Business development
What a UK service firm should expect from outsourced business development
Hiring, retaining a supplier and paying on results each put the risk of winning new work in a different place.
Business buyers now use an average of ten channels to deal with a supplier during a purchase, double the five recorded in 2016, according to McKinsey's 2024 survey of nearly 4,000 business decision makers in 13 countries.
The same survey found that at any stage of a purchase about a third of buyers want to deal in person, a third want a phone or video call and a third want to serve themselves online. McKinsey says the pattern holds across countries, industries and company sizes. The figures are global, and the article gives no UK breakdown.
A service firm that has grown on referrals and its partners' contacts reaches buyers through a small part of that spread, and it cannot control when a referral arrives. Wider and steadier coverage takes hours that partners with fee-earning work seldom have, and a single hire struggles to supply it, which is why established firms look at outsourced business development.
Business development for professional services firms concerns the largest industry group on the business register: the Office for National Statistics counted 2.73 million businesses registered for VAT or PAYE in the UK at March 2025, and professional, scientific and technical firms made up 15.3% of them.
An outsourced arrangement covers the front part of a sale
Outsourced business development covers the work that comes before a first meeting. The firm and the supplier agree which organisations the firm wants as clients. The supplier then builds the list, makes the approach, qualifies the people who respond and hands over an introduction.
The supplier's work ends at that handover. The firm's own people run the meeting and write the proposal, and winning the work stays with them.
A commercial cleaning firm, for example, might receive the name and direct line of a facilities manager who is reviewing suppliers before a contract renewal, with a note of the current arrangement and a time agreed for a call. A handover of that quality lets the cleaning firm's director open the conversation without asking the buyer to repeat anything.
Each of the three ways to add capacity puts the risk somewhere different
A service firm that wants more new business conversations can hire, retain an outside firm or pay a supplier on results.
A hire is a fixed cost from the first day. For a benchmark, the ONS put median annual earnings for full-time employees across all occupations at £39,039 in April 2025, up 4.3% from £37,439 a year earlier, which shows the general level a salary offer competes with and is no measure of business development pay.
Employer National Insurance, pension contributions, a recruiter's fee and a partner's time spent managing the recruit all sit on top of the salary. A new recruit needs time to learn the firm's offer before producing much, and a wrong appointment costs the firm the salary paid and the time lost. In return the firm gets someone who works for nobody else.
A retainer is also a fixed cost, with a shorter commitment. The firm pays a monthly fee for an agreed level of activity and can leave on the notice period in the contract, which is a lighter exit than ending an employment. The risk that the activity produces too few introductions stays with the firm.
A results-based arrangement, known as pay per appointment or pay per lead, moves that delivery risk to the supplier, who earns a fee only for each appointment or qualified lead delivered. A supplier carrying the risk has to price it in, so each introduction is likely to cost more than it would under a retainer that performs well.
Deloitte's 2024 global outsourcing survey of more than 500 business and technology leaders reports that organisations are turning to outside providers for front-office work such as sales and marketing, alongside the back-office work that is still commonly outsourced. The finding is qualitative, global and weighted towards large organisations, and it does not cover UK service firms specifically. The same survey notes that bringing work back in-house is also rising.
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The fee model shapes what the supplier does
A retainer pays for activity, a fee per appointment pays for meetings in the diary and a fee per qualified lead pays for introductions that meet agreed criteria.
The supplier on a retainer receives the same fee whether or not the calls lead anywhere, so the firm needs to see the activity and judge its quality. Under a fee per appointment, a meeting with a curious junior earns the supplier as much as a meeting with a budget holder unless the contract says otherwise. Where the fee is paid per qualified lead, the supplier will work to the letter of the agreed criteria, so the criteria need careful drafting.
The definition of a qualified lead or a valid appointment therefore belongs in writing before work starts, together with the procedure for a disputed one.
The research for this article found no independent UK data on what outsourced business development costs or delivers. Every price it turned up came from an agency or vendor describing its own services, so none appears here.
Deloitte's survey does report that outcome-based models have grown in use across outsourcing generally, as buyers favour relationships tied to results. It attaches no percentage to the trend.
The first quarter of outsourced business development is mostly groundwork
The firm and the supplier begin by agreeing the target profile, and the supplier builds and checks the list against it. The first approaches then test which message gets a response.
Those first conversations also tell the firm how the market sees its offer. A managing partner may learn that buyers describe the firm's specialism in different words from the ones on its website, or that a service the firm treats as secondary draws the most interest. That information has value before any work is won.
A supplier's estimate of meetings in the first quarter is a forecast, and the buyer has no independent benchmark to test it against.
The firm's own side decides much of the outcome
A loosely defined offer gives the supplier nothing precise to say, and the people approached cannot tell why the firm is calling them. The firm also has to follow up promptly, because a buyer who agreed to a call may have spoken to other suppliers by the time the firm rings several days later. A firm with no spare capacity cannot take on the work it asked for, which wastes the introduction and the buyer's goodwill.
Every call and email goes out under the firm's name, so a poorly judged approach reflects on the firm.
Deloitte's survey recommends that buyers of outsourced services widen their supplier-management function, because the arrangements have become harder to manage. The survey's respondents were weighted towards large organisations. On this article's reasoning, a small firm's equivalent would be one named partner with time set aside each week to review the supplier's work.
Five points are worth settling before signing
The same points apply whether the firm pays a retainer or a fee on results.
The contract should state who owns the data and the contacts when the arrangement ends.
It should set out how the supplier qualifies each introduction and what evidence comes with it.
The supplier should disclose whether it works for a direct competitor in the same area.
The firm should know what the supplier reports and how often.
The notice period should be agreed with the cost of a poor first quarter in mind.
More than half of the buyers in McKinsey's survey said they want a joined-up experience across channels and are likely to switch supplier if they do not get one.
