The Rise of Sales Development
Part 1 of 3 in our sales development series
“The sales development team is the most important sales process innovation in the last 10 years.”-David Cummings
Sales development has been around for a while now, but if you’re new, we wanted to give you an overview of its history and what it is today.
Let’s start off with quickly defining what Sales Development is. Sales Development is the process that entirely focuses on the front end of the sales cycle (or top of the sale funnel). This includes everything from making outbound calls and emails to setting qualified appointments, all the way up until the demo.
The pioneers of sales development in the 1980s were lead by trend-setters such as Oracle, which was one of the fastest growing companies during that era. Other companies, like SalesForce (started by a former Oracle executive) quickly followed suit and put an emphasis on using technology to sell. But with the dotcom crash and financial crisis of the 2000s, progress in the space came to a grinding halt and few advancements were made.
However, in the last few years, we’re seeing another major movement. Technology is transforming the traditional sales process. A new paradigm for prospecting and qualifying leads is emerging. Combined with data analysis, auto dialers, informed research, drip campaigns, email tracking, and automated database management, this new approach is the perfect marriage of technology, process and people. It is known as “sales development.”
Software is Eating Sales
Software is indeed eating the world, and sales is right there on the menu too. New technology means new roles, new rules and new resources.
Ken Krogue, founder of Inside Sales, says, “Companies realized that they could be more leveraged if they broke the sales roles into closers and appointment setters.” Taking this approach, they saw their close ratio jump from 10% to 17%.
The key to their process is role specialization. The “appointment setters” that Ken is talking about are often referred to as SDRs (Sales Development Representatives) or BDRs (Business Development Representatives), and are often responsible for reviewing, initiating contact, and qualifying leads before being handed off to the closer. The “closers” that Ken mentions are often called AEs (Account Executives). They are primarily responsible for giving demos or consultations and negotiating contracts, however they are not technically part of the Sales Development process.
Account Executives have been around nearly since the beginning of sales development, but the interesting evolution has lead to the rise of the SDR.
If you have a look at Google Trends, you can see that the term “sales development representative” broke into the scene no more than two and a half years ago.
The use of prospecting tools and setting meetings has become a skill in and of itself; and thus the role of the SDR was born.
To quickly recap: a lead comes in; the SDR qualifies the lead and sets a “sales qualified meeting” with an AE; the AE gives a demo, consult, etc. and closes the deal.
Leads, Leads, Leads
You may be wondering where leads come from before they’re handed off to the SDR to qualify. There are two ways to get leads: inbound and outbound.
Outbound is anything that involves a sales representative directly reaching out to a prospect who has not yet schedule a demo. This could be done through manually searching for potential buyers, often called prospecting, and then calling or emailing prospects.
It guides you through prospecting and personas, a profile matrix, how to build a prospect list, how to research and prepare, how to craft your outbound plan, and how to execute.
Though not all are mutually exclusive, prospecting tools live at the very top of a company’s sales funnel, and include tools like the following:
Another option is to buy lists of pre-qualified prospects from a list broker. This gives you the advantage of time and quantity, but it often comes with price. Quality varies from source to source, but if you have the money it’s often a viable option. Once you have your list of 1000+ prospects, it’s time to scrub the list and prioritize high probability prospects to reach out to first.
Here is a short list of lead generation sources:
Of course, there are many ways to generate leads and a big part of your lead gen strategy will depend on your target prospects.
Inbound leads usually come from marketing activities that earn the customer’s attention rather than buying it (i.e., direct mail, radio ads, TV commercials, sales flyers, spam, telemarketing and traditional advertising). Inbound marketing is usually done through blogs, podcasts, video, e-books, newsletters, whitepapers, SEO, social media marketing, and any other form of content marketing.
Sales and Marketing Playing Nicely
Traditionally, marketing teams and sales teams have not always seen eye to eye. Mark Roberge puts it well in his book The Sales Acceleration Formula: “Marketing sits in one corner of the office, harboring the perception that the sales team is a group of overpaid, self-centered brats who fail to see the big picture strategy. Sales is in the other corner of the office thinking the marketing team sits around doing arts and crafts all day, and has no idea what qualified leads look like.” Obviously, this is not good for the bottom line.
This may happen because marketing is often measured (and compensated) on total traffic to the site, while sales is often measured on metrics like deals closed or meetings booked. With more traffic, the risk of having a larger number of less qualified leads increases. You can see why the two teams get along like cats and dogs. Though they may be at odds with each other, they’re forgetting that in the end, they’re on the same team. The question is, how do you get them to act like it?
Roberge advises for an SLA (Service Level Agreement), which is meant to establish similarly quantified agreements between the two teams and aims to put them on similar revue quota. Establish an SLA that defines what a qualified lead is, when that lead should be passed along to the sales team, and how the sales team then goes about contacting converting the lead. This way sales is accountable to marketing just like marketing is accountable to sales. Roberts further recommends sending out daily reports to keep each team motivated and on track.
In this post, we’ve covered a brief history of Sales Development, the specialization of the SDR and AE roles, how to get inbound and outbound leads, and finally how to get your sales and marketing teams on the same page with an SLA.
Next, we need to answer some of the most common questions around Sales Development, such as “what is a sales qualified lead?” “When should an SDR pass a lead off to an AE?” and “How should Sales Development teams be compensated?”
If this is your first time diving into sales development, it can be a lot to take in. I want to give you some time to digest all of that information before we move on.
In part 2 and 3 part series on sales development, we’ll continue talking about how to build your sales development team and cover everything from training and hiring to metrics and best practices. Stay tuned!
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