or North America, is high when compared to these countries. This way, offshoring can help companies reduce their operational costs significantly and maximize their profit margins.
But is cost savings the only reason why managers outsource? Read this article and find out!
2. Access to new markets and diverse ideas
Having an offshore team can help you connect with the local customers and expand the business in the country, as well as the neighboring regions.
Since your team would be well-acquainted with the local market, native customer persona and culture, they can also guide you throughout the offshoring process.
Additionally, their previous sales experiences will help you gather new and diverse ideas that are different from your traditional approaches.
Another benefit of having an offshore team is to test campaigns, products, or services. They can gather customer opinions on a product or service and help you make an informed decision on launching it in the country.
3. Access to latest technology
For example, data analytics can provide your sales manager with insights into a customer’s preferences, and enable a more customized experience.
Similarly, Salesforce, a customer relationship management (CRM) tool, provisions outbound sales with features like sales dialer and automatic call logging.
But buying these latest tools and technologies can be expensive. On top of that, you may have to train your in-house team to use the tool or technology to its full potential, adding to the expense.
Instead, you can delegate sales processes to an offshore service provider with cutting-edge technology and tools. This way, you can leverage the best sales technologies at a fraction of the cost of an in-house setup.
4. Leverage skilled sales professionals
While advanced tools can simplify sales, you’ll still need well-trained employees who know how to use them. Without an expensive training program, an onshore in-house employee is less likely to have enough experience with such tools.
In contrast, an outsourced sales employee will most likely have previous experience with these advanced sales and analytic tools.
However, you need to ensure that your outsourced partner has an experienced team and is well-equipped to handle your sales pipeline.
Additionally, if English isn’t the primary language in your business’s home country, you can hire sales agents or a company from an English speaking country. This will help you boost your global reach and can boost your sales massively.
5. Ability to scale rapidly
Scaling your business may require you to have a large in-house sales team. This could be expensive, especially if you want experienced employees on board. Additionally, scaling can be risky if your company doesn’t have enough experience.
Instead, you can set up a company in an offshore country with experienced professionals who have helped companies scale in the past. They’re more likely to have the resources and expertise required for successful expansion in the offshore country and globally.
Further, they can suggest the best way to start a new business or launch your product in the country and give data-driven insights into how to improve your sales.
Now, let’s look at the challenges of offshoring sales.
4 main challenges when offshoring sales
Offshore sales is a practical solution for businesses in developed cities where staffing and other resources are expensive.
But before you decide, it’s important to understand its challenges so that you can develop a suitable offshoring strategy.
Here are the four drawbacks of offshoring sales:
1. Lack of control
You may not be able to track your offshore team’s productivity as effectively as an in-house team.
Issues like loss of productivity and time-theft can affect your profitability in the long-run.
To tackle this, you can use advanced tools like Time Doctor.
Time Doctor is an employee productivity and time tracking tool that records employee working hours and generates insightful performance reports.
Also, the tool offers a manual and automatic time tracker to log the time an employee has spent on a particular sale.
2. Oversaturated outsourcing sales market
Some popular offshoring locations have become oversaturated, preventing the emergence of new businesses. It results in a lack of competition within the sector and increases the prices of outsourcing services.
This is nullifying the cost-saving advantage of offshore outsourcing, especially for growing businesses.
It’s for this reason that companies are approaching emerging offshore destinations like Colombia, the Czech Republic, and Ukraine for cheaper services.
No matter where you outsource, do a thorough cost-benefit analysis to make sure it’s feasible and profitable.
3. Time zone difference
Your offshore and onshore sales teams may not have overlapping working hours if there’s a huge time difference between the two regions. This could make it difficult for them to collaborate effectively.
For example, a sales representative in Long Island, New York, can’t collaborate in real-time with someone in Mumbai, India, because of the 12-hour time difference. This can be especially worse if they work only during their local working hours.
Such teams should come up with a collaboration strategy.
For example, two sales teams in New Jersey (USA) and Shanghai (China), with a 12-hour time difference, can designate shared core hours. They can also conduct weekly meetings and use a project management tool.
4. Privacy and data security risk
Protecting customer information is a major concern with offshore operations. Failure to safeguard customers’ sensitive data could negatively affect your brand’s trustworthiness.
You must ensure that your offshore vendor is compliant with the latest security standards. You should also get your offshore partner to sign an NDA (non-disclosure agreement) to ensure confidentiality.
