A Critical Decision
In the world of lead generation and sales, businesses are always looking for the most efficient and cost-effective strategies to generate leads and close deals.
One of the critical decisions in this domain is whether to hire a Sales Development Representative (SDR) or to partner with a reputable outbound marketing agency. Both options have their merits, but when it comes down to the financials, there’s a stark contrast that can significantly impact your business’s bottom line. Let’s dive deeper into the numbers.
Cost of Hiring an SDR
First off, please note that all the numbers below are averages and we took a very conservative approach. You will find some cases where the numbers can be lower, and many cases where the numbers are higher.
Salary: The financial commitment to an SDR in the US starts with a base salary averaging $55,000 annually, with top performers earning up to $75,000.
Benefits and Taxes: On top of salary, benefits such as healthcare, retirement plans, and payroll taxes typically add up to another $45,000 per year to the cost.
Commission: High-performing SDRs can earn an additional $10,000 to $40,000+ in commissions, further increasing the expense.
Onboarding and Ramp-Up: The initial 3 months are generally less productive as SDRs get up to speed, impacting early returns on investment.
Turnover: High turnover rates mean many SDRs leave within a year, leading to periods of underperformance and the need for frequent hiring.
Training and Tools: Expenses like ZoomInfo ($20k), Salesforce ($900/user/yr), Dialer ($3600/user/yr), Email/Linkedin Automation tools ($1200/user/yr) Linkedin Sales Navigator License ($1500/user/yr). Also keep in mind the salary you’re paying the person to actually train and ramp your SDR’s.
Equipment: Computers, phones, and office gear ($2000)
Recruiting: The process of finding the right candidate often involves expensive recruitment services or paying for job postings.
Total Cost: When considering all factors, the total cost of hiring an entry-level SDR can be $125,000 – $150,000+ per year.
Cost of Hiring a Reputable Outbound Agency
Please note that agency prices can vary from $2,000 to $10,000+ per month depending on what is actually included in their service offering.
Flat Fee: Agencies offer a more predictable cost structure, typically charging a monthly fee ranging from $6,000 to $7,000. This setup makes budgeting simpler and more predictable, with annual expenses around $75,000.
Speed and Expertise: Agencies can onboard quickly, usually within 2-3 weeks, and start delivering leads by the fourth week, thanks to their expertise and existing infrastructure.
Management-Free: Outsourcing to an agency means you don’t need to manage an internal team, freeing up your time and resources.
Results-Oriented: Agencies are focused on performance and results, often becoming an integral part of their clients’ teams. They are inclined to get results in order to maintain the client partnership.
No Hidden Costs: The agreed-upon package is all-inclusive, with no extra fees or hidden costs, offering a straightforward and transparent financial commitment.
Total cost: $75,000 – $80,000/year (roughly $6,500/month)
When comparing the costs of hiring an SDR to partnering with an outbound agency, the financial benefits of choosing an agency become clear. For businesses, especially startups looking to maximize their resources, the agency route offers a cost-effective, predictable, and result-driven option. With an annual cost difference of over $75,000, opting for an outbound agency not only saves money but also alleviates the burden of recruitment, management, and the risk of underperformance associated with new hires.
Conclusion
The choice between hiring an SDR and an outbound agency depends on various factors, including your business’s size, growth stage, and strategic priorities. However, if cost efficiency, speed to market, and minimizing managerial overhead are your primary concerns, partnering with a reputable outbound agency is a compelling option.
By focusing on generating results with a team of professionals dedicated to your success, you can accelerate your business growth while maintaining financial prudence.
