Outsourced vs. In-House Sales: Which is Right for Your FinTech Startup?

FinTech startups are in good company in 2024: currently, there are over 30,000 trying to make their mark, and the industry is estimated to be worth an incredible $226 billion. But with that level of attention comes a high degree of hard-boiled competition.

If you're running a FinTech startup, you need a sales team that can get you noticed, enhance your business development, and close high-quality deals. You're probably aiming to achieve all that on tight budget constraints, too - and that's no walk in the park.

So when it comes to upping your sales game, you may be starting to ask the age-old question: which is right for my business, an in house sales team or an outsourced sales team?

To be sure, both have their pros and cons. The decision you make will depend on a whole swathe of factors, from cost savings and office space to business goals and company culture.

So to help you make this all-important decision that'll define your business strategy, Leadium's gone all out to compile a handy pocket guide on everything you need to know about in house vs outsourced sales in the FinTech industry in 2024.

Let's get started.

Sales strategies: the lowdown

Chances are, if you're a startup, you've probably been doing a fair amount of sales yourself. At early stages, founders tend to have direct oversight over all day to day operations (including everything from rallying significant investment to conducting content marketing).

But sooner or later, founders need to decide on a concrete strategy for their sales team - this'll help you get your innovative solutions out there into the market and start closing real deals.

So let's take a look at your options for sales frameworks:

What is an outsourced team in sales?

When a company outsources their sales strategy, they're essentially hiring an external agency of skilled professionals to make sales on their behalf.

Although the agency remains an independent business, they operate on a contractual basis, which means the client pays them to perform a service. That service could be:

• lead generation
• content marketing
• outreach
• campaign management
• strategy

…or even an entire sales development campaign.

As of 2022, roughly 18% of all FinTech spending goes toward outsourcing (of various kinds).

What does 'in house' mean in sales?

In contrast to outsourced sales, an in house team works directly for one company. They work exclusively for that organization.

This team is responsible for the entire sales process (including everything from prospecting and lead generation to closing deals and maintaining customer relationships), and operate within the company’s premises, being fully integrated into the company's culture and operations.

While around two-thirds of all U.S. companies outsource at least one aspect of their sales team, this statistic hides a secret: that number is significantly lower among small businesses. For smaller companies and startups, less than 24% outsource (whether through choice or lack of resources is up for debate.)

The pros and cons of in house teams vs outsourced teams

Now we're familiar with the different types of sales strategies, let's examine the pros and cons of each.

The benefits of outsourced sales

The outsourced sales industry is expected to reach a market value of around $6522.87 million by 2028. This figure alone speaks volumes: outsourcing sales is popular - really popular.

But what makes outsourcing an attractive choice?

1. Its cost effectiveness
2. To put it bluntly, outsourcing is generally cheaper. On average, a small business can expect to pay around $8,500 a month for outsourced sales (though this can vary a lot). In comparison, hiring in house could easily cost double that. And for FinTech startups, cost savings and cost efficiency are paramount.
3. Access to experienced professionals and established networks
4. Outsourcing offers access to ready-made sales teams. They've done killer lead generation, outreach, and appointment setting for many other companies, and can leverage their specialized knowledge to fulfill an entire project.
5. It's faster
6. Precisely because they're armed with all the tools and experience to hit the ground running, you'll see a much quicker ROI. Outsourced teams can start attracting qualified leads with operational efficiency to meet a tight deadline.

The drawbacks of outsourced sales

Outsourcing sales isn't without its disadvantages. But what are they?

1. Clients lack control
2. Although good sales development services work closely with their clients to fulfill their business needs, executives won't have direct oversight of their sales strategy. They give up complete control to a third party.
3. Lack of alignment
4. As outsourced teams are external, it's possible they may not align with the company culture (or, for that matter, other teams, such as the marketing team). Whereas in house employees are in the office space day in and day out, external teams aren't.
5. Potential communication challenges
6. Outsourced sales reps are distanced from in house operations - not to mention using separate software), so there's the potential for miscommunication.

The benefits of in house sales

Almost all FinTech starups hire in house to begin with. That's because in house teams have inherent control over the sales process during those turbulent early stages - not to mention an intimacy with the product or service which outsourced teams struggle to match.

But what are the main benefits of hiring an in house team?

1. Aligned with company culture
2. In house teams are much 'closer' to the core business strategy and, by virtue of being based in the office or part of remote teams, have a more intimate relationship with company values.
3. Fewer communication challenges
4. In today's age of advanced CRM and messaging software, in house teams are fully integrated, making direct communication much easier. In fact, successful sales teams are 81% more likely than ineffective ones to be consistently using CRM software.
5. Data security
6. Although third-party services like Leadium go above and beyond to secure client data, many companies prefer to maintain oversight over their confidential data.

The drawback of an in house team

Although in house development offers greater control and better alignment, it's important to look at their drawbacks, too.

1. They're more expensive
2. There's no getting around it: in house sales is more expensive. The average salary for one sales rep in the U.S. is around $60,000, but that number rises dramatically when you include other costs, such as training and equipment. In house development can seriously drain your in house resources.
3. It's a slower process
4. Not only do you have to go through the hiring process, but you also have to spend a great deal of time honing your in house team's skills. This long term commitment can slow down your sales process.
5. Difficult to scale
6. Outsourced teams are already 'at scale', with the technology stack and core competencies to fulfill your project requirements. In house sales teams, on the other hand, aren't. And if you're a FinTech startup looking to save money, scaling them can take a long time.

Key consideration for FinTech startups

Before making your decision on in house vs outsourcing, you'll want to consider a few factors specific to your FinTech startup.

For example:

1. Are you early-stage or growth-stage?
2. If you're an early-stage company, cost efficiency may be your primary concern, whereas growth-stage companies have higher investment.
3. What's your budget?
4. How much money do you have to spend on sales development?
5. What's your target market?
6. The specific needs of FinTech customers could determine the direction of your sales strategy.
7. How complex is your product/service?
8. Will an outsourced team be able to 'sell' your product or service the way an in house team could?

Wrapping up

Ultimately, the direction you choose to go in depends on many factors, and only many hours of number-crunching and careful consideration will make the decision for you.

But there are a few key consideration which should underpin your decision-making process. For example, you should consider cost - outsourcing is far cheaper than building an in house team. But in house teams are often closer to the company culture, whereas outsourced ones are less aligned. How much communication do you need between team? How secure do you want your data to be?

All of these factors, and more, will be central when making your decision. As always, our blog is a great source of help and inspiration when making difficult business decisions like these. Be sure to check out our latest posts on everything from lead generation and expert interviews to company culture and sales strategy. We're here to help.