sdr Archives - SOMAmetrics

SDR Candidates: Best Interview Questions to Find the Right Fit

June 22, 2022June 13, 2022 by Alicia Assefa

Best Interview Questions for SDR Candidates

As I mentioned in a previous blog (“How Difficult Is It to Generate a Meeting?“), most of the companies that I have consulted with hire people who have never been in a sales development reps (SDR) role. I advocate hiring SDRs with at least 1 to 2 years of relevant SDR career experience. You want to hire the right SDR candidates who understand that they will hunt for qualified prospects to qualify them for pain and need.

Setting SDR Candidate Expectations

During the interview process, you want to qualify candidates for their willingness to call cold into prospects and find those SDRs who aren’t afraid to speak to decision makers. A good candidate who goes above and beyond the SDR role will prove they are willing to:

Make a lot of dials (70-100) per day. This is crucial, as it is more difficult than ever to get professionals on the phone.
Hunt for prospects in your Ideal Customer Profile (ICP) using tools such as LinkedIn Sales Navigator, for example.
Call decision makers and sales managers. Most of your Sales Reps will not want to speak to a person who has been assigned to “research” a topic. This is a bone of contention that I have seen many times between SDR’s and Sales. Sales Reps want meetings set with “Decision Makers” or someone involved in the “Decision Process”. They don’t want meetings with non-decision makers. It is easier, however, for SDRs to get the non-decision makers to take their calls. Unfortunately, as meetings with these prospects are not an appropriate fit, the SDR has wasted time with a non-viable prospect.
Manage a set of Target Accounts which may require cold calls and emails to prospects
Understand how to use a call guide and speak to the benefits or value of your offering in a manner that shows how your solution fills a prospect’s need. If you don’t identify these traits early on in the interview process, you will build an unproductive team. In short, you won’t hit your meeting quota, nor build a quality pipeline. Your team’s job is to build a sales pipeline. Highly qualified meetings are the vehicle that SDRs use to build pipelines for your sales team.

Hint: I recommend that you use the phrases listed above in your SDR job description to clearly identify your expectations for this role.

Rating SDR Candidates

The next item for hiring managers is to build a set of interview questions to ask SDR candidates (Top SDR Interview Questions Resource). Once done, assign a score for each question. For example, in one of my top SDR interview questions, I ask candidates to walk me through their resume. If the candidate can tell me about some key wins and metrics that they hit at each job, I give them a high rating (my score would be a 10) for their answer.

The Interview Process

During the interview, the SDR candidate should be able to outline key areas where they had goals to attain and metrics to meet. This is especially important if the candidate has never been a SDR.

As they answer your questions, SDR candidates must show that they have done the work. One of my questions is: “How do you manage your daily activities?” Their answer should show they took initiative, unprompted, at their previous jobs. For example, the candidate might say something like:

“I get in at 7 AM, and the first thing I do is review what I have to accomplish for the day, like tasks that have popped up, etc. Next, I like to make my calls early in the morning and late in the afternoon, which is when executives are more likely to be available”.

Note: one of my SDRs asked to start work at 10 AM because they had great results by calling through 8:00 PM. He was my top rep and is now a VP of Sales at a major tech company.

A poor answer would sound something like:

“I think most people start their day by looking at their tasks and making calls.”

In this example, we don’t care what “most people” do. We only care about what they do each day. If it seems like their answers are guesses, they probably are.

After you find a candidate that has received a high interview score, you will need to vet them further, following along these guidelines:

Give them your value proposition and see if they can create a suitable call guide.
Ask them to do a role play, making sure that they call you at the appointed time.
Have them interview with at least 1 of your SDRs to get their take on the candidate
Have a Sales Rep or VP of Sales interview them so that they can give you their thoughts about how effective this candidate will be in the role. Remember, Sales is your customer and they should have some say in the hiring process and overall business development.

Building a Winning Team

This process should take at least a week to complete. Even if you have a desperate need, you don’t want to skimp on the interview process. This is an important role:

The right SDR will generate a valuable pipeline and help you achieve your quarterly goals.
Excellent SDRs can be the pipeline into your sales organization. They will know your solution and will have proven that they can call decision makers and generate interest.
Some of your best SDRs may become managers as your SDR team grows. The best ratio is 5-8 SDRs per manager.

When you include these fundamentals in your hiring process, you will build a winning team! (Top SDR Interview Questions Resource).

Read the book The Radical Pipeline Strategy: How to Grow Pipeline and Revenue by Optimizing Sales Development. This book outlines tested best practices and implementation strategies that I developed while rebooting and building 65 SDR and Inside Sales organizations.

The Radical Pipeline Strategy Book by Alicia Assefa

Schedule a Meeting with Alicia

Find out more about SOMAmetrics’ Intelligent Prospecting Platform and get free resources on our website at www.somametrics.com.

