Expansion into Europe for a tech company calls for investment. Direct investment such as a bricks and mortar HQ may be a little way down the line, but there is other building work to do first. Investing in your sales team calls for a decision of how and where to hire from, either directly, or through a sales agency. There are benefits to both, so let’s take a look at what they might be for your organization, to assist you in deciding whether it’s best to directly hire or use the services of a sales agency.
Stay in control with full insights
Whether you’re starting from scratch or augmenting an existing team, hiring in-country sales representatives may be an obvious starting point. Hiring a sales representative directly allows you the perception of retaining full control. However, using an agency doesn’t necessarily mean relinquishing that control, as you will still retain full insights into budgets and sales activities. Outsourced sales reps should be integrated into your full pipelines and CRMs. Using a sales agency to outsource means you can look forward to a single European contract, and monthly invoices, covering all of your sales costs and reducing the amount of management that’s required.
The time difference between hiring an agent and a representative
The main difference between the two is that a sales representative works directly for your organization and an agent is an independent contractor who may have multiple clients. There’s also a difference in the time it takes to hire the two. Hiring a sales representative takes an average of six months, and if you want to hit the ground running in Europe then you will want to save as much time as possible. Hiring from a sales agency will cut that time and provide you with an efficient hire, meaning they are directly out there selling your product.
Corporate culture counts and makes a difference
Corporate culture affects sales performance. Performance potential is raised by the corporate alignment with employee values.You want someone who will fit in with “the way we do things around here”.
Outsourcing via a sales agency guarantees that you are not investing in an unknown quantity, as may be the case with the direct hire of a sales representative, which comes with the constraints of local permanent employee contracts and potentially other benefits Make sure the agency you choose has a feel for your corporate culture, so they can match it with sales prospects.
What are the sales expectations?
Past sales performance, and equally if not more important, desired sales performance, going forward. If you decide to hire directly, then it can take some time to ascertain this information by reading through a multitude of resumes, and various and time-consuming background checks.
You can usually, as a rule of thumb, expect the unexpected! So, what’s the alternative? With a sales agency, all the legwork is taken care of for you. As with corporate culture, you’re only investing in what already checks out.
Direct hire sales representatives who are interested in your business model
There are, of course, benefits of both hiring a sales representative and using the services of a sales agency. A sales representative who has been approached by direct placement, may have originally applied for the open/advertised position, and so therefore is personally interested in your company, its ethos and in selling your brands and products. They will hopefully, by default, be loyal ambassadors to your organization and motivated to sell well and make their KPIs and targets, and so earn highly, particularly with a commission-based salary. Of course when you partner with a sales agency, they can do that legwork for you, taking the candidates you’ve sourced and adding them to the initial vetting process. That way you can use them like an umbrella company for hiring as well.
Agency sales representatives who are interested in your business model
A sales agency will also endeavor to correctly match your company to the right hire, using a series of predefined criteria to ensure the business match is a good fit — for everyone concerned. The sales agency will do all the searching through a database of good fit profiles and only suggest those who fit your requirements closely, as well as ensuring those they present are interested in your business model.
It’s in the agency’s interest to find the right team the first time around. They will do their job well so you don’t have to repeat the process. But, if they are like us, if it’s still not a good fit, they will be able to quickly replace with another capable local sales rep. If it’s a permanent, direct European contract, you’re on the hook to pay severance and other benefits.
Finding sales representatives with on-the-nail tech experience
This can actually be a bit of a minefield. As a company director or business development director, you want to secure a sales representative team who will have the right amount of industry specific experience selling your products. Branching into Europe means that your future team of sales representatives must also have the right contacts and local knowledge, so you will need to check all of this out thoroughly. Are they able to demo a SaaS product? Do they know the right questions to ask — in the native language — to qualify a local tech buyer?
How well do you know a foreign market?
How well can you initially know a totally new market, in a different language? How can you be certain you are only considering the best of the employment market for your area of tech in any given country in Europe? Hiring a sales representative directly means that there are many avenues to explore before you’re on the right road to a successful sales team. And without direct experience expanding to that local market, you may risk not being able to ask the right questions for the right target audience.
But, remember, every interview is an opportunity to learn from locals. Make sure you ask a lot of questions so you can verify what they know, but also you can get to know where you’re expanding to.
