Recap: Digital Salon on Scaling an SDR Function

October 6, 2022

EVENT RECAP

Justin Edwards leads the Revenue Practice at Mercato Partners, and has worked for some of the fastest growing companies in the world, including Adobe, Oracle, and InsideSales.com. For the last five years, he’s been deeply engaged with helping great portfolio companies become even better. In this roundtable, he walks through setting up a sales development function, including how to hire SDRs, how to right-size and structure your team, and how to select the right tools for your SDRs.

Video

Slides

Recording Transcript

Intro and Background

Justin Edwards 0:00

Okay. So um, with my background, I’ve spent a lot of time in sales, obviously 20 plus years. sales development is something that early on, I’ve included one of my first companies that I worked for called board technologies. Back in the day, you actually had to call and create your own pipeline, this was around 2007. And the sales position was a generalist position. And as we migrated to 2023, obviously, sales development is a it’s it’s really specialization. Specialization, meaning we’re taking specific tasks, and we’re creating functions within organizations to create efficiency. And that can be in cost, time quality, and a bunch of different factors, the best organizations in the world that have built out sales, or like the sales development organizations, I probably the ones that I’ve worked for, had been Adobe, where we were reaching about 80% of our pipeline, through our sales development channels. Oracle wasn’t as good it was more of like a self source. from a sales perspective, the sales teams had to go out and prospect on their own. But when you look at the revenue stream, it’s not a new logo play. It’s with Oracle, it’s an expansion play. And inside sales is actually kind of the company that I was working with, and directly involved with deploying sales development programs, where efficiency became and specialization became kind of like the topic du jour. It was, how do we dice up different levels of the sales function, especially in development pipeline, and then assign those tasks to individuals and create positions. So from a background perspective, the the sales development area, I’ve been intimately involved with it from day one. For the last five years, I’ve been with Mercado, and we’ve been obviously making investments, you see traverse, you’ll either fall within one of the two practices that we have, in terms of our value add, and where I work, Prelude, we have 14 companies and then in Traverse, we have 14 companies. So 28 companies, everyone’s focused on growing their companies where we invest. And I just wanted to give you a little bit of background where we actually invested on the sales side is we’ve got good product market fit. Meaning like you’ve got an organic poll the product is is acknowledged, you got customers, transacting, the company actually understands, you know, the, the, the ideal customer profile. So you’re really dealing with knowing who you’re supposed to go and where they are. And at that point, we make an investment. And I’m just showing this slide to kind of orient you in terms of scale. The way that we actually scale organizations is through sales development. And a lot of the organizations that we invest in, really don’t have it built out a lot of you guys already have your sales development areas built out.

When does it makes sense to build an SDR function?

So as we start to kind of like think about this. I’m going to pose a question to the group here as it relates to when is the right time to build out an SDR function? I’d love to get some thoughts and dialogue Oliver I know that you’ve got an answer.

Unknown Speak 4:03

Well, I would actually say right, where you’ve started that primary purpose is really what we’ve seen the most effective influence of that str function in our sales is is velocity of sales is is is like a force multiplier. So an eight you can focus on driving our POC we have a very kind of involved POC, demoed a POC tech review and staged process in our sales cycle like a lot of products do, it’s not necessarily unique. But being able to leverage the SDR function to feed that as a as a force multiplier to not have to spread the attention of our AES into pipe building and business generation but allowing that collaborative work between an AE working with their STRS to focus wins to get to the kind of leverage wins and go back in and seek target accounts or the inbound the inbound conversion rate process from the marketing system to the outside. and working with our AES and collaboration for that reference, it’s just been a lie. We’ve been using that term force multiplier, but it’s really been improving efficiency for us.

Justin Edwards 5:09

For sure. And you guys are a really great example of that, right? Like, how many, how big is your sales development team right now?

Unknown Speaker 5:18

With the Jake 11, EP 11. Yeah.