How Difficult Is It to Generate a Meeting? Common Misuses of SDR Teams in Appointment Setting

Prospects are Real People Too: Using Prospect Personas to Land Calls

Use Task Force Teams to End the Great Reshuffle

5 Reasons Why Your Sales Development Team Is Failing

Prospects are Real People Too: Using Prospect Personas to Land Calls

June 22, 2022June 1, 2022 by Alicia Assefa

When an SDR makes calls, they often freeze when someone answers, especially if they are new to the role. Much of the fear stems from the lack of training and tools that they need to feel confident having conversations with senior executives.

Another reason SDRs freeze is because they believe that they can’t relate to the person at the other end of the call, such as C-Level executives who are established decision makers and sales prospects. A fun way to dispel this belief is to make these Persona’s real to the SDR through content that will streamline their sales process (SOMAmetrics Prospect Personas Identification Handout).

SOMAmetrics Prospect Personas Handout

Making the people on the other end of the call real is as simple as having the SDRs work through the different Prospect Personas that are your target audience and ideal customer. On the SOMAmetrics Persona Build Handout, you will find questions that help the team create prospect and buyer personas.

A few examples are:

Personal information: How old is the VP of X?
How many kids do they have?
What are their personal and professional goals?
Do they have any pain points?
Is there anything that keeps them up at night?

These are great questions to discuss, as these insights may help SDRs to connect the dots between your solutions and the prospects issues.

During the Exercise

You may want to ask a Sales or Product Marketing team member to attend the session in order to help the sales team, and provide customer case studies.
Give the Persona a name and find a picture to add to the sheet
- Have fun thinking about Marsha, VP of Sales, for example. She:
  - Is 47
  - Has 3 kids, who are now on their own
  - She reads the NY Times and (provide a few names of trade journals that she reads)
  - Her professional goal is to become a CEO at a Tech company in a few years
  - Stays up at night thinking about how they are going to hit their Quarterly Objectives, how to achieve sales transformation, and how she can get the new product out faster (to help boost sales and overall business).

You may want to select 2 Prospect Personas each week. The exercise, when done right, can take about an hour. If it works better, divide the team and have these teams focus on a few different personas until all are covered. Then bring the divided teams back into one group, and share these Prospect Persona updates with the whole team.

The Effect of Prospect Personas

Some of your SDRs may get subscriptions to the trade journals that your prospects read, which will provide them further insights into the people and industries that your company serves. They may begin to empathize with your prospects and the challenges that they face. Overtime, your team will feel empowered to discuss how your solution can help these prospects hit their goals. When your team feels comfortable speaking with your valued prospects, their conversations will become natural. SDRs will now have something of value to say to your prospects, which will help to engage them to want to know more about your solutions.

This is a fun and rewarding exercise. The team will get a laugh out of it and they will see that yes, our prospects are real people too.

Schedule a Meeting with Alicia

Find out more about SOMAmetrics’ Intelligent Prospecting Platform and get free resources on our website at www.somametrics.com.

How Difficult Is It to Generate a Meeting? Common Misuses of SDR Teams in Appointment Setting

Use Task Force Teams to End the Great Reshuffle

5 Reasons Why Your Sales Development Team Is Failing

The SDR Funnel Math – Fix the Key Metrics Before You Increase the Size of Your SDR Team

How Difficult Is It to Generate a Meeting? Common Misuses of SDR Teams in Appointment Setting

June 22, 2022May 2, 2022 by Alicia Assefa

In my book, The Radical Pipeline Strategy, I discuss the strategies and best practices I have used to build effective Sales Development organizations with regards to appointment setting. These teams, commonly known as Business Development (BDRs); Account Development (ADRs); and Sales Development (SDRs), consistently help your sales teams to achieve pipeline and revenue targets.

How difficult is it to set a meeting?

Over the years, Sales Development has come a long way. It is no longer disparagingly thought of as “Telemarketing”—a group of junior people whose primary role is appointment setting, or register people for seminars and events.

The SDR role is, however, still considered an entry-level position: their job is to generate a sales qualified meeting otherwise known as an SQL. The reason why companies hire junior-level people is because they think, “how difficult is it to set a meeting”? This is a pivotal question that I explore fully in my book.

In this blog, I will outline common misuses of SDR teams as appointment setters that I have encountered while retooling client SDR teams at over 65 companies.

Role of SDRs

To start, consider this: companies hire junior SDRs as their first line of defense. Their job is to call valued prospects who have 10 or more years of experience in their field. However, most junior-level SDR’s haven’t acquired the skills to speak to these seasoned professionals in a meaningful way, nor have they been given the tools to support their qualification efforts. In other words, “junior” SDR’s are the first point of contact with the most valued prospects of your company. This is an ineffective strategy for appointment setting that simply doesn’t work.

