Outsourcing sales

In the short term we have seen a reduction in National accounts managers as companies have sought to retain face to face relationships at the expense of those whose impact is less immediate. However, it seems likely that in the longer term we will see companies deciding which sales roles are “core” to the company and which can be outsourced for reasons of “reach and flexibility”.

It could be argued that our industry has been slow to catch on to this trend. While many companies have disposed of their “back books” to outsource specialists, most companies have been keen to keep their sales forces in house despite the high expense and inflexibility. 
The major reason given is concerns about quality and control in a regulated environment. There is clearly a feeling that whereas is it OK for food manufacturers and pharmaceutical companies to outsource their B2B sales, it is not the same for Life Offices because of the complexity of the product. This is true to a point but I would argue that quality issues can be overcome by using someone who understands the industry and the market.

Our industry is cyclical but it also depends on innovation and most companies have difficulty in scaling up or down for product launches.

We have seen a rise in the number of self employed broker consultants selling non regulated offshore products to the UK IFA market.

This has two main causes
1. New players entering the market wishing to control their costs
2. Some high quality Broker Consultants have found total earnings reducing in recent years and are keen to move to a basis where remuneration more accurately mirrors volumes sold.

This arrangement can suit both parties but at present it only looks possible for offshore companies who are not regulated in the UK as UK based companies worry about control, quality and TCF (a philosophy which discourages too direct a relationship between sales volumes and remuneration).

In future, our prediction is that many companies will have a core retained sales force responsible for the company’s largest relationships. However, this may well be supported by a flexible outsourced solution which can be scaled up for product launches and scaled back afterwards to undertake more of a “holding” role. 

At Paul Harper Search & Selection we have been planning for this for some time and have created a solution which offers a unique opportunity to companies wishing to consider this option. If you want to know more, please call Paul Harper on
0117 920 0060.

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