Justin Edwards 5:22

And then so when you when you think about that, you’re at about 60 reps right now. And so those 11 STRS are supporting the 60 reps. And we’ll get into kind of the ratios of what that looks like. But I couldn’t agree, agree with you more on the force multiplier, and gaining that efficiency of separating the two jobs because if 70% of the sales person’s time is spent on, and this is kind of like to, to, you know, my embarrassment 70% of their time is administrative functions, and then only 30% in front of, you know, customers, and then you you have to, you know, develop pipeline. On top of that, it doesn’t give you a lot of time to actually be in meaningful conversations with customers. So, definitely. Any other comments? Thanks, Oliver. Appreciate that. I’m gonna call out on people. So apologize, I’m not trying to call catch anyone off guard, but I’m just wanting some, some dialogue. Tim, you were gonna say something?

Unknown Speaker 6:35

Yeah, no, I, I think the question you asked Justin is, what is the right time to do this. So like, from my experience, the right time is, as soon as you have a product market fit, you’ve got to start building out your distribution? And what does sales look like? And how do you take some of the functions of sales to your point off of this of the sales team? So that sales team is actually focused on a true customer that they can sell something to a better prospect? And how do you have STRS that generate better leads? So I think the answer to that question is, there’s never a bad answer immediately. And as you continue to grow, and as you continue to scale, it becomes actually probably more important. And you’ve got to tighten up what that looks like. So I’m very interested in this session, because I’m going through all that right now, as we continue to scale and, you know, from zero to one, and then one to many, it’s just a different ballgame. And we’re certainly the one that many category right now. And I think there’s opportunity on probably more on the secondary purposes, if we were going to look at the functions on this slide. Cuz the primary, you know, that was that was there day one that’s always going to exist? Yeah.

Justin Edwards 7:49

Yeah. And like, look, I think the justification for building out a sales organization is going to be the top one, right? The the main primary reason and that’s going to be your justification, like John to go to Preet to build out a sales development function, it’s the justification is really just efficiency and, and getting a velocity. And then so when you look at the lead qualification, it’s velocity and then or quantity, quality, and then velocity and then you’re creating a an area where you’re the force multiplier is that specialized support in a specific area. And there are different levels of conversations to be having in the organization. And if in it, any, any of you are having problems, having conversations, or not problems, but maybe a challenge, having a conversation or getting sales development reps, or the program kind of talked about, just reach out to me, we we can have a conversation around that. So when you think about when, when does it make sense, it’s, it makes sense when we invest in you. And so the CEOs will, will will will kind of get it. We do diligence on on the very front end of you know, before we actually write big checks to the companies that are on this call and to you guys and and one of my discussions early on with the CEO because I usually get a couple sessions with the the CEO and then the CRO leader is about this idea about sales development and and bringing that in house as an as a muscle. There’s lots of conversations around Do you outsource it? Do you bring it internally, but functionally, it’s when you’re scaling your organization. That’s when you bring in your your your sales, development conversation, and for the obvious reasons of increasing your pipeline. And you want to make sure that you have your AES in place first, and I’d love to get your thoughts on that because You can do it a couple of different ways. And I just want to understand what you know, what, what is everyone’s thinking around bringing in an AE prior to a sales development, or should it be the reverse?

Unknown Speaker 10:18

Well, I’ll chime in air. I’ve personally like to start with an AE. And some of that is really just like when you get that young sales talent, like giving them a little bit of a taste of what this looks like they have to hunt and gather on their own. They have a new appreciation for what their partner does when you bring somebody in to help them. And it also kind of hones some of their skills to prospect and determine what, where they want to spend their time.