Junior SDRs don’t know how to speak to executives, and executives—who receive hundreds of calls from the same type of people—will tune them out. As a result, few qualified meetings are set and pipeline goals simply aren’t achieved.

To make up for the lack of quality meetings, companies hire more SDRs to help them squeeze out more appointments needed to meet their qualified meetings quota. In doing so, companies just build larger, more unsuccessful teams. This, in turn, costs companies a lot of money and frustration as they continue to miss pipeline targets month after month.

Next, consider this: billions of robocalls (over 50 billion in 2021) are made to the same seasoned professionals which lowers your SDRs chances of getting the target to answer their calls. And when they do actually answer, SDRs aren’t prepared to talk to the potential prospect. SDR’s need extensive training—in B2B appointment setting—to have conversations that provide prospects with the “valued” information for making informed decisions. Without this training, no one (prospects or sales) gets what they want or need.

Below are some examples of how SDRs are misused.

SDRs are NOT:

A panacea! If your company doesn’t have a viable solution, or your executives haven’t identified your best targets, or if your messaging is off the mark, SDRs won’t be able to generate a quality sales process and pipeline. Don’t force your SDRs to make up your messaging—they will fail.
A cold-call engine. Our research shows that it takes around 2,000 cold call dials to generate one closed deal. I don’t know any company that can afford a resource just to make dials. Instead, give your SDRs enough MQLs (marketing qualified leads) to meet your stated objectives. Then, set up a Target Accounts program, which are key accounts that your Sales Executives want to close, during the year. Market to these specific accounts using ABM, for example. Next, assign a handful of these accounts to your SDRs each quarter and arm them with content to give to prospects as they work to make contact. Finally, provide your sales reps with SDR marketing solutions, like FrontSpin and Outreach.io, to enable them with the skills to send personalized and targeted messages.

They are also NOT:

Your Chief Marketing Officer or VP Marketing/Sales. Every team I retooled allowed their SDRs to create emails and sales tools, which were not effective. SDRs are not product marketing executives or writers. Effective SDRs are good on the phone, but most are not good at writing. Marketing and Sales should consistently provide the right tools and fresh content with the desired messaging to their SDR team members. I tune out emails that are regurgitated and sent to me week after week… your prospects will too.
Your Sales team. Don’t expect your SDRs to close deals. Instead, educate them to uncover basic needs and pain. In addition, let them focus on generating quality SQLs and appointment setting with viable prospects. Have your sales and inside sales teams close the deals.
Admin support for your sales team. Many of the companies I have worked with loaded their SDRs with admin work. When this happens, SDRs who don’t enjoy making phone calls focus on admin work, and the SDRs who like making phone calls won’t do the admin work. So, SQLs are not being generated, nor is admin work being done. Remember, SDRs are there to develop a quality pipeline for your sales organization. Give them one job: generating highly qualified SQLs and sales appointments.
An after-thought. The SDR operation works best when it is considered an integral component of a company’s overall marketing and sales strategy. Companies that just “plop” in a SDR team without providing the right infrastructure, or with effective marketing or sales strategies in place, waste a lot of time and money. It takes careful thought and planning to build a SDR team that will generate a quality sales pipeline.

SDRs are:

Often the first live personal contact your prospects will have with your company. This first conversation needs to be spot-on and meaningful in order for your prospects to stay engaged with your company.
An effective method for delving into your prospects’ needs and building pain for your solution. Teach your SDR’s how to ask the right qualifying questions that build pain and need.
A sales pipeline development engine.
Most effective when supported by MQLs, or have an effective Target Accounts program in place.
Opportunity builders. Every communication with a prospect increases your company’s chances to create a viable opportunity. Make sure every call counts. Train your SDR team to take full advantage of every prospect interaction through efficient lead generation. Provide them with the right tools and proper training. Help them learn how to keep your prospects engaged throughout the qualifying process.
A great way to stay in touch with key or Target accounts. While field reps are closing deals or chasing warmer opportunities, someone needs to stay in touch with the key accounts or else you may lose them to the competition. (Some years back, one of SOMAmetrics’ clients had Comcast™ listed in their database as a Target Account. Comcast™ had been in their database for a while. Our SDR discovered that Comcast™ was going to acquire NBC. She called them and generated an enormous opportunity for our client. The field rep was unaware of this new information. This might have been a missed opportunity if our SDR had not contacted Comcast™ when she did).
In touch with the same prospects every month. These prospects often provide useful market intelligence which your company can mine to perfect its messaging and targeting.

Building a quality sales pipeline

To answer the previous question, “How difficult is it to set an appointment?”: it is very difficult to set an appointment. This is why so many SDR organizations fail. Every connection with a prospect needs to be treated like gold. Today, most people don’t pick up the phone to speak to anyone who is not on their contact list. When they do, the SDR needs to be armed with the right messaging and understanding of both your targets and your ideal customer profile (ICP). They must know how to qualify for pain and how to identify compelling prospect events, which align with your solutions.

