Same Old Song and Dance

Early-stage B2B revenue leaders often need to decide whether to start an SDR teams. The benefits can be massive if done correctly; SDRs teams are a Top 3 source of closed won deals for some companies.  However, even after choosing to move forward, the pain can be thunder when faced with setting up and running the team.

This series gives Revenue leaders the basics if they wanna be startin’ somethin’ with sales development.  For the sake of simplicity, all references to individuals doing dedicated outbound outreach will be based on the word “sales”: sales development representatives, sales dev, SDRs.

First, you’ll need to weigh the costs and returns, and consider creating the team internally versus outsourcing (covered in Part I of the Sales Dev series).  If you choose to move forward, the next step is to determine how you’ll set up the team. 

Part II of the Sales Dev series covers variable pay, management, and what to call your team.

A Change Would Do You Good:

Afraid of getting stuck in the middle when setting up your team?  Make sure you spend some time thinking through a few things:

• Variable Pay: Like sales reps, SDRs receive variable pay for performance.  We’ll cover how to tie pay to specific goals in Part III of the series.  Before that, you’ll need to determine how much variable pay to set aside out of an SDR’s on-target earnings, or OTE—the total amount (base plus variable) that an SDR could make at 100% attainment of goals.  We recommend targeting a base-to-variable split of anywhere between 70/30 and 50/50.  Any lower than 30% variable and the financial incentive isn’t there to drive results because the base is too high.  Any higher than 50% and the base is too low to cover the many background tasks that SDRs often take on.  Not to mention that a variable split that high creates undue pressure on SDRs and sales reps to push unqualified meetings and deals through to “toss the SDR a bone”.  That won’t boost your reps’ pipeline the way you want.

• Management: SDRs need to report to someone, receive coaching, and be held accountable for results. Too many revenue teams leave this as an afterthought and then wonder why results don’t align with expectations.  Remember that you’re bringing on entry-level hires who have no experience working in a high-rejection, external-facing, big impact role.  SDRs don’t necessarily need a dedicated SDR manager from the start, but they do need direct management from someone.  Designate a member of the team to take on this responsibility.  Note: Whether the role sits under Marketing or Sales depends on a variety of factors, to be covered in Part IV of this series.

• What to call your team: There is often debate within revenue teams about what to call the outbound outreach team.  You may have run across many acronyms for the role, including SDR, BDR, MDR, and ADR.   It’s true that there are subtle differences between these.  MDRs (Marketing Development Reps) might spend most of their time qualifying inbound leads versus finding and reaching out to cold prospects (SDRs, BDRs). ADRs (Account Development Reps) could have a specific account-based (ABM) focus.  Ultimately, it’s more important to define their responsibilities and goals than to worry about what to call them.  Any of the options will work fine.

• Tip: One of the best reasons for creating an internal SDR team is to start a sales talent bench.   Be realistic about the progression from entry-level salesperson (SDR) to sales rep.  If you sell in a complex environment (expensive solution, multiple decision-makers, lengthy deal cycle, complicated value proposition) it may difficult to bridge the capability gap during an SDR’s typical tenure of 15-18 months.  Consider creating meaningfully progressive roles and experiences for promising SDRs, such as sales rep mentorship, smaller deal ownership/ride-alongs, inside sales, team leadership, etc.  Without these career-enhancing opportunities, your best SDRs will be much easier to poach by companies who do offer them.