Justin Edwards 10:47

Yeah, it’s a different skill set. I love that look, like being a generalist, you have to have all the skill sets. But if you’re going out, and we’ll talk about this a little bit later on in the in our conversation around like when, when you hire like who do you look for? Hiring someone that is an outbound specialist is different than an inbound specialist is different than a generalist. It’s a different mindset. It’s a different skill set. It’s, it’s kind of like it’s it’s a different way of going about closing deals, developing pipeline and closing deals. And I think hiring the AE, there’s an advantage to having them in place first, because you create the a good process. But you’re not necessarily probably going to be looking at Pipeline coverage in terms of making sure that it’s the right time to bring on the sales development team. Once your abs have too much pipeline or not enough, those are both indicators that it’s a good time to bring on a sales development rep, or two or three. And there’s an argument to bring in three at the same time and have a cohort only because of attrition issues and attainment issues. And statistically, you’re going to want to have some coverage on this sales development team. So appreciate the comment there. I think.

What are the different types of SDR?

Let’s talk about the different positions within sales development. We’ve got research. And Is everybody familiar with the research business sales development? Jenny’s shaking your head? No. I’m, I’ll go ahead and explain it. It’s the entry level sales development position in a company. It’s perhaps some of the faster growing companies like at Adobe and and merit CX when I was running the global program there. I liked it because I could go to a college. And I could I could hire someone prior to them even graduating, the last six months of their senior year, they could be working and doing research as a as supplementing zoom info or lead enrichment, and doing activities to get into the sales organization. There’s quite a bit of stickiness, when you do this, it’s a different way of thinking about hiring for sales. Um, you’re hiring someone that’s super talented, but doesn’t have a lot of experience. And I really liked that element of it. So the research role really is sales development works on this concept of velocity. And if you’re calling people in succession, or you’re emailing, and they’re bad emails, that’s a problem, right, you’re gonna get your contact rate is going to go way down, which is a metric we’ll talk about a little bit later. A lot of the key metrics activity metrics aren’t going to be showing up because simply you don’t have good information. And so it’s always where I start in an organization. In three previous organizations, it’s a role that I’ve hired for as an intern, and then work them into a full time role. And I really love it. Because it’s actually better than zoom info. It’s better than any data that you can go purchase, only because it’s more current. And they’re using LinkedIn and they’re updating your your CRM, and filling out profiles within your target account. So I really love that position. outbound and inbound, we’ve talked a little bit about the nuances of that, but outbound I’ll just briefly discuss. It’s really cold outreach via email or calling. And it’s typically going to be against a target account. And in best, best in class organizations. It’s going to be about Account Based Marketing. And you’re going to have that air cover supplied by marketing, and you’re going to go in and you’re going to do 360 On an account, and you’re going to be hitting multiple contacts within an account. And you’ll see that in the enterprise and mid market and less so in the small business segments. And then inbound is a, it could be a sales development inbound rep, or it can be a lead development rep. And what they’re doing is they’re qualifying inbound leads, and making sure that those leads are attended to so they’re looking for response time rapidness really kind of making sure that the lead that has raised their hand for information via a website or via email or via call is attended to nurtured identified as a potential lead. And then a meeting is set up subsequently based on the request. Any questions on the different types of SDR roles? Or let me ask, is there a role that’s not represented here that you guys are aware of?

Unknown Speaker 16:00

Justin, I got a question. On the outbound SDR app. Do you ever see like any limitations or like certain boundaries put in place around who they’re allowed to talk to? Or who an SDR is allowed to reach out to or anything like that? Or is it pretty open game?

Justin Edwards 16:21

It’s a great question. You can have different levels of outbound. You can have enterprise sales development reps outbound. And so you can segment those and have the easier conversations and tear up based on seniority. So that’s a great question. Definitely. Within each of these categories, there’s different seniority based on skill level. And I see Tim, shake your shake shaking your head? Yes. Is that how you guys are set up?

Unknown Speaker 16:53

Yep. That’s how we’re doing it, we’re almost doing it is like career pathing. So we’re taking the associates and like the people that really rise to the top and develop better skills, we move them along the continuum of this, somebody people don’t ever graduate, that’s okay. Because you might be great at outbound. And you might not be so good at inbound, or, you know, face to face customer. So we’re using it almost like a career path.

