Hire an SDR Or a Lead Generation Agency? Which is Best For Your Business?

By: Jack Reamer |
 September 24, 2021 |

Thinking about hiring an SDR or working with a B2B lead generation agency?

Undoubtedly, there are pros and cons to both options. But much of your choice has to do with where you are in your business at this specific point in time. 

But before you decide, read this article as we will chat about both options, hopefully making your decision more clear. 

To hire or not to hire an SDR? That is the question.

Hiring a sales development representative might be a good option if you have already worked with an outbound sales agency in the past and would like to bring the sales process in-house. 

Maybe you would like more control of what’s happening within your business, or you have gained enough sales experience, that it just makes sense to have your own sales team

You might also have made enough moola over the years, that bringing an sdr in-house would actually be more affordable, than outsourcing. 

So before you choose to go the sdr hiring route, you need to make sure that your business is in the right space. 

Ask yourself some of these questions before you decide to hire an SDR.

  • Can my company afford SDR hiring and everything else that goes along with a sales team?
  • Do I have enough experience to make sure that my in-house reps are doing the best they can to bring in qualified leads?
  • Do I have enough time to train new SDRs, who might lack experience?

(If you feel that it’s time to hire an SDR, then go for it, but if you’re still not 100% certain, keep reading.)

How much would it cost to hire an SDR?

According to PayScale, the average yearly cost of an SDR is about $45 000. This would be for an SDR who lacks experience.

If you would like to hire a highly qualified sales development rep, you could end up paying between $48 000 – $58 000 per year. 

Let’s break this down:

If you had to hire one SDR who is at entry-level (1-4 years), you can expect to pay them $3750 per month.  According to PayScale, this would include tips, bonuses, and overtime pay. 

This is more or less $22.50 per hour.

Here is what you can expect to pay depending on which state you live in.

So you can imagine that if you had to hire a small SDR team, of let’s say 3 people, you could easily pay $135 000 per year. 

This doesn’t include extra expenses such as:

  • Office furniture
  • Data
  • Phones
  • Laptops or computers (If you have an office space)
  • Office rent 
  • Tea/Coffee
  • CRM tools
  • Software licenses
  • Management and admin costs
  • Human resources
  • Extra training costs

But with this being said, it doesn’t mean that hiring an SDR is not a good idea. 

If your business is at a point where you can afford to have a small sales team, then bringing the process in-house wouldn’t be a bad idea. 

Why? Well, for various reasons, but some being that the sales team can grow along with your business, while you keep a watchful eye on what’s happening. 

Questions to ask an SDR before hiring them

Questions to ask an SDR before hiring them

When you’re on the lookout for the perfect SDR candidates, it’s important to ask them well-thought-out questions during the hiring process

Not just anyone can be a good SDR, because the ideal candidate needs to be able to handle rejection and stay motivated. 

These are some of the top questions to ask during the interview process according to Indeed.com.

  • How do you handle rejection?
  • What aspects of sales development do you enjoy the least?
  • Tell me about a time you faced a setback. How did you handle it and what kept you motivated?
  • Do you have any questions for me?
  • Why do you love the sales job?
  • How do you engage with a prospective customer?
  • How would you react if you don’t reach a sales goal for a particular month?
  • What is a recent thing that you have learned?
  • Why do you want to be part of this company?

Side Note: If you do decide that it’s time to hire an SDR you would need to make sure that it’s the right person for your business. An SDR needs to be someone who is quite competitive (in fact we wrote an article about a company called Negotiatus that hires ex-football players as SDRs.)

Pros of hiring an SDR

  • You will have greater control of your own in-house team
  • You will be able to adapt and change your strategy as needed to get the best results for your company
  • Hiring SDRs is a fun way to create an exciting and vibey company culture for everyone in your business. Every time there’s a new sale, all team members (and a little competition) can get riled up with positivity.

Cons of hiring an SDR

  • An SDRs salary can be quite costly if you are just starting out in a new business
  • You might have a greater workload because of training and managing
  • You will have extra expenses such as office furniture, software, phones, and data.
  • If you don’t have the time to teach a new sales team, then it would be better to outsource a lead generation agency. 

The takeaway from this section

Hiring salespeople for your business has to happen at the right time. If you are just starting out, your budget might not allow for an in-house SDR team. There are quite a few extra costs involved, as well as time management. 

But if your business has grown exponentially, and you already have a few ideal customers in your pipeline, then it might be time to start an in-house team of SDRs. If your finances allow, and you have gained some experience in sales, then it makes sense to start your sales team

What about working with a B2B lead generation agency?

