Rethink SDRs: Your Future Depends on ItArticle by Colleen Francis, December 2, 2019
There’s a disconnect between the future of sales and the current popularity of two-tiered sales structures that include sales development reps (SDRs) combined with field reps. I touched on this in a recent article: let’s now explore that point in more depth.
The future of sales means fewer salespeople, greater hybridization of skills and a much more well-defined focus on what they are there to do. SDRs are no exception. Those positions are effectively your front line in today’s marketplace. They’re the first to engage your prospects, introduce them to a new way of doing business, and identify qualified leads.
So why in the world would you entrust all of that to your lowest paid, least experienced sales staff where turnover rates are significantly higher than industry average?
Understand what’s really at risk.
In a word, engagement. If you currently have a two-step sales process with an SDR team, it means your prospects spend more time on the phone with more people and risks imposing a slow cumbersome hand-off process. It also means prospects are answering the same questions repeatedly. It stirs disengagement with even your most eager prospects. It’s also wasted time that could otherwise be spent showing prospects how you can add value to their organization.
Disengagement hurts your organization because your team and your pipeline lose momentum. Junior level SDRs don’t have the experience or authority to engage decision-makers meaningfully. That’s why my colleague, Dave Brock, says: “If SDRs are supposed to get customers to think differently, challenge their current way of thinking and suggest changes to their business practices: do we have the right people doing the work?“
Let’s also talk about costs that are at stake. Why do you choose to continue to pay two people to find and qualify a lead when you’d accomplish more with one smart hire at the SDR level? That’s what one of my clients discovered when they did the math:
We calculated the speed and costs of getting to $1 million in revenue in each territory and found that with an SDR it was costing us (roughly) $50k in SDR salary plus $150k in field-sales salary. And it was taking us nine months to get to $1 million in revenue per territory! When we transitioned to a no-SDR model (i.e., all field sales), we saw costs drop to $175k per territory, and the time to get to $1 million accelerated to just 7.5 months. We paid more per field rep, but the experience level of the new team brought us better leads faster and converted them to customers more quickly.
Don’t let all these risks pile up! Instead, focus on rethinking your approach to the structure of your sales teams. That takes us to the next step in this process.
Define your challenges.
Look carefully at your sales pipeline requirements and the way your clients buy. Consider two outcomes of that research. You discover your target customer tends to struggle to figure out what or how to buy from you. Or you find yourself having to educate the marketplace to change the way your customer thinks about a business problem they have.
In either of those cases, you cut your SDR hires in exchange for senior-level sales positions in your organization. The outcome: you gain skilled sellers who challenge your customers and dig deeper to understand their needs. You might even conclude from your exercise that you don’t need SDRs at all and instead spend that budget on attracting more seasoned sales pros.
Of course, not all challenges lead to the same solution or outcome. For instance, if your leads are already supercharged and well informed when they make first contact with your business, you need to broaden the skills of your junior ranking SDRs. Give them the tools and confidence they need to better serve their customer. Your outcome would be fewer missed opportunities and quicker transfers of hot leads where senior sales staff are required to close deals promptly.
This is a constantly changing marketplace! Get serious now about rethinking what SDRs do in your organization. Not only will the staffing choices you make there get noticed by your customers, they’ll also reshape how you continue to grow as an organization.