May 27, 2021
Top Tips for Building Successful SDR Teams
Sales development is essential to an efficient revenue organization. We spoke to sales leaders to understand the core components of a successfully functioning SDR team. Here are our top takeaways from those conversations.
1. Sales and Marketing – Aligned to Achieve
The importance of aligning your sales and marketing teams cannot be overstated. The leaders of these two departments are constantly executing campaigns that need to tie together and when they’re working in lockstep the sales development team works most efficiently.
To get in sync, it helps to focus both teams on the same target. More often than not, this will be on growing revenue. Start with a revenue target and work backwards to create more granular goals – i.e. how much pipeline do you need to cover that? How many SDR first meetings? How many MQLs to deliver those BDR meetings? And so on.
Once you have your goals laid out, the next item to agree on is the lead scoring methodology. Where this becomes especially important is the hand-off of marketing qualified leads (MQLs) from marketing to the SDR team. Your SDRs’ success is based on how crisp your MQL definition is and how your organization mobilizes around it.
Leads are typically scored in two ways:
- Fit: How well the lead matches your ideal customer profile
- Engagement: The level of interaction with your content
Those two scores combined determine which leads pass to the sales development team as leads.
The cost of prematurely calling a lead is usually lower than missing the chance to reach out to a qualified prospect. That’s why it’s an approach that sets your MQL threshold a tad lower and biases towards more SDRs will pay dividends in the long run.
A lead score doesn’t need to be set in stone and often works best when there’s a regular cadence for bi-directional feedback. That way, the SDR team has a productive outlet to discuss lead quality and marketing can monitor follow-up time and follow-up content.
Barrett Louie, Head of Global Marketing at RiskIQ, explained that a weekly lead review meeting works well to align the go to market teams. In the meeting, the company’s revenue leaders gather to review the previous month’s leads, opportunities and campaigns. Similar to a sales forecast meeting, this gives both teams visibility to continually review what’s coming in and where you’re seeing traction.
2. SDRs in Marketing or Sales?
An age-old question is whether SDRs should report to marketing or sales. The answer (unfortunately) depends on the organization.
Research shows that more often than not, SDRs report to sales but top-performing SDRs perform more or less the same whether they report into marketing or sales).
In the early days or in a high-growth phase, installing the SDRs under marketing can drive quicker sales and marketing alignment. This gives the team more transparency into MQLs through the pipeline which is so important to quickly iterate and refine the process. Putting marketing in charge of sales pipeline development can also reduce any friction around following up on marketing leads.
These questions can help guide your thinking:
- How is your organization prioritizing inbound vs outbound? Marketing will naturally prioritize the former and sales the latter.
- Which leader has the expertise and character to work with the SDR team and prioritize their personal development?
- Which leader has the expertise to solidify the SDR team’s lead qualification strategy and SLAs?
- Who has the budget to hire a full time SDR manager?
These questions are important to ask when considering which function has the highest probability of developing a successful group of sales development reps that are nimble and hungry.
3. Hire Smart and Start off Strong
The number of SDRs you hire depends on the average number of leads each SDR is expected to handle which is ultimately driven by your pipeline goals and the level of automation in your outreach process.
When you’re hiring SDRs, don’t be afraid to look for some fresh faces. Some of the most successful SDRs join our companies straight out of school. We heard that competitive, trainable communicators, with high EQ make great SDRs. Make sure to screen for strong time management skills and a stomach for rejection too.
A natural next step for many SDRs is an account executive or account management role, so it’s a good idea to look for people who could grow into those roles.
Once you hire your rep, keep in mind these three rules:
- Set weekly activity goals: Whether it’s number of dials, number of emails sent, or talk time minutes, SDRs need clear quantitative goals to hit. Especially if they are young and new to the role, they will value the guardrails and it will help them understand the measure of success.
- Standardize your outreach sequences for both phone and email: Lots of sales leaders we spoke with are big fans of the Agoge sequence by Sam Nelson, which is a structured outreach sequence with proven penetration results.
- Get them on the phone fast: We would suggest doing a role play in the final stages of the interview process and many more during the onboarding process. Tools like Chorus will help your new reps to ramp faster by reviewing successful calls by their peers.