Working with a B2B lead generation agency might be the best option for your business if you are just starting out, but once again this would also depend on your budget. 

If you do have a budget for outsourcing a lead gen agency, this could be a great way to get new leads into your sales pipeline. 

Besides this, you could bypass the learning curve, and just have the agency take care of everything for you. Thus giving you more time to focus on closing deals, instead of finding them. 

But remember, not every lead generation agency is built the same. Therefore you need to do your homework before partnering up with just anyone. 

Look out for the following when choosing the right outbound agency:

1. Do they have a solid strategy that they are willing to share with you?

If an outbound agency doesn’t want you to know how they plan on finding you leads, be wary. An agency should be transparent with you about its process. Things they should be willing to tell you is what channels they use to get leads. Do they only use one channel? Or more than one?

If they use only one outreach channel, then this isn’t a good sign. Why? Because you will miss out on leads that you could find elsewhere.

For example at Salesbread we use:

  • Linkedin outreach
  • Cold email
  • Sms

So if we can’t find a prospect on Linkedin, we will then contact them via email and if they don’t respond via email, we will then try SMS. 

Strategy is also important to know because you don’t want the lead generation company to spam your prospects.

This could lead to your email domain being sent to spam purgatory, or having your Linkedin account temporarily blocked. 

So ask them how many messages do they send out per day? How often do they do follow-ups? And whether or not personalization is part of their strategy.

If they don’t use personalization, spam prospects, and follow-up every single day… RUN. You will just be spending money, but not getting anything in return. 

To recap: Use a lead gen agency if they:

  • Use more than 1 outreach channel
  • They use personalization in their messages – Not just generic templates
  • They don’t spam thousands of prospects daily
  • They are open about their process

2. Do they have a good track record?

Check out the company’s B2B sales reviews as well. You might be able to find some good reviews online, which could indicate whether or not clients were happy with their services. 

Another option is to ask for recent case studies, and see how long it took the agency to generate leads, and how many qualified leads they generated within a few weeks. 

At Salesbread you can expect to have some qualified leads within the first week, and we guarantee our clients 1 lead per day. 

 

3. Do you have to sign a contract?

Before choosing to work with a B2B lead generation agency, find out if you have to sign a contract first. If you have to, be wary because they could lock you into a year’s contract, but not bring in many leads. 

At Salesbread we don’t lock our clients into contracts, but rather our results are what makes our clients stay. 

 Side Note: If you are thinking of using a lead generation service read this article first:

https://salesbread.com/10-questions-to-ask-before-choosing-a-cold-email-agency/

How much can you expect to pay an outbound lead generation agency?

Not many people realize that hiring a lead generation agency might actually work out cheaper than hiring SDRs

Why?

Well, think about it… You won’t have to pay salaries, bonuses, or insurance. 

You can also save on software licenses, office space, and even phones/ phone bills. 

(If you want to do cold calling)

If you don’t have the time to manage the sales team, you might need to hire sales managers, which will also add to your costs.

A lead generation agency will handle all of these costs so that you don’t have to. All you have to focus on is your startup and closing deals.

On average you can expect to pay between $1000 – $5000 per month for a lead gen agency. 

Some companies can charge a lot more depending on your needs, but with Salesbread you can expect to pay between $1000 – $5000 per month. 

We also offer free 15 minute consultation services. This comes in handy if you would like to know our strategy, but would like to run your own SDR team in-house. 

Pros of working with B2B lead generation agency

  • You can save money
  • You will save time on managing and training new hires
  • You will be able to work with an experienced team of marketing professionals 

(At Salesbread we have copywriters, personalization specialists, and list builders. Jack the founder of Salesbread works along with the team to make sure that 1 lead per day is generated)

  • More qualified leads during your sales process
  • Skip the long learning curve and let the lead gen agency take care of everything for you. 

Cons of working with a B2B lead generation agency

  • You might not have the budget for outsourcing just yet. If this is the case, inbound marketing might be an option in the early stages of your business to get your brand name out there.
  • If you like to be in complete control of your business, then having an in-house SDR team might be a better option for you.
  • If you choose the wrong lead gen agency, you might get stuck with paying a lot of money, but not getting enough leads.

In conclusion

When it comes to hiring SDRs or working with a lead gen agency, much of the decision is based on where your business is in the stream of things. 

There are positives and negatives to both options, and if you are still not sure what to do, let’s hop on a 15 min free consultation. 

Have a question? Ask away.

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