In short, the role of your SDR team is to build a quality sales pipeline. They do this by setting highly qualified meetings with the right targets in the right market. Pipeline is always king. If you view this team as a strategic part of your pipeline build and set it up properly, you will hit your pipeline and revenue targets consistently.

Schedule a Meeting with Alicia

Find out more about SOMAmetrics’ Intelligent Prospecting Platform and get free resources on our website at www.somametrics.com.

Prospects are Real People Too: Using Prospect Personas to Land Calls

Use Task Force Teams to End the Great Reshuffle

4 Sales Development Manager Oversights That Hurt SDR Teams

5 Reasons Why Your Sales Development Team Is Failing

5 Reasons Why Your Sales Development Team Is Failing

June 22, 2022March 4, 2022 by Alicia Assefa

Ten years ago, I wrote a book titled, “Teleprospecting for Executives Who Sell Complex Solutions”, a workbook to help executives understand how to properly run a Sales Development operation in a B2B setting.

I recently reviewed my book to see what had changed, expecting to make massive changes before publishing on Amazon.

While some of the details may have changed, I was astounded to find that fundamentally not much has changed in the Sales Development world since I last wrote my book.

Today, most companies have invested in Sales Development Teams—typically referred to as Sales Development Reps (SDRs). This team is hired to generate meetings for their sales team organization. The majority of these SDRs are not successful. The Sales organization doesn’t accept meetings that they generate, and the trust between the departments fades very quickly.

At the same time, SDRs feel like they have worked hard to generate these meetings. They fail to see why a sales process and strategy do not accept these hard-won meetings. Sales Reps find that marketing meetings with SDRs are shallow, don’t map to the relative customer buying journeys, and rarely include decision makers.

What Has Changed?

Ten years ago, each of my sales development representatives received around 200 solid MQL calls each month. While about half weren’t that great, the rest were good enough for the team to call in to qualify for need and pain.

Now, decision makers don’t read their emails or answer the phone unless they know the caller. This has put a huge burden on demand generation development teams to drive traffic to their websites. But these inbound leads dribble in and the numbers aren’t large enough to support an SDR team.

Therefore, to fill the gap, demand gen teams depend on content syndication to make up the difference and send these to their SDR teams to ensure that they have someone to call. News alert! Qualified leads from content syndication will only burn out your SDRs because very few out of thousands actually have a need. Most of these prospects are just doing research for personal reasons or just to keep apprised of what data tools are available, maybe for future use.

The business world has changed! It has become more difficult to engage prospects and to generate leads. This is one of the reasons why SDR teams aren’t effective. Now let’s look at other reasons.

5 Reasons Why Your Sales Development Team Is Failing

1. Inbound lead traffic is low

Demand generation teams struggle to get quality, meeting-ready leads in front of the SDR teams.

2. Companies hire junior level people to generate meetings for sales

As stated in my book over 10 years ago, it is counterintuitive to expect your least experienced people to be the first point of contact with your very special prospects (decision makers, influencers, etc.). Junior people don’t understand your prospect personas, what keeps them up at night, and how to engage them on the phone to get to their needs/pains even if the prospect doesn’t have an initiative. When a junior SDR has a call guide, they don’t have the skills to make the points on their own and to tell a story about the value prop of the solution they are calling about. They also don’t know how to pivot when the call goes off-script.

In my book, I tell a story about a senior SDR who reported to me. He had a call with a CTO at a Fortune 100 Manufacturing company. David (the Sr. SDR) had a quick meeting with me to review his sales strategy and process for the upcoming call. He had just read an article in CIO Magazine which reviewed why CIO’s/CTO’s typically last in their positions for less than 18 months. During the call, he mentioned the article when the CTO told him that he wasn’t interested. David replied, “Sure I get it. Your job isn’t to figure out how to lower your energy spend. I just read an article that discussed how CIOs like you only keep their jobs for 18 months, because CEOs don’t believe that they are effective. I’ll send you the article.”

It took David about 3 years of hard work and a personal drive to become a sales qualified Executive. Juniors will cost you a lot more, in the end, because they are not effective and require a lot of training.

3. Companies believe that the SDR’s job is to generate appointments

This is wrong! The job of the SDR is to build a sales pipeline and execute through sales operations. The method used to build the pipeline is by setting meetings with decision makers and/or influencers to understand the prospect’s pain and to show the prospect how their problem is bigger than the cost of the solution. Companies don’t establish that their job is pipeline development, even though that is what everyone wants…. More and better pipeline.