Justin Edwards 17:21

That’s a great point. A lot of times you’ll have a career path within one of these different levels. Research is pretty basic. But once you hit into, it’s actually should be research inbound, outbound, if we’re doing it from a career path perspective, and levels of seniority, and, but but so the whole kind of idea that someone can be excelling and not want a promotion is something I encountered at ziprecruiter, when I was doing an engagement with them, and they were on the road to a billion dollar valuation, and a couple of 100 million in revenue. I think I I engaged with them when they were at 100 million. And we were looking for areas to optimize their sales organization, and one of the areas was letting reps stay where they were, like not making them go to different levels in the organization, if they were successful, but also providing it as a career path. option to say, here’s the advancement and really laying it out. And having that be the feeder program for the sales or other areas of the business. And we’ll talk about that. But I love that point. Tim, any other comments on this?

Unknown Speaker 18:40

One thing I might mention, as well, if you don’t mind, know, Justin was we have a variation on this theme that is channel specific, we have some specialists that we that we have on our STR team that work alongside our channel account managers. And we’re now with our target account approach, we can kind of look at it like a Venn diagram, where we have our outbound specialists for our target accounts and our Account Based Marketing with that marketing air coverage, like you’re referring to, and then the channels who are going to help us acquire new channel customers, um, channel partners, I should say, and then take registered deals from our channel and as well work with our cams for their certification and training. But still having that kind of center part of the Venn diagram be the cam, so a partner has sort of a single throat to choke or whatever, the non violent versus the single hand to shake, or whatever you want to say. And so yeah, we just seen some really good benefit from having channel specialists as well.

Justin Edwards 19:35

Yeah, you can definitely if I have a chart in the appendix of this deck that you everybody has access to, that talks about the complexity of sale being starting on the left side, simple lower quadrant and then upper right. It ends up being complex and based on the complexity of of a sale, you’re going to have different ways that you can take an outbound rep and make them a special shortlist, a channel specialist, or it’s just going to be a nuanced conversation. So anytime you have a nuanced conversation with an important customer base, then you may want to think about doing some segmentation there and creating a specialty role. I’m curious to know, at what point did you start with one and then have you grown that team or is it stayed at one and that person is just responsible for that, that pipeline creation for that channel,

Unknown Speaker 20:30

we did start with one originally, and then actually created some some further specialization to it specific VARS. And then print Alliance manufacturers because the two different organizations were very much differ in the way that our AES interact with them. And then type of deals that we typically encounter enterprise size, or mid market, SMB from the IP space. And then also brought in an MSP specialists now as well as we worked through our multi tenant platform to bring in more managed service providers. So we now essentially have three. That’s awesome.

Justin Edwards 21:04

I love that because you’re testing right, and you’re bringing, you’re bringing in a rep, and you’re setting them against the segment, and you’re supplying them with messaging, I’m sure I’m sure. Because I know your organization and work with you guys intimately. And you’re you’re creating this successful traction, and you’re like, at a certain point, you can scale that right you can, you can add to a good recipe. So to speak for that specialty, right? That’s right. Love that.

What’s the career path of an SDR?

Um, just want to kind of talk about this slide a little bit, because it goes into the details of the leveling. And we’ve talked about career pathing. And I think it’s important to understand that every level has, has three gates, you certified, you’ve been in the seat for a while, and you have performed in the seat. And those are three important areas to be considering as it relates to when is someone ready to advance to the next level. And then also creating that, that that opportunity for that individual to really just kind of stay in performance, if that’s what they want to do. I’ve known people that have made, had great careers on sales development, and have stayed in sales development and not gone on to a more quota carrying closing role. And that’s perfectly fine. But just keep that in mind that you don’t want to necessarily force people into a career path that is upward and onward. Because when they get to the next level, what we found at zip recruiter, is the numbers too big, maybe they don’t want to actually learn a new specialty, there’s just so many nuances maybe purse for personal reasons, someone doesn’t want to take on additional responsibility because they’re caring for someone at home or something. So you just want to be sensitive to the fact that the leveling is great. Because it provides a clear path, but it doesn’t have to be taken. There’s a study out if anyone’s interested a millennial study done by Qualtrics and red point. And it points out that if you provide reg regular promotions and a career path, that you’ll get a millennial on the average of 10 years, that was my big takeaway. So you don’t have to read the 40 page report. I just gave it to you. And when I read it, it’s it’s like it’s an interesting kind of thing. Where goes against convention, people think that millennials will move and they’re, you know, seeking that next experience. And there’s all these different things that had been layered onto the millennial group, and Jen’s ears now as they’re coming in. And I’m actually even seeing some high school students doing some some very entry level, revenue and operation cells on tasks. So as we get this newer crowd in, if they’re given an opportunity to be trained, certified, ie, and then they know what the next level is and what they need to do, and then they perform, then that opportunity is given to them, you’ll keep them on the average of 10 years. Super important to think about that.

