Business process outsourcing is the process of employing another company to undertake the core or noncore activities of a business. In the initial stages, most of the companies provided only activities like after sales services, customer relationship management, and marketing, to other firms but now, they are giving away the activities like production and sales also. This is because it is more profitable for the business. Presently many companies are appointing other companies to carry out their sales because of the following reasons.
Helps In Entering New Market
A small company or a business unit may have its own geographical limitations and it will restrict them from entering new markets even if there are potential customers. Even if they wish to enter reach those customers the cost such as salaries and wages for new sales personnel, carriage charge for making the goods available at that location, and also the capital expenditure for setting new sales outlets will be higher than the expected income. Therefore, sales outsourcing will reduce all the resource constraints of a business.
Helps To Avoid Technical Constraints
Sales are not only about making the goods that are produced in the company available to the market. It is about analyzing the population, understanding their social habits, understanding their preferences, identifying the target consumers, and making the goods available to the potential customers. This will require both manpower and technology. Therefore, it is better to outsource these activities to another company because they will be having the most updated tools to formulate the sale plan and employees to undertake the job.
Reduce Communication Gap
Communication gap is one of the major problems existing in most of the industries. The less collaboration between sales, marketing, and production departments will result in low revenue. It will also increase the negative cash flow. The main reason for this problem is internal conflicts in the company. On the other side, an external sales unit will make sure to keep a good relationship with both the production and marketing departments because they can’t function without their cooperation. This will help in not only reducing internal conflicts but also in improving the revenue of the company.
Better For New Product Launch
Introducing a new product or new service by the company is one of the most expensive activities of the business. The risk associated with this activity is also very high because the capital expense for producing a new product will be very high, and there is an equal chance for the product to get accepted and rejected by the customers. Therefore, it is always better to share the risk during a new product launch with another sales and marketing outsourcing company. It will not only help in reducing capital expenditure but also in increasing the acceptability of the product.
Better Customer Support And Relationship
The sales department of a company must maintain a personal relationship with potential customers, and they are also responsible to provide a better after sales service to them. Due to the improvement in technology, there are platforms to directly interact with consumers. but all these will require additional infrastructure and human resources. A sales outsourcing company will be fully equipped with all these technologies so it is better to engage them for these activities.
Better Expertise Knowledge
Sales outsourcing companies would have dealt with a lot of clients. They may also have more knowledge of different markets and consumer groups. A newly established company can acquire all these qualities in the long run but they might not be able to cope up with their competitors in the beginning stage. Therefore, it is better to appoint an outsourcing company for undertaking the sales of a newly incorporated company in the beginning stage to increase their stability. It will also help in reducing the cost of running the business.
In most cases, an outsourcing company will be paid based on the quantity of sales. This will help the company to keep a good track of both the sales revenue received and the total sales of the year. It will also help the business to analyze the trend in sales. Good communication with the outsourcing company will also help the company to obtain the market response on its product and it can be used as a source of information to make updates on the same.
Not only from the side of the company but outsourcing the sales activity is better from the perspective of buyers also because they will be able to access the goods and services from their own locations. It will also help them to make better knowledge about the product from well experienced sales persons. Sales outsourcing is the best option for the new companies and also for those businesses which are struggling to attain their sales targets.