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White Paper:  The Cost of Outsourcing Teleprospecting - Dan McDade of PointClear

Outsourced-teleprospecting-lg-thumb_cropped Slma-recommended-187Title:  White Paper:  The Cost of Outsourcing Teleprospecting


Published by/Author:  Dan McDade of PointClear

Gated: Yes

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Length:  2 Pages


If you have wondered if you can hire an outside service for teleprospecting for less than doing it in house, this report will help you. PointClear’s report covers the hard numbers of someone making a choice between doing prospecting in-house versus outsourcing.

  • The expenses of in-house team are covered
  • Eleven areas are considered to run an in-house operation
    • Salary
    • Hiring, training and retaining
    • Benefit load
    • Incentives
    • Management
    • Rent (space cost)
    • Computer, sales tools, data
    • G&A
    • Phone
  • Results are compared between inside and outside departments are compared in:
    • Dials
    • Completed contacts
    • % Leads
    • Qualified leads
    • % Closed
    • # Complete3d Deals
  • No surprise here, outsourcing pays off in a lower cost and increased productivity

Why it’s Important

“I am not prejudiced against inside departments, but my experience dictates that when truth be told, inside departments seldom, if ever, measure up when the goal is prospecting.  The reality is they cost more and don’t produce enough.”

James Obermayer SLMA

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  SLMA Comments:   

We disagree with the authors numbers.  They are conservative and that’s good, but they have been too conservative. The cost for running an inside department with comparable hours worked is much higher and its productivity is lower. They indicate there is a 7.30% cost difference and a 92% difference in revenue generated.  I think the cost numbers are higher but the productivity a solid projection.

The benefit load is not 14.4% but 20-30%  depending on the employee’s status.  If just this item is taken into account the cost per hour of doing the service in house is $77.8 per hour (25% benefit load) versus the outsourced fully loaded cost of $61.50.  

Inside dials.  We agree that inside dials are less than those achieved by an outside firm. Granted, if the inside department is a real department of 6-8 + people and it is run as a department and not a few callers sitting in a corner making dials, the productivity may be somewhat closer to an outside departments number of dials.  But for some reasons the inside group never measures up.  Maybe it is the meetings, sick time, management time, bull____ time, whatever.  It never approaches the outside services numbers. 

Don’t believe me? 

Ask for a telephone report for your inside telemarketing department by station. Review the minutes per day on the phone per person.  Once you get over the shock of how little time your inside people are actually spending on the phone look at the numbers they are dialing.  Repeat numbers are a dead give away that someone is calling home, their special someone, their broker or their bookie.  

In all fairness, inside teleprospecting departments are most often diverted from their primary mission to do something other than prospecting. They do data cleansing, CRM data entry, customer service calls, inviting people to trade shows, confirming webinar events, etc. I am not saying this isn’t valid work, but it isn’t what most of them were hired to do.  These people usually don’t mind the diversion as most of them don’t like the job they were hired to do with its constant rejection.

Other issues to consider:

Inside departments are also often tasked with taking inbound calls as well as outbound.  It sucks time away from their primary job; not a lot but some hours.

When you measure the hours worked for inside versus outside, inside departments will often be paying for 1.5-3 people to do what an outside department can do for the same number of actual time on the phone.  Again as previously stated, telephone reports by works station tell the real story.  Without real on-phone time you have fewer dials, qualified leads and sales.    

Why It’s Important:

“When measuring hours worked, fully loaded costs, dials and qualified leads, outsourced telemarketing operations without fail, 99% of the time, will be less expensive and more productive.”

James Obermayer - SLMA 

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Recommended for: 

  • President
  • C-Level Folks
  • CFO
  • CSO
  • CMO
  • Marketing Operations
  • Content Management and Creation
  • Product Management

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This review was conducted independently without the advice or consent of the publisher.    Of course, we only review those papers that are worth it for you to read, we leave the others to someone else.  This is an editorial. 

Note:  If you would like your research or e-book reviewed, you may submit it to: content@salesleadmgmtassn.com.  There is no guarantee it will be reviewed.  You may not be given notice if it is reviewed.  If you would like to submit artwork for the cover of the work along with a copy of the work, you may do so.  Members and non-members, sponsors and non-sponsors are welcomed to submit work for review.  Sponsors are given priority for white paper reviews.

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