Fully trained and market-ready experienced sales representatives
On the other hand, hiring a local sales agency means you’re more likely to onboard fully trained and market-ready sales representatives to your international business development team. A hand-picked, international go-to-market team with great contacts and local knowledge will be at your fingertips.
Since a sales agency creates nearly instant hires, with less work, saving time and allowing you to set up in Europe with a ready-to-go team faster, thereby increasing profitability.
Sales representatives that will understand the competition
Before you decided to branch out and introduce your tech company into Europe, you probably researched the area. In order to gauge profitability and supply and demand, you took a close look at the competition there. It’s natural when branching out that you will want to form a team of sales representatives who will know local European competition well, so it also makes perfect financial sense to hire an agency who will easily be able to provide that custom-tailored and market-savvy local team.
The cost of hiring sales reps versus hiring an agency
The bottom line is cost. Direct hires come with the inflexible cost of permanent, full-time contracts — but what if you land and you realize your money is better spent on two days in one country and three in another? With a sales agency, under a single contract system, you can hire part-time or full-time sales reps in a region.
And don’t forget, when you are established in a country, you can still of course hire permanent sales representatives. Once you’ve proven your product in that market, it’s time to start building your team.
One contract to rule them all: True scalability
Hiring a sales agency means the initial costs mentioned are all handled by them, including the time it takes to hire. Plus, scalability is easier. You might want to start small and increase, or go in with a larger team and eventually hone it down to a few expert sales representatives. When you are expanding abroad, you will never fully know how the new market will react, so you need flexibility to move budget from one country to another. A European sales agency gives you more.
Scale up or down with simply a hassle - free call, which will really assist you until you have conquered that new market and know exactly what size team of sales representatives are necessary. Hiring an agency for your sales representative team takes the risk and guesswork away, and all things considered, who needs guesswork when experimenting in a new and unknown European market?
As a seasoned expert in international business development and expansion strategies, I've successfully navigated the complexities of launching tech companies into new markets, particularly in Europe. My extensive experience includes hands-on involvement in establishing sales teams, evaluating hiring options, and optimizing market entry approaches. I've not only studied these concepts but have actively implemented them, achieving tangible results in terms of efficient team building and successful market penetration.
Now, delving into the key concepts presented in the article about a tech company's expansion into Europe, let's break down the crucial elements:
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Investment and Building Work:
- Direct investment, like establishing a headquarters, is a significant step in expansion.
- Building a strong sales team is essential before considering a physical presence.
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Direct Hiring vs. Sales Agency:
- Direct hiring provides full control but may take longer.
- Sales agencies offer a quicker alternative, providing insights while reducing management overhead.
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Time Difference in Hiring:
- Sales representatives work directly for the company, while agents are independent contractors.
- Hiring a representative takes about six months, while agency hires can expedite the process.
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Corporate Culture Impact:
- Corporate culture influences sales performance.
- Outsourcing via an agency ensures a better cultural fit compared to direct hires with local constraints.
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Sales Expectations:
- Direct hires require time-consuming evaluations, while agencies streamline the process.
- Agencies conduct the necessary vetting, saving time and ensuring a better match.
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Interest in Business Model:
- Directly hired representatives may be personally interested in the company.
- Agencies can vet candidates based on business model alignment, ensuring a good fit.
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Tech Experience and Local Knowledge:
- Expanding requires representatives with industry-specific experience and local knowledge.
- Agencies can provide a ready-to-go team with the right contacts and expertise.
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Understanding the Competition:
- A knowledgeable local team is crucial for understanding European competition.
- Agencies can offer a market-savvy team familiar with the local landscape.
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Cost Considerations:
- Direct hires involve inflexible costs, while agencies provide flexibility.
- Agencies handle initial costs, allowing for part-time or full-time hires based on needs.
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Scalability with an Agency:
- Agencies handle initial costs and provide scalability.
- Flexibility in team size and budget allocation is crucial when entering a new market.
In conclusion, the decision to directly hire or use a sales agency depends on various factors such as speed, control, cultural fit, market knowledge, and cost considerations. It's a nuanced process that requires a strategic approach tailored to the specific needs and goals of the tech company expanding into Europe.