The best way to establish pipeline growth is with a compensation plan that includes a small part of the variable for the appointment, a bigger part for an approved SQL, and a larger part based on the amount of pipeline generated each month/quarter from these appointments. I have coached my clients to add a bonus that maps to the closed deals from these appointments. Regardless of structure, the compensation plan focuses on pipeline growth.

4. Companies don’t establish the right KPIs to track and measure SDR activities

Dials made and emails sent are good to track, however, these elements do not ensure quality meetings. There are a few key SDR statuses that I look for (the details are in my book). Meaningful Conversations or Key Conversations are calls with a decision maker or someone in the know to identify some issues/paints. Often it requires more than 1 call to get all of the details to generate a strong meeting for Sales.

However, if there is interest, the timeline is decent, and the person is the right person, then there is enough information to set the meeting and send to sales. Either way, this status needs to be tracked, among others. From my perspective, Meaningful Conversations Or Key Conversations are the SDR pipeline and they should have 2-3x their meeting quota each month.

5. The SDR process is different from a sales processes

Most companies don’t understand this and set up their CRM as a one-size-fits-all. SDRs should make a lot of calls and send many emails/day. SDR Managers need to keep track of these activities, which won’t necessarily lead to a great meeting, they are required to get meetings. As stated, there are other KPIs to track as well, to ensure that SDRs are driving to their goals.

In addition to mapping the KPIs into the CRM, key qualifiers that your team needs to gather should be in the CRM. This will ensure consistency in B2B sales, and enable the SDR Manager to track the quality of the lead/meeting before they are given to sales. As such, there should be two approved workflow processes set up to track the meeting:

Make sure that there is a process for the senior sales manager to approve the meeting.
Once the meeting is approved by the SDR manager, the workflow should move the meeting to receive the account executives’ approval after the call has happened.
If the Exec doesn’t approve the meeting, the lead should be pushed back to the SDR with notes of what is needed to make this a better meeting. This gives the SDR a chance to re-engage with the prospect and get more information about their inside sales.

These 5 points of failure, if fixed, will enable your SDR team to generate meetings that build an effective sales pipeline. Pipeline is King!

Schedule a Meeting with Alicia

Prospects are Real People Too: Using Prospect Personas to Land Calls

Use Task Force Teams to End the Great Reshuffle

How Difficult Is It to Generate a Meeting? Common Misuses of SDR Teams in Appointment Setting

4 Sales Development Manager Oversights That Hurt SDR Teams

June 6, 2022February 25, 2022 by Alicia Assefa

Regardless of whether the Sales Development team in your company is under Sales or Marketing, your Sales Development Manager must manage the SDR team like a Sales Manager manages her sales team.

1. SDR Team Managers need to manage by two sets of numbers

Over the years, I have learned that the job of an SDR team is not to generate meetings. It is to generate pipeline for Sales. Each Sales Development Manager (“SDR Manager”) should have a pipeline quota they must achieve. Pipeline is King! If the SDR team achieves its meeting quota but misses the pipeline quota, that is a big failure in my mind. On the other hand, if the team misses its meeting quota but hits or exceeds the pipeline quota, that is a big win.

Sales Managers need to ensure that their Sales Execs are not sand-bagging and adding deals at a lower pipeline value. This is often a bone of contention for SDR teams. Sales Development Managers must meet with Sales Leadership regularly to keep both sides honest.

2. Track the Sales Development Manager’s time over 5 days

You can create a spreadsheet with columns that have a field label “type” and other fields for the days of the week (M-F). Some examples of these types include:

Team meetings
Coaching Individuals
Reporting
SDR Pipeline Review (The SDR Pipeline tracks the Key Conversations that each SDR has achieved and needs to be 2-3X the meeting quota)
Meeting Approvals
Other Meetings
Admin Work.

Without fail, this exercise has shown me that most SDR Managers spend less than 12-15% of their time coaching and assisting their team to improve skills or experience. If your team is primarily made of junior SDRs, then senior Sales Managers need to work with the team regularly to brainstorm business development tactics. My recommendation is that management focuses 30-40% of their day coaching their teams. Time spent coaching a team with the use of the call guide, messaging, persona needs, and role-playing will help to elevate the team of junior SDRs.

3. Forecasting meetings and pipeline growth

This skill should be a part of every Sales Development Managers’ job. It is very important to track weekly progress, where the team is, and what the SDR Manager forecasts for the Quarterly regional sales. Forecasting is also important because if the team is off at any point during the quarter, the SDR Manager must pivot on their strategy to ensure that the team will still produce strong results with their support.

4. Build a mini business plan

This will outline how the team plans to achieve their goals and objectives in a specific amount of time. GOSPA (Goals, Objectives, Strategies, Plans, and Activities) is a 1–2-page plan which focuses on the manager and the SDRs on the how of achievement. Each set of quarterly goals should be given to team members. Most companies fall short by not engaging team members to determine the “how”. These documents should be reviewed with the SDR Manager to determine if the SDR has set realistic objectives and strategies.