What are the first steps to establish the SDR function?

So the steps to establish the function, I this is pretty obvious, but you got to start with what are you trying to do? And you have to outline that to your CEOs. Or if you’re making a justification to your CRO, you have to say what are we trying to do? What are we deficient in, and have that be the baseline of the whole organization. If you’re deficient in pipeline, like you’re not a 3x ratio coverage for your pipeline, then you’re gonna want to start Thinking about adding an additional layer, doing some sales training on pipeline development for the closers because you have to self source and closing the gap. So you need to know is your organization providing is marketing providing 30% of your number is business development team providing another 30% than what’s the gap that’s going to always be self source. So closers are always going to have to be trained on how to do you know, pipeline, because even the best organizations, I’ll take that back, HubSpot is an engagement that I actually did where they have 24,000 months monthly leads, and they’re only getting to 7000. And so their problem is different. They have to sort through and understand what is a good prospect right away, and then define the pain. Whereas in a flipped in reverse funnel, it’s, what’s the pain? Are they a good customer. And it’s, it’s an interesting way of thinking about qualification, but you have to have some kind of outcome in mind.

You have to tell your leader, make sure you get by like mindset, the organism organizational design, start small, create a budget, a little budget, go skunkworks on it, John, if if you need convincing, you no need to convince Preet, for example. And basically to start small, and and a CEO will actually with with some of the you know, some some information and some outcomes that you’re looking for, and some measurement, you’ll be able to get that justification. You got to start with a good process. Because when you bring in sales development on a bad process, all you’re doing is automating failure faster. And so you want to make sure that you’re you’re you have some good basics, right. That’s why the whole account executive thing is really important to make sure that the account executives have documented a good sales process. And if there’s no sales development reps in play, then you can go to the sales closers. And you can see what their process is for developing pipeline, what’s worked, what hasn’t worked. And then you can start from there. And then know what you’re looking for in your hires. I’m really glad vision joined today. Because they’ve done some really interesting things with diversity in hiring and going out and being mindful about the team that they’re building. Timur Oliver, do you mind kind of walking through who you look for in a candidate? Is it someone with like, 10 years of sales development experience that doesn’t exist in St. George? Or is it someone else? Yeah.

Unknown Speaker 27:55

Yeah, I’ll chime in on all of our kind of pile on here. But so for me, I actually like younger talent. And though that was mentioned earlier, so ideally, like college graduates, because they seem to be young, hungry, they want to work in these fast growing industries. They like the idea of startups and tech. So they already have the desire, they already have the motivation. I’ve created like a list of profile attributes I’m looking for, and even interview questions. But what I’m really looking for is somebody who’s like self motivated, hard working good organizational skills, likes recognition and reward, because let’s face it, this is a version of sales. So it’s like, if you hit this, then you’ll get a nice pat on the back, or you’ll get recognized that our weekly meeting, right, like so I want somebody that’s hungry for that competitive by nature. But I personally prefer the young, hungry talent, not somebody who’s done it for somebody else. It feels like you’re hiring somebody else’s mistakes. Not that that doesn’t exist in the world. It’s just harder to find.