Additionally, keep in mind that every country has different privacy laws and regulations. Understand the offshore country’s privacy laws and regulations to safeguard yourself from any potential violations.
Since the benefits of offshoring sales largely outweigh its drawbacks, more and more companies are practicing it. Let’s look at the major sales and marketing services you can offshore.
3 popular sales and marketing services you can offshore
Here are the four leading sales and marketing services you can offshore:
1. Telesales and telemarketing
Telesales is the selling of products or services to potential or existing customers directly over a phone call. Since the telephone is the easiest and cheapest way to contact a prospect or customer, it’s always in high demand.
There are two types of telesales:
- Inbound telesales: The representative attends inbound calls regarding doubts from customers interested in a product or service.
- Outbound telesales: The representative gets in touch with the prospect or customer, introduces them to a product or service, and explains company offers.
Like telesales, telemarketing involves talking to a prospect or customer to generate interest, discuss product information, receive their feedback, and turn them into leads.
Companies commonly outsource cold calling, a type of telemarketing service
It involves contacting a customer with whom the sales representative had no prior interaction to sell a product or service. It’s an effective method to gain new customers. According to Rain Group, 82% of buyers surveyed agreed to meet sales representatives after a series of interactions following the cold call.
Here, your sales employee can approach a potential customer via call and pitch a product or service.
There are two types of cold calling:
- Appointment setting: The call center gets in touch with the potential customer asking for a suitable time to discuss a product or service. Then, they schedule an appointment with them.
- Lead generation: The sales representative generates interest around a product or service and creates prospective customers.
Check out this comprehensive article on outsourcing to a BPO call center.
2. Upselling and cross-selling
Upselling is the process of recommending a higher tier of products or services than what the customer is buying or already using. For example, a cleaning company can offer a monthly package to a customer who books their weekly package.
The main advantage of upselling is that you don’t have to acquire a new customer for an expensive product. You can simply get an existing customer to buy it. As a result, upselling is a major contributor to revenue.
Cross-selling is similar to upselling, where a sales rep pitches an additional product or service that complements the customer’s purchase. For example, a mobile company can cross-sell accessories to a customer who just bought a phone.
However, if not done carefully, cross-selling can lead to heavy fines, customer attrition, and more. For example, Wells Fargo was fined over USD 185 million and had to refund over USD 2.8 million to customers when they tried to cross-sell investment and banking services.
3. Sales analytics
Sales analytics is the identifying, understanding, and predicting sales trends and results. Here, experts analyze the present sales data, like growth, target, etc., and forecast future trends.
The purpose of sales analysis is to simplify data and understand the team’s performance, sales trends, and opportunities. Based on these insights, you can develop an appropriate sales plan.
Now, let’s explore a few tips to increase your offshore sales prospects.
4 smart tips to boost your offshore sales prospects
Here are four tips to boost your offshore sales:
1. Partner with a domain expert
When you choose an offshore third-party company, ensure they specialize in your domain. Such offshore companies may know the secrets to winning over customers in your niche.
You can hire an offshore partner who has the resources and expertise to meet your business needs.
For example, outsource sales analytics to an offshore company with employees who have experience in using the latest data analysis tools.
2. Analyze the sales agency
You must ensure that the offshore sales agency has a proven track record and can deliver what it promises. For this, go through their client reviews and case studies.
An offshore sales manager with excellent reviews is highly likely to have stronger planning abilities and communication skills than another with average reviews.
3. Develop sales strategies
Your offshore sales partner will likely have a thorough understanding of the customer demographics in the region. So it’s a good practice to discuss business development and sales strategies and come up with an effective plan.
Based on this plan, you can decide on full-time or part-time employment, create job postings, lease office space, and plan your resources.
It’s also a good practice to initially partner with an offshore sales company for three to six months to analyze their efficacy before signing a long-term contract.
4. Empower your team with the right training
Even if your offshore team is highly skilled, they may not know your company’s selling and marketing approach, key techniques, client personas, etc. So when you hand over a particular sales task, train them such that they can work effectively from day one.
For example, train the technical sales team on the key features of your products or services so that they can answer customer queries clearly.
Offshoring sales can not only cut down prices but also gives you access to a skilled talent pool to scale your business. However, it has a few drawbacks like lack of control, collaboration, and inadequate data security.
So you should carefully analyze the feasibility of offshore sales before you make a decision.
Go through the information in this article to understand how offshore sales can contribute to your business. And remember to follow the smart tips to boost your offshoring sales prospects.
Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.