The Pros & Cons of Outsourcing Research Sales


Financial Research Solutions, a research sales firm, has released a new white paper examining the advantages and disadvantages of outsourcing the research sales function.  Financial Research Solutions is an outsourced sales firm founded by Will Richards, who was a successful salesperson for BCA Research during its hyper-growth period.  FRS currently has six in-house sales professionals.

Outsourcing sales

Outsourced sales firms typically work on a success-fee basis, which means they are paid when they make sales.  The obvious benefit to research firms is that this limits their downside, but it also means that the sales firms are selective in the research they agree to sell.

Partly this reflects the upfront investment that an outsourced sales firm makes when establishing a new relationship.  To effectively sell, it is important to understand the research which requires time and effort.  Also, outsourced sales firms frequently do more than just sell.  They often conduct marketing campaigns, handle invoicing & accounts receivable, and may even provide product fulfillment.


Because outsourced sales firms work on a success-fee basis, they incur expense before they see any revenue.  For this reason, most operate on a revenue-share basis, taking a percentage of revenue received from new clients they help bring in.  Because the outsourced sales firm is also involved in retaining the clients it brings in, the revenue share will usually continue for as long as the client stays with the research firm.

The revenue share for an outsourced sales firm is usually higher than the commissions a research firm would pay an in-house salesperson.  However, outsourced sales firms usually take on more than sales management, including marketing campaigns, mailings, and other lead generating activities.

Good salespeople easily command six figure compensation while sales and marketing infrastructure — such as a CRM system, prospect databases, travel costs — can be high five figures to low six figures.  For research firms with limited capital, outsourcing may be a better route than an inadequate internal effort or none at all.

Pros & Cons

The main benefit of outsourcing the sales function is to grow revenues without a major investment in in-house sales and marketing.  For research firms which have limited appetite or experience in managing salespeople, outsourced sales are generally a lower risk proposition than hiring and managing salespeople.  If the outsourced sales firm is not successful, there is no or limited payment whereas an unsuccessful salesperson is generally paid regardless.

The biggest sticking point for research firms is typically the revenue share, particularly the fact that the revenue share continues for the length of the client relationship.  Although partly an incentive to help retain clients, the revenue tail also reflects a payback to the outsourced sales firm for its initial investment in the relationship with the research firm.

However, the biggest issue with outsourced sales is that it requires a significant investment of time to be successful.  While less demanding than managing in-house sales, there still must be a commitment on the part of senior management and analytic staff.

Managing the relationship

Although outsourcing sales is less demanding than managing an in-house sales force, to be successful it requires proactive engagement from the research firm.  This is not just a function of time spent helping to close new business.  There is the initial product training required to make the outsourced sales firm effective in representing the research product.  It is also recognizing that the outsource sales firm brings insights into what clients like and don’t like that can yield improvements in how the research is generated or delivered.

Most importantly, although outsourced sales firms can bring a level of professionalism and sales management that is difficult to replicate internally, they are ultimately sales animals themselves.  This means it is important not only to listen and learn from them, but to seek ways to keep them excited and motivated about your research product.

The full 6-page FRS white paper includes more detail and additional topics such as when to outsource and how to evaluate an outsourced sales firm, and can be viewed at  Additional questions can be directed to author Will Richards at 514.849.1991 or


About Author

Will Richards founded the Research Alliance in 2006 ( to help boutique research firms meet their business development goals. In addition to over two decades of experience in sales and marketing, Will has extensive experience in selling independent financial research to institutional buy-side clients in the US, Europe, and Asia. From 2000 to 2004, Will was a key member of the team at BCA Research that developed a systematic sales process for opening new accounts and managing relationships with institutional buy-side clients. Will holds a Bachelor of Arts from McGill University. Will Richards can be reached at or 514-849-1991.

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