While there’s nothing new about SDRs, the focus and popularity of the approach is increasing dramatically. Even Forbes is getting in on the act with a recent article, The Biggest Trend In Sales Today: This Thing Called Sales Development.
It’s no surprise really. The sales development approach, popularized by the book Predictable Revenue by Aaron Ross, highlighted how Salesforce.com used the strategy to create more than $1 billion of recurring revenue. The full impact of this approach was revealed in a joint study between InsideSales.com and Northwestern’s Kellogg School for Management.
According to Ken Krogue, founder of InsideSales.com, the study found “the closing ratio goes up seven points” (that’s points, not percent – so a 10% closing ratio becomes 17%) when sales organizations specialize roles.
Trish Bertuzzi, CEO of The Bridge Group, a sales development consulting firm for technology companies, describes the sales development role as one “which combines data analysis tools, email nurturing and a phone prospecting teams together.” It’s a specialized role that is only about creating sales qualified leads and preparing them for new sales people.
While SDRs are most popular in technology and SaaS companies (Bertuzzi estimates that 40% of technology companies currently have teams in place), the strategy is quickly moving out of the technology space. We’ve successfully implemented the approach ourselves in five outside industries and that’s growing.
The problem with this phenomenon, as with most popular business trends, is that as the adoption rate increases, less and less thought is put into what it actually takes to be successful with the approach. Business leaders see the results, hear about it from a peer or read about it and jump on the bandwagon.
They don’t spend enough time thinking about the processes and changes that are needed to make the effort successful. According to The Bridge Group, the top challenges sales development organizations face are:
- Productivity & performance
- Recruiting & hiring
- Forecast accuracy
- Ramping new hires
- Coaching & development
Three of those five are all about managing them (and one could argue forecasting is as well). You can’t manage a sales development rep team the same way you manage other employees. Successful reps are a unique group of people and must be managed accordingly.
Some of the biggest challenges organizations face in managing them are:
- SDRs are a little crazy.
Did I say a little crazy? Strike that; they’re flat out crazy. You have to be able to do what they do every day. Think about it. Every day they pick up the phone and call a whole bunch of people that they don’t know. They have no idea how each conversation will go, and yet they approach every conversation with the flat out belief that each one will be successful.
How many people in your company would be willing to do that?
Please don’t misunderstand what I mean when I say they’re crazy. I think it’s a great attribute. It just means they're different. They don’t think or act like most people – and you wouldn’t want them to. They push and push and push. It’s an important attribute when you’re trying to get through to a senior executive to talk about a new ERP system, but it can be quite frustrating when it occurs internally. More reps get turned off by the resistance they feel internally than the rejection they experience externally, so it's important that you make them feel supported.
- They see opportunity everywhere.
They are some of the most optimistic people in the world. Few of them know what the word can’t means. It’s a critical attribute when you’re talking to the receptionist of a $200 million company thinking that what you learn from them can be translated to your next phone call – an outreach to the CEO of the organization.
The challenge is that they often see opportunities where they don’t exist. Managers, even sales managers, get frustrated by this “lack of focus,” and if they’re not careful they shut them down.
When managing them you must set clear criteria about what makes a prospect a fit and what isn’t a fit is critical. But don’t think you can show them that criteria once and you’re done. You must be prepared to review it, positively, virtually every day.
Remember, they're insanely optimistic. When you’re working with them and express negativity it’s not unusual that they’ll overreact to that stimulus. It’s important that you keep things positive with them and reinforce the focus and goals that are in place.
- They’re not patient.
SDRs don’t sit still. They make 50 – 100 calls a day. They have 9 – 18 conversations. You better be ready to keep them loaded with the right people to call and the tools to be successful.
To them everything is urgent (even when it’s not). Again, this is a great attribute when you have them pursuing leads. However, it can aggravate you when they’ve made a request that you don’t feel is important and they feel like you’re ignoring them. Constant communication is critical to successful outcomes.
The Critical Importance of Data
These reps can't be managed with opinions and stories. You may be able to motivate them with it, but that’s it. It is absolutely crucial that you track and share the right data. They're competitive, love to win and hate to lose. The ability to keep score is a must.
All that said, the sales development capability brings huge advantages to companies seeking predictable, sustainable and scalable sales growth, and should be a strategy that that is considered by the vast majority of companies seeking that outcome.
I leave you with my favorite quote from Bertuzzi, “SDRs Rule!!”