Justin Edwards 29:06

I love that. I’m Oliver, anything to add.

Unknown Speaker 29:10

I’m actually going to defer over to Jake. Jake’s done a tremendous job with this. And he’s really selected a lot of really strong candidates. So Jake, why don’t you jump in there?

Unknown Speaker 29:17

Yeah, I’m looking at the kind of the common denominator that the SDRs who have been promoted the account executives over the last couple years have had and they are all it’s not that they’re that they’re young, but they are on the same make fresh out of college, looking to make a difference, wanting to start a new career. Not a lot of them had any sales experience at all, but they came in super, super hungry and they were all extremely coachable when I’m interviewing people. That’s like the biggest thing I try to tell in the interview if they are coachable if they’re driven and not so much motivated, but they have discipline. You know, we’re much bigger on them being able to be disciplined because it’s motivation is Great, but lifter discipline to be able to come in to work or if they’ve been an athlete in the past, and they have the discipline to go to practice every day, and you can tell that they have that drive, where failure is not an option. I’m looking at the the account executives that started out at STRS. And they all had that in common. Yeah.

Justin Edwards 30:22

I remember probably a couple of years ago, we were at a sales kickoff, and I was looking around and and I was talking to, to, you know, Jed, the CRO at Bayesian about the diversity of the team. And you guys have done a tremendous job. Number one, identifying that there was a lack of diversity in the room and then doing something about it. Can one of you guys talk about that, while we’re on the topic?

Unknown Speaker 30:55

Mmm, happy to take that as well. So I think at the time, we were heavily male, and not to go male, female, but that’s that was overwhelmingly what the what the team look like, right. And, and we just kind of saw that as a problem. That was cool. At the time, we had one one female str, and she was our top performer. And she had been the top performer for a few years. And so taking that dynamic into like the recruiting and what we were actually looking for, in a really quick amount of time, within a year, we were able to pretty much do a 5050 male, female, and that’s added so much to the team and like just the diversity, and not only male, female, but like further from where they grew up, we had people that were from all over the United States that came here to come to school, or to play sports, or whatever the case was, that we were able to hire. And that gave us a very diverse team, both in background and, you know, male, female.

Justin Edwards 31:51

Yeah, and I, as I remember the conversation, thank you for that, um, I remember the conversation, it was, um, I asked where she actually came from, where, where they found the best sales development rep in and she was a hairdresser before. And, and, you know, what that kind of like, taught me was that, number one, talent is going to be found in different shapes and forms and places and, and diversity of thought is, I mean, the research is there, if you have a diverse team, you’re going to perform better, so that the performance aspect kind of aligned with that. And then the fact that you guys have gone and built out this diverse team that happy to say that I think Josh is on the phone, but three or four consecutive quarters of quota attainment. And whereas in the past, it was just maybe a couple of percent below. And now you guys are over achieving on the number, it just kind of like is a really great use case for having a diverse sales development team. Frankly, in some areas, you’re not going to find a lot of experience in in SAS based sales development. And so you’re going to have to go and think about different ways of recruiting. So just wanted to hit on that point. Thanks. Thanks, guys.

Understand what makes a good SDR in your organization and hire traits over credentials

So we talked a little bit about this. And, you know, I think it’s, it’s an it’s an important element to this, because our conversation has been about, you know, kind of like, Who do we look for? And we had we kind of like built out what do we need to get a justification for a sales development team? And then who do we look for and this is going to be important moving forward, so that you can have some kind of system and identifying candidates quickly, and maybe some disposition or personality profiling up front. So that you can quickly go through 20 or 30 candidates, then bring in 10, for cohort, and then actually hire two from that cohort of interviews. And so that’s kind of how I’ve typically done it when I’ve needed to scale on sales development teams is done kind of like these really sprint interviews that last a day where you bring in a couple of cohorts. 10 maximum, and they go from interview to interview, and you just kind of have 10 people that you’ve signed up in your company to do interviews. And then at the end of it, you’ve had some kind of scoring. Well, you need to in order to score a candidate and everyone needs to be asking similar questions or different questions, but that you know what the scale is, you know what good looks like what you’re actually looking for. Vision. Love the example where you guys kind of know who you’re looking for. And it’s not necessarily odd, the obvious, right? So we’ve identified that. In most organizations in today’s selling, I’ll go ahead and say that friendly and helpful is going to outweigh salesy and persistent in some I’m in situations and inside sales, persistence off the charts, persistence and assertiveness, those two dispositions. When I was hiring and interviewing candidates, or managers, I would look for these kinds of dispositions that were very high on assertiveness and persistence. So knowing what that is, and moving on, on on the data is actually really helpful.

