Do You Know the Top Contract Sales Organization (CSO) Statistics?

Many companies in the medical sales industry experience significant difficulty in recruiting, training, and retaining sales teams. To address these difficulties, companies may turn to a contract sales organization (CSO).

What is a contract sales organization? Why would you partner with one? What are some statistics about CSOs in medical sales that you should know before working with one?

What Is a Contract Sales Organization?

A contract sales organization is a business that provides its clients with sales resources (mainly sales team members) to help them sell their products and/or services.

The specific services provided by an individual CSO company may vary based on their industry and overall dedication to providing quality service. Some contract sales services may specialize in simply providing “warm bodies” to help fill slots in the sales team quickly. Meanwhile, others may specialize in building long-term relationships with your customers to maximize the results per person—creating a more positive sales team experience for you and your customers.

Why Partner with a Contract Sales Organization?

There are several reasons to partner with a CSO, such as:

• To Save Time. Partnering with a CSO removes the burden of having to personally vet and train new sales team members. Instead, this responsibility can be left to the CSO—helping to save time so you can focus on other value-added tasks.
• To Save Money. The cost of employee turnover can be extremely high. According to sources like peoplekeep.com, “every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average.” Working with a CSO can help to insulate your company from dealing with the direct costs of turnover—and some contract sales services help to minimize turnover by hiring the right people and providing top-notch compensation.
• To Quickly Build a Sales Team. CSOs often have a large network of sales talent that they can use to rapidly fill seats in your sales team. They may also have a well-established recruitment process for attracting high-quality sales talent.
• To Improve Sales Team Scalability. Some companies may experience seasonal peaks and valleys in their sales activities. A part-time outsourced sales team is easy to add to or remove from as needed to meet demand for sales activity or to minimize costs.
• To Add New Perspectives. Contract sales organizations may have extensive experience in your industry that helps them identify winning strategies for selling your products and services. Using a CSO can help you access this knowledge so you can add these winning strategies to your sales team’s repertoire.

13 Statistics about Medical Sales and CSOs You Should Know

Before partnering with a CSO, it’s important to understand a few sales statistics so you can know what to expect and better interpret the potential benefits of contract sales. Here are a few important statistics about contract sales (and medical sales in general) that you should know:

1. Annual Temporary and Contract Staffing Sales in the U.S. According to Statista, the annual spend on contract and temporary staffing sales has grown from $68.73 billion in 2002 to $136.85 billion in 2019—a 199% growth rate.
2. Percentage of Medical Sales Outsourced. According to data cited by Science Examiner, in 2015, 11% of pharmaceutical sales reps in the U.S. were outsourced labor—up from 8% in 2011.
3. Cost of Sales Training. According to data cited by Fit Small Business, a typical one- to three-day workshop training seminar costs between $500 and $3,000 per seat—though costs can fall outside of this range for specific types of training.
4. Employee Skills Shortage. According to data cited by shiftlearning.com, “70% of employees report that they don’t have mastery of the skills needed to do their jobs” and “Only 12% of employees apply new skills learned in L&D [Learning and Development] programs to their jobs.”
5. Average Turnover Rate in the USA. Statistics cited by Leftronic state that the average employee turnover rate in the U.S. is 22%, and 15% of all turnover is voluntary. In 2016, AON reported that turnover for sales teams in the “Medical Device” market was at 14.1%, and at 9.4% for “All Life Sciences.” This beats the average across all industries, but still means losing, on average, at least one out of ten sales team members every year.
6. Ineffective Training Losses. Also according to the Shift Learning article, the total loss to a business from ineffective training is “$13.5m per year, per 1,000 employees.”
7. Total Nominal Spending on Medicines in the USA. As noted by Statista, the total nominal spend on medicine in the U.S. in 2019 was $511.4 billion.
8. Prospecting Is the Biggest Challenge in Sales. According to Spotio, 40% of salespeople say prospecting is the most challenging part of the sales process, “followed by closing (36%) and qualifying (22%).”
9. Email Communication Preference and Use. Another important sales statistic mentioned by Spotio is that “8 in 10 prospects prefer talking to reps over email, which matches up with the percentage of reps (78%) who use it.”
10. Cold Calling Prospect Reach. Prospects are becoming progressively harder to reach by phone. In 2007, it took an average of 3.68 cold call attempts to even reach a prospect. In 2013, it took 8 attempts. According to Small Biz Genius, in 2020, “it takes an average of 18 attempts before agents reach a lead who is willing to talk.”
11. Perceived Apathy’s Impact on Sales. According to statistics cited by everyonesocial.com, “In B2B, 68% of customers are lost because of indifference or perceived apathy, not because of mistakes.”
12. Average Customer Acquisition Cost. According to For Entrepreneurs, the cost of customer acquisition can “vary from around $400 to $5,000 per customer acquired, depending on the level of touch needed.” This cost statistic does not factor in the lost sales opportunities from losing a major account.
13. Number of Buyers in an Organization. Spotio’s article highlights that “In a typical firm with 100-500 employees, an average of 7 people are involved in most buying decisions.” More decision-makers working in tandem can make closing deals more difficult—which necessitates more skilled and experienced medical sales teams.

So, what do these statistics all mean? The increasing spend on and percentage of outsourced sales teams shows that companies in a medical or pharmaceutical industry are becoming more comfortable with using outsourced sales companies to meet their sales goals.

The ongoing skills shortage and cost of ineffective training statistics demonstrate that training is critical for medical sales, but the high potential cost of such training can be an inhibiting factor for many. This may be another factor driving the adoption of contract sales services, as CSOs can absorb the cost and time investment of training sales reps.

The statistics about prospecting, communication, cold calling, and perceived apathy all showcase how important it is for sales reps to understand how to build relationships. Cold-calling random phone numbers doesn’t always work because decision-makers now frequently screen their calls or have dedicated gate-keepers answer their phones for them to block cold calls. By building relationships, finding prospects’ preferred communication channels, and presenting themselves as caring about customers’ needs, medical sales reps can increase customer retention while improving sales results.

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