In this blog, we will quickly cover four major mistakes made in setting up Sales Development Reps (SDRs). Each mistake has the potential of severely limiting performance. Unfortunately, a number of companies commit two or more of these mistakes, significantly hampering pipeline growth.
SDR Team Design Mistake 1: It’s an Entry Level Job
The work of the SDR is often considered an entry level job—a misconception that this is a “telemarketing” job. Since it is viewed, staffed, and supported that way, the misconception is perpetuated by the lackluster results obtained.
Think about these points for a minute:
- On one side of the phone is your junior rep “Connor”, who is 24 and recently graduated from college. He has a lot of enthusiasm, some product training, maybe some cold calling and objection management training, and little else.
- On the other side of the phone is “Amy”, SVP of Operations in a large trucking company. She has been in the industry for about 20 years, is ambitious, and has a long day that starts around 7:30am and ends around 8pm.
Let’s assume for a second that Amy picked up the phone when Connor called—a very long shot, by the way. But let’s go with that.
What do you think Connor can say to Amy that makes her curious enough to want to hang on?
Remember that Amy has talked to thousands of Connors in her career, while Connor has spoken to maybe 20 or 30 Amys. She knows what he is going to say before he says it, and gives him perhaps six or seven seconds to see if he is going to say something interesting. But that’s unlikely.
So, she says whatever she has to say to end the call politely, including saying “Sure” to a meeting she never intends to attend. Yes, Connor got his meeting and he can virtually high-five his team lead, but nothing really happened here.
But, what if Connor knew the trucking business pretty well? Could he have said something interesting to Amy that would have made her really want to attend the meeting?
SDR Team Design Mistake 2: What we Want is More Meetings
The VP of Sales of a tech company once told me that he had two SDRs who were booking around forty (40) meetings a month for him. When I asked him how many of these were going on his pipeline, he replied “4%”. Yes, only 1.6 meetings per month went on the pipeline.
I am sure your situation is much better. But the point is that if you pay for meetings, you will get plenty of meetings.
The question is: do you want meetings or do you want a sales pipeline?
In another company, an SDR booked a meeting that represented a $500,000 opportunity for the sales team—the largest sales opportunity of the quarter. And yet, his manager only counted it as one meeting because the SDRs had a meeting quota, not a pipeline quota.
Imagine if we did that with our sales team—counted the number of deals our sales reps closed, rather than the dollar amount of sales they generated. If that were true, the sales rep who closed one hundred, $1,000 deals (or a total of $100,000) would be the sales champion rather than the sales rep who closed five or six deals that totaled $1million.
We certainly don’t set a number of deals quota for our sales rep—we know better. However, most companies set meeting quotas for their SDRs, rather than a pipeline quota, which is actually what they really want.
SDR Team Design Mistake 3: More Dials Get You More Results
I often see in LinkedIn groups discussions around how to get 100+ dials/day–what tools can we use? How do we set up our BDRs and SDRs to do 100+dials a day?
Implicit in these discussions is an admission of inability to make effective connections with their intended audiences, and thereby hoping that making more dials will solve this problem.
But, let’s pause for a moment and think through this one a bit.
In his book, ”The #1 Sales Team”, corporate sales trainer Stephan Schiffman explains what he means by his sales numbers, “Each day [I am not training], I pick up the phone and make 15 dials…Of the fifteen dials, I will end up having seven conversations with people who could conceivably give me an appointment. And of those seven discussions I will set one new first appointment with a decision maker. By decision maker, I mean someone who can move me forward in the sales cycle…so those are my daily numbers: fifteen, seven, and one.”
What happened here? Granted Stephan Schiffman is a highly skilled and experienced sales guy, but he is saying he had a 46.7% connect rate.
But, that was in 2006. No one has a 46.7% connect rate with total strangers today—thanks to the billions of robo calls as well as legitimate business calls we are all inundated with.
Hardly anyone picks up their phone today unless the call is from someone they know. In fact, many of us have set our phones not to ring unless the call is from someone on our contact list. We send the rest straight to voicemail–and we hardly check our voicemails anyway.
So, the discussion around making more dials, when our prospects are deliberately shutting us out, is not a fruitful one. We are better off spending our time and effort figuring out how to get our prospective buyers to want to take our calls.
SDR Team Design Mistake 4: We can Hire Our Way out of the Problem
So, let’s recap where we are so far.
We have junior SDRs who don’t know anything much about the people or the industry they are calling into. We tell them they have to book “X” number of meetings each month. And we tell them they need to up their dials to do that. We even buy them auto-dialers.
And after all of that, we still don’t make our pipeline goals and miss our revenue targets. So how do we fix this problem?
Based on our poor numbers, we determine that we need to hire more junior SDRs so our combined total can reach our intended target.
Here again, I ask you to pause for a second and think about it.
Let’s say the average SDR costs you around $55K/year in base pay, benefits, and licenses for the tech stack and you currently have six so your annual cost for your SDR team (not counting the manager), is about $330K/year. And now you want to hire three more, adding another $165k/year to the cost.
Even if you hit your numbers, you did so by increasing your SDR cost by 50%.
But what if you could have made your numbers without adding any headcount— with the six SDRs you had to begin with? What if you had spent time and effort improving on your SDR operations so you could obtain much better results?
In fact, after redesigning your SDR Operations, it makes more sense now to hire more. First nail it, then scale it.
How do you feel about your SDR Team Design? Would you like us to assess and provide you with a gap analysis? Let’s have a free consultation to get started.