Team members who review and update their GOSPA’s will be more successful than those who don’t. If a team doesn’t know how they will tangibly hit their objectives, they won’t succeed. Strategies may need to be changed, throughout the quarter to hit numbers. If the team has a method for developing a strategy, are monitoring where they are each week, and are responsible for the “how”, they are more likely to be successful.

Treat your SDR teams as a strategic part of your sales organization (even if they report into Marketing). The team will generate viable meetings and pipeline for the Sales team.

Focus your SDR Managers on what matters. Pipeline is King!

Email me at alicia@somametrics.com if you want to reboot your SDR team.

Learn about our SDR Enablement.

Schedule a call with us today.

The Strategic SDR Compensation Plan

June 29, 2022February 4, 2022 by Eskinder Assefa

A strategic SDR compensation plan naturally aligns the objectives of the SDR team with that of the Sales Organization.

For example, restaurants figured out a long time ago that if they made their waiters share tips with bartenders and busboys, everyone made more money. In fact, the better tippers got their drinks made first and tables turned around faster.

It doesn’t pay to be stingy with tips. Same thing in Sales.

Providing decent variable compensation plans for your SDR teams results in significantly greater sales that more than covers the increase in compensation.

Our analysis shows that by paying out an additional 1.6% of sales in SDR variable comp plan and providing them with the adequate training and content support they need, sales can increase by twice as much. Hard to believe, but that is the magic of using your SDR team the right way and focusing them to build a quality sales pipeline.

Let’s remember that there are two reasons why the right compensation plan ends up creating the motivation necessary to produce far greater outcomes than the cost of the compensation:

Everyone could use more money (especially those at the lower end of the pay rate), and will strive harder if paid more.
It incentivizes the job for them—rewarding them for each small success so they are constantly achieving many small successes that lead to big wins at quarter or year end.

The Strategic SDR Compensation Plan

SDR variable comp plans have three components: what you pay for meetings; what you pay for pipeline, and what you pay on revenues generated as a result of the meetings set by the SDRs. Let’s discuss each in some detail.

Strategic SDR compensation 1: Meeting Bonus

We said that the SDRs should be measured on the pipeline they build and not on the meetings they set. However, meetings are the vehicles that make pipelines possible, so they do need to set meetings for the sales reps.

By paying a small bonus for setting approved meetings, we encourage SDRs to set more qualified meetings.

How it works:

Let’s suppose that the SDR has a monthly quota of eight meetings per month.
When the SDR sets a meeting, the SDR manager is notified and examines the details of the meeting—the title, company, completeness of details including email and phone number, date set (is it too far out or not), and completeness of notes.
The sales managers inform the sales reps of any information that the SDR has gleaned.
If the manager believes this is a qualified meeting, she will approve it. Otherwise, she declines it, which means the SDR will have to solve the critical problems that were present.
If the manager approves the meeting, the SDR receives the approval email and knows he has just won his meeting bonus
If you pay $25 per approved meeting, and the SDR meets his quota, he just made another $200 that month—this may not be a lot, but it creates small but immediate rewards towards which to work each day.

Strategic SDR compensation 2: Pipeline Bonus

The real job of the SDR is to build a sales pipeline. Each approved meeting has the potential to do that. To actually go on to the sales pipeline, the following must occur:

The prospect actually attends the meeting with the sales rep
The sales rep conducts a full discovery call and deeps that this can go on the pipeline because there is a viable sales opportunity here
The prospect agrees to the next steps proposed by the sales rep

Let’s say we pay SDRs $150 per $100,000 of pipeline created (0.15% rate). We track this quarterly, which means that as soon as the sales rep creates that opportunity and adds the dollar amount, it counts.

In the CRM, we pass on the SDR’s name to the Opportunity created, and then run a report at the end of the quarter for all sales pipeline created that quarter (including those that were created that quarter and are now closed won or lost) and filtered by the SDR’s name.

The total amount multiplied by 0.15% is what is payable to the SDR as pipeline bonus.

Let’s say that the SDR turned in a total of 24 meetings of which 17 went on the pipeline, and the average deal size was around $100,000. That means that the SDR created $1.7million in pipe that quarter and earned $2,550 that quarter or an average of $850 per month.

So far, the SDR has added $1,050 worth of bonuses to his monthly pay and overall base salary. Considering the $1.7 million in sales pipeline he generated that quarter, the $3,350 we compensated that SDR for the quarter (including meeting bonus) is a very tiny added cost.

Strategic SDR compensation 3: Revenue Bonus

Now we get to the real bottom line–actual, converted sales. Let’s say the SDR consistently puts around $1.7 million in sales pipeline each quarter, and due to the improved quality of the pipeline, the sales rep can improve her closing ratio from 20% to around 25%.