4. Keep SDR Compensation Plans Simple
When it comes to compensation, we typically see plans based on meetings completed, revenue generated or opportunities created. Sam Nelson, SDR Leader at Outreach.io, gave us one piece of advice: keep it simple.
We heard that incentivizing SDRs on opportunities created is a very common approach and optimizes for the quality of opportunities being passed onto the sales team. Comping on meetings completed can lead to lots of low quality meetings, whereas targets on revenue can be demotivating as SDRs have little control over the rest of the sales process. Opportunities created strikes a balance between the business’s top line performance and what SDRs can control.
- Keep it focused: Ideally you can tie your comp plan to one target. Any more than two will get too difficult for your team to prioritize their activity.
- Align your targets: Align your comp structure with pipeline or revenue generated.
- Make it easy to understand: SDRs should understand how they get paid without spending more than a second thinking about it.
- Make it timely: Motivation is most powerful when the benefits are received in the short term. Try to keep the time between activity and compensation to within 3 months.
Though the targets you set will depend on your go-to-market motion, it’s important to think through the different behaviors you might drive through your compensation plan.
Overall, we heard that incentivizing SDRs based on activity metrics leads to a focus on quantity over quality. Despite that, measuring activity—call time, number of dials, emails sent, and lead follow up time—will provide valuable insights to your sales leadership. Outreach.io, Salesforce etc. are great tools to enable your SDR manager to monitor these key metrics at a rep level. Managers can also review and discuss activity volume in their 1×1 meetings.
If you do want to drive specific activity metrics to meet short-term sales needs and goals, SPIFs (sales performance incentive funds) can work well. It’s worth noting though that the wrong SPIF structure can encourage sandbagging or competition that gets toxic.
By using meetings completed, revenue generated or opportunities created as the key compensation metric, you’ll strike a better balance between quantity and the effort and personalization that goes into each outreach.
5. Sell to Everyone, Close no One
The next handoff you’ll want to lock down is from the SDR team to their account executive (AE). A strong working relationship between the SDR and their AE is fundamental to the successful flow of your pipeline.
The foundation for a good relationship rests on aligning the two teams on the minimum criteria required for handing off leads from sales development to sales. When this is overlooked, you open yourself up to two undesirable scenarios. Either low quality leads move through the funnel which means resources are burned and deals are lost, or you end up losing a deal that could have been winnable. Like with MQLs, it’s critical that defining an SQL is a collaborative process between the two teams to make sure both are bought in and understand what’s most important.
- Does the account fit your company’s ideal customer profile?
- Is your contact one of the stakeholders involved in signing off on the purchase?
- Does the prospect have a clear business pain you can solve?
- Does your prospect have actual intent to buy and what is their timeline?
According to research from CEB, it now takes an average of 5.4 people to make a buying decision, so the “ultimate” buying authority could lie with more than one person. A healthy opportunity is one where all relevant stakeholders are engaged early in the process.
(Don’t disqualify a lead if their timeline is not in the short term, this should go in nurture and not be disqualified).
Remember, disqualifying leads isn’t a bad thing. The quality of the leads your team is working on should matter more than the quantity. It’s far better to spend precious time on a few strong prospects than spreading yourself thin across lots of questionable quality leads.
6. Motivate, Motivate, Motivate
Sales development can be a tough gig. Every SDR will face constant rejection. They will look to their leaders to maintain high-energy.
Great SDR leaders are great coaches and carve out time every week to coach their team. Coaching can have a profound impact on driving good SDR behaviour. Here are a few tips to consider to coach your team:
- Create a library of resources with scripts and sales enablement material.
- Find out what motivates each individual on your team as a part of your onboarding process.
- Record sales calls and give feedback. Chorus.ai has been an invaluable coaching tool for the SDRs at Georgian’s companies.
Finally, think about your team’s long-term development so they can see a career path ahead of them. Clear performance and development plans with an attainable path to promotion can motivate SDRs to perform at their highest level.
The SDR team plays a vital role in a healthy pipeline, connecting marketing to sales and helping the sales team to focus on the best, highest-quality opportunities. I hope the tips in this blog have been useful to you as you set up your SDR function. If you have any questions or would like to discuss anything SDR-related, please connect with me or Conor Ross.
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