Sales Development: What’s the right formula for my company?

Since SiriusDecisions introduced the concept of tele-prospecting into their demand waterfall, companies have started to take a closer look at building an inside sales competency. Sales Development (SDRs) teams started forming in companies of all sizes with the expectation that this function will help bridge sales and marketing in the demand generation process, as the link that qualifies marketing leads and nurtures potential opportunities.

Although the business rational makes sense, in reality sales development teams or demand centers are not often delivering the expected results. Here’s what I have observed:

SDRs are not tightly connected to the marketing process

In most organizations, the SDR role reports to a sales leader who is tasked with training and managing the team, and is expected to meet quotas and performance metrics. This ‘reporting to sales’ state of mind neglects to maintain a tight relationship with marketing leadership, essentially disregarding marketing’s influence and need to be part of the process. Consider: Wouldn’t close contact and a consistent flow of closed-loop feedback to marketing help create better, more qualified leads to follow up on?

The result is an SDR team struggling to engage and qualify thousands of MQLs, in the hope of converting a very small % into SQLs/SALs.

SDRs are pulled into administrative tasks, ultimately not focusing on prospecting

The job of your SDRs is to handle the front end of the sales cycle. If they do their job well, other salespeople who are specialists in closing can handle the rest. Unfortunately in many organizations SDRs are being given tasks in support of the more specialized sales reps. I’ve witnessed first hand an organization where SDRs were ‘assigned’ to 2–3 sales reps. The goal was to have a specialized sales rep supervise their prospecting efforts, and to be able to better manage quota achievement if the two functions collaborate closely. In reality, SDRs were expected to handles quotes, engage in customer research, help with forecasting etc… Prospecting was about 50% of their daily tasks.

SDR teams don’t scale up or down based on the business realities

In essence, SDRs are headcount with all the costs and administrative burdens that come with employing people in your company. It’s hard to scale up because team leaders must go through the formal hiring process with an average of 3–5 months before a new SDR is hired. Add to that training and on boarding time (another 1–2 months), and you have a minimum of 5 months before an SDR is up and running. If you identified the need to scale in January, you will not see business results before July or August. Scaling down is also an administrative headache that can cost a company as much as a full year’s headcount according to our recent research.

The digital marketing revolution created unforeseen complexities

We LOVE the digital marketing revolution. Never has there been so much data and insights to produce from marketing initiatives. The ability to use the data to create an integrated customer experience across mediums and channels while delivering relevant content is priceless. Nonetheless, have you seen the size of your marketing organization lately? What percentage of of your marketing budget goes to ‘operations’ and what percentage goes directly to creating demand? Martech is helping to optimize B2B marketing, but it has also added unforeseen complexities. the average marketing automation deployment may take 2–3 months at least for a small organization. head counts went up… the impact on SDRs is huge. A large volume of leads is delivered to them on a daily basis, clogging their cues and distracting them from true prospecting.

Companies are starting to realize these factors can potentially decelerate business, rather than accelerate it. We are starting to see a trend of refocusing efforts within the organization, making a point of building core teams and outsourcing other tasks to specialized agencies or companies to extend the core team’s capabilities or load balance efforts and resources.

Some of the models we’ve noticed:

  • Core strategic marketing team, outsourced automation and content creation.
  • Core specialized sales team, outsourced sales development.
  • Core sales development, outsourced SDRs for scale and marketing & sales campaigns
  • Core sales development, outsourced training and staff development
  • Core demand generation team, extended by outsourced marketing qualification team to develop sales ready leads

We look forward to tracking these new trends. Whatever your organizational model, explore how REDHOT can help you accelerate demand and opportunity generation here.

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