Over a rolling period, she will close around $425,000 in sales performance each quarter.

Let’s say we pay the SDR $500 per $100,000 of sales won. That means the SDR is now getting around $2,125 each quarter in additional bonuses, or about $708 more per month.

That means, our SDR can now expect an average of $1,758 in additional performance bonuses each month. Or in annual terms, this adds $21,096 in variable compensation in addition to his base pay.

The SDR as a Professional

If we stop thinking of the sales development profession as an “entry level job”, similar to the way working in the “mailroom” used to be looked at, and actually see it as a high-skill craft with countless opportunities created, our sales reps will benefit and our company as a whole will benefit.

We need a holistic transformation of our view of the SDR profession—we need to train them, provide them with the resources they need, set the right metrics and KPIs, compensate them, and coach them as the high-skilled professionals they can and should be.

Schedule a call with us today

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SDR Team Design: Four Common Mistakes to Avoid

June 6, 2022January 21, 2022 by Eskinder Assefa

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.

The SDR Funnel Math – Fix the Key Metrics Before You Increase the Size of Your SDR Team

September 22, 2022January 12, 2022 by Eskinder Assefa

As we work with clients, we hear the same questions over and over again: Should we hire more Sales Development Reps (SDRs), or sales reps? Or both?

And our response has been invariably the same—it depends.

If your conversion metrics are all good, then by all means hire more.
If not, fix your conversion metrics first before you hire more. Otherwise, you are throwing good money after bad.

Let’s say your sales goal is $10 million and your average deal size is $100,000. This means your reps need to close 100 deals. So far, looks pretty straightforward.

Here is where the “it depends” part begins.

· If your average closing ratio is 10%, then you will need 1,000 opportunities in your pipeline

· If your average closing ratio is 20%, then you will need 500 opportunities in your pipeline.

Just this one metric alone clearly demonstrates that improving the quality of the pipeline reduces the burden on both your sales and SDR teams. SDRs don’t have to book as many meetings, and sales reps don’t have to struggle to work with so many prospects at the same time.

It also makes it easier to see why you will not need to hire more SDRs or sales reps with the second scenario, while you are more likely to believe you “need” more of both with the first one.

The SDR Funnel Math

But, I’m sure you know it’s more complicated than that.

Working with the conventional three-tier funnel model (Top, Middle, and Bottom), Marketing is supposed to keep filling the Top of Funnel (TOFU) with qualified prospects so that enough go to the Middle of the Funnel where your SDRs call to qualify and book appointments for the Sales team, which works on the Bottom of the Funnel to push prospects through the funnel to a close.

For this article, we will focus on understanding what is happening in the Middle of the Funnel.

Let’s say on average, each of your SDRs can book around 5 meetings a month, of which sales accepts about 70%, and of those Sales accepted meetings, about 66% make the meeting (one-third are no-shows or cancellations because the prospects didn’t see any real value in making the meeting).

Also, let’s say the average deal size of these leads were they to convert is about $75,000

So, the pipeline value that your average SDR is building for the sales team is = 5 meetings x 70% acceptance rate x 66% show rate x $75,000 or $173,250/month per SDR. Not much, and may be the reason why you were thinking of hiring more SDRs.

However, before adding to your payroll cost, think of what can be improved.

What if I showed you that you can increase the average pipeline to $484,500/month per SDR—a 180% increase in pipeline built? Would you first look into that to see if that were possible, or still go ahead and waste time and money hiring more SDRs?

I am going to assume you said you wanted to first look into how you can increase the average pipeline built by 180%.

Key Metrics

Looking at our formula above, there are four key metrics we can improve:

1. Average meetings set by a SDR per month

2. Average Sales acceptance rate (a measure of quality of the meeting)

3. Average meeting show rate by prospect (also an indication of the quality of the meeting set)

4. Average deal size (again, a measure of the quality of the meeting)

Improving any one of these metrics will improve the average pipeline size built by each SDR. Improving all four metrics will dramatically improve the average pipeline built by each SDR.

The Before and After In Action

Look at the chart below:

We see that we are making small improvements in the range of 20% (for appointments set per month/SDR) to about 36% (number of appointments accepted by Sales).

And yet, the cumulative impact is 180% increase in sales pipeline built

Not just Pipeline Metrics—Sales Metrics also Improve

In fact, you can argue that if you improve the quality of the pipeline (highly qualified and more motivated prospects in the pipeline), then the average closing ratio of your sales reps should also improve. After all, they are meeting with the right people who are also highly engaged.

If we assume we improved the average closing ratio by 25% (from 20% to 25%), then actual booked sales will improve by a whopping 250%–just from the above quality tweaks.

