B2B SalesHiringSales Development

How much does an inside sales team cost?

By October 15, 2020 April 12th, 2021 No Comments

A sales development team is one of the biggest levers for fuelling the growth of a B2B SaaS company. The Sales Development Representative’s (SDR) role is to provide your own sales team with a predictable pipeline of high quality opportunities, so that your Account Execs can focus on closing.

An inside sales team is also an expensive team to build, run and manage. According to our calculations for a team in South Africa, the fully loaded cost of a small sales development team (2 SDRs + 1 manager) is around R2,2M per year, or R180k per month.

You’ll find a full breakdown below, but we’ll first look at some benefits of outsourcing your sales development function.

What are the benefits of outsourcing your inside sales team vs. building it in-house?

Much faster setup time

Building an inside sales team takes a long time. For most companies, hiring a sales leader and then building a functioning team takes at least six months. This likely has an opportunity cost of millions of rands in revenue. That’s why at Delta-v, we aim to custom build our sales development teams in just 45 days.

Avoid burning time and money through trial and error

Building a new team is often a trial and error process—there may be few false starts along the way. There’s a direct financial cost to this learning process, and also an opportunity cost of lost sales productivity.

By using an externally managed team, you can avoid “paying your school fees” in this area of your business, and it’ll cost you around the same amount (minus the headaches). A managed inside sales service can reduce the risks associated with building your sales development function in-house.

You get to focus on closing

Building and running a sales development team requires hiring sales leadership, recruiting individual contributors, training, coaching, as well as selecting and implementing a new tech stack. An outsourced service removes this complexity. This means that you and your sales team can focus on closing deals.

Scale up and scale down when you want

Using our own model as an example, you’ll pay one monthly fee for your outsourced inside sales team. You’ll have total visibility on the costs associated with this function, which makes for simple ROI calculations. It’s also quick to add additional team members, so that you can scale up your managed team as needed.

What will an inside sales team cost you in their first year?

The table above doesn’t factor in additional expenses such as the initial costs (recruitment fees and IT equipment) of your team manager, the cost of turnover within the team, and external training.

Notes on the data

Recruitment Fees: these are based on average agency fees for hiring an SDR. If you have an internal recruiter, agency recruitment fees are a good proxy for your internal costs of making these hires.

Equipment: these are based on the physical hardware you’ll want to equip your SDRs with. This includes a decent laptop, dual monitors and a good headset. At Delta-v we equip our team with MacBooks, great headsets and dual 24″ monitors.

SDR Salaries: these are a based off a base salary range of R20k-30k and assume some level of complexity to your product and market. You could hire SDRs for less if you have a very simple product and outbound process. At Delta-v, our hiring scorecard generally requires an SDR to be degree educated and have 1-3 years sales related experience.

SDR Manager Salary: this is based on what you’ll likely need to pay for an experienced leader who has previously performed a similar role and can hire, build process, train and manage sales people. It’s worth noting that these sales leaders are exceptionally hard to find in South Africa.

Office Space: this is calculated at what it will cost to provide fully supported office space including floor space, office equipment, connectivity, security, cleaning, and so on.

Perks and Benefits: when you factor in parking, lunches, and team events, our figures could well be below what many tech companies would spend.

Want to find out more about outsourcing your inside sales team?

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