Training and Support–The Secret Sauce to SDR Funnel Math

Improving the SDR metrics and understanding SDR Funnel Math is the key to improving sales metrics. And the secret sauce to that is training and optimizing your existing SDR team.

Before you hire more people, fix these metrics. As an old mentor of mine used to say, “First, Nail it. Then, Scale it.”

Would love to hear your thoughts on this. Let’s schedule a call to see if we can help you analyze your current SDR operations and see if there are any gaps that need to be addressed. Visit our homepage to learn more about us.

The Hidden Cost of Sales—Low SDR/BDR Performance

June 6, 2022January 5, 2022 by Eskinder Assefa

The Story Behind Rising Cost of Sales

According to HubSpot, the cost of new customer acquisition (cost of sales and marketing) has increased by 60% over the past six years or so.

What makes this even more alarming is that when we combine it with another finding. A 2019 Accenture study reported that 80% B2B buyers are switching vendors at least once in a 24-month period.

Let’s add a third stat: a 2019 Salesforce study found that 57% of sales reps weren’t making their numbers.

I don’t know about you, but I am having a hard time reconciling these numbers. If 80% of B2B buyers are changing vendors within 24 months, how are 57% of sales reps having trouble meeting their numbers? Shouldn’t it be easy to win new customers?

Looks like there is more to the story here.

And to tell that story, I have to tell another one first. In the 1990s (feels like a century ago, doesn’t it?), Dell Computers was growing faster than any other company—at least 100% every year for many years. Needless to say, they didn’t miss their numbers much.

One strategy Dell used to grow that fast was to cut sales territories by half each year. Sales reps screamed in anguish how this would kill their income…and each year they made more money than ever before.

Why? Because they got to know their customers more intimately when their territories were smaller. They focused more, learned more, and became far better resources to their customers—who became raving fans of Dell and wouldn’t buy anything else.

It seems that’s the story with every company that is growing fast—Zoom, Amazon, Netflix, HubSpot, Salesforce…They all know their customers—deeply. They, therefore, don’t lose customers, and their customers only buy more and rave about them to others—which means their cost of customer acquisition is going down, not up.

The “Cost” in Cost of Sales

With that setup, let’s focus our discussion on what we mean by knowing your customers deeply. And for our discussion, I’m going to focus on just the front end—sales and marketing.

In most B2B companies, and especially those that sell to enterprise accounts, their “front end” consists of Marketing, Sales/Business Development (“SDRs”), and Sales. Each is focused on a specific operation. Marketing builds the top of the Funnel, SDRs focus on the middle funnel, and Sales focuses on converting the bottom funnel into revenues.

Unfortunately, In many of the companies we work with, only their best sales people truly understand their customers, and thereby close the largest deals and have the highest win rates. Alas, they make up maybe 10% of the entire “front end”. The rest barely know anything about their customers, let alone deeply understanding them.

The inevitable consequence of that lack of customer understanding?

Marketing content that is too generic and doesn’t draw the right customers; SDRs not getting leads and sending their own generic emails that mostly lead to more unsubscribes; meetings that are canceled because prospects don’t see the value in keeping them; underwhelming pipelines forcing sales reps to spend their time generating their own leads rather than moving the sales pipeline to close.

In short…more sales reps missing their targets, leading management to hire more SDRs and sales reps in the hopes of making their numbers, leading the cost of sales to rise each year.

Before you spend more…

As yourself, in your company, who really deeply understands the customers? Who can talk for hours regarding the customers? Who is that person, “you can turn on your recorder, sit back and let them talk?”

How many will describe your customers in terms of: what they struggle with each day, what their priorities, concerns and goals are; how their company makes money and how they get compensated; what they have worked on for so long to get right, and what they are afraid could change to disrupt that? How many know where the customer’s industry is headed, where new competition, regulations, and other threats are?

Does your marketing team understand this clearly? Is that what they are building their marketing content on? Are they driving the right prospects into the top funnel for your SDRs?

Do your SDRs know this? When they pick up the phone and call a senior decision maker, do they clearly understand how they can eliminate the key pain/cost/risk of that person and improve their numbers by “X” amount? Can they articulate that? Can they book and keep meetings with highly qualified senior decision makers?

At the very least, hold off spending more until you know the answer to these questions.

The Hidden Cost of Sales

That is the hidden cost of sales for most companies—their SDRs/BDRs don’t really know how to engage their prospects to get quality meetings booked for their sales reps.

As a result, pipelines are not sufficient to hit revenue targets and too many of your sales reps are spending too much of their time prospecting rather than moving leads in the pipeline towards a successful close.

Unsupported SDRs/BDRs are the hidden cost of sales and there is a simple solution to fix that—support them with these SDR services.

Let’s discuss your specific environment, challenges, and potential solutions:

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