When do you need inbound vs. outbound reps?

Here’s a little glimpse into outbound versus inbound, and some of the things when do you need outbound versus inbound? I’m just going to basically say, whatever your pipeline quote is going to be less than three acts, you’re gonna probably want support. If your sales attainment is less than 70%, because that’s industry average. So then you stop talking about the quality of your team and their ability to to prospect, and now you’re dealing with more of a mass scale problem that you might need to kind of identify areas to develop pipeline in your quotas. And the the number that you have assigned is not aligned, you don’t have you can’t actually get your number because you don’t have enough, you know, headcount for that.

When your target accounts are fixed, your your your world is finite. So you’ll see this in kind of like specialty areas, verticals. When there’s an ABM strategy, a good strategy is going to have inbound and outbound alignment and coordination. And then if you’re doing events, like most people are doing events, it’s always a great place to have your sales, development, Team qualifying talking, talking to customers and those kinds of things. Am I missing anything on the outbound side of things I.

Guess not, on the inbound side, product lead growth, if you have a try before you buy model or a trial, it’s a great place for an inbound rep to be inserted. If you’ve got a demand generation set up, that’s another great place. You have to have a marketing team that’s established. And another area is if raw leads are being sent to the sales team. That’s a really great place to start with an inbound function.

How many SDRs do you need?

Okay, so how do you size your teams love to get get some feedback on ratios, and then I’ll share some experiences I’ve had with different organizations and how they set up their ratios.

Unknown Speaker 38:20

Think we’re a little more like almoner. So we’re like 50 tuned as satins we’re not quite, you know, we’re not looking at necessarily one to five, one to six. But we’re nowhere near three to one. Where we’re at the we’re a little bit more mature. And I feel like where we’re at as a company, we’re probably pretty close to the right number, plus or minus one. Okay,

Justin Edwards 38:48

I’m on inbound. At what point are you in this is monthly leads per LDR 100 per rep. Is that kind of where you’re at Tim?

Unknown Speaker 39:05

Yeah, I’d love to have the problem of of imbalance in our business. It’s not it’s not quite the problem that we have it all of our our prospects are coming in from the outbound we do generate some inbound from marketing. What we’ve done with that function is we have the marketing team, they’ll act as if they’re emailing out on the reps behalf or posting on the reps behalf and those leads will come in and then we then funnel them back for the actual salesperson the ad to make the reach out to connect with that person because by that point in time we’ve we feel this is a lead that is already in many ways confirmed and verified because they’re coming to us. We don’t have enough of this honestly. But yes, we just channeled through marketing.

Justin Edwards 39:54

Yeah, um, I think it’s just an area that you need to evaluate right. It’s One of the things where you constantly evaluate and you try new things, and, and hopefully, you know, it’s it’s, it’s an area where you can go to Marketing. And if they’re not supplying enough for the pipeline, then it’s that conversation on testing different things, right? trying different things and all that. The question always comes up. Here’s a question from Danny. Danny.

Who should manage SDRs?

Unknown Speaker 40:29

Hey, Justin, I had a question for you. Is it appropriate? Or in your, in your? Have you seen over the years of mixing and matching the responsibilities of inbound and outbound? Should it be segmented to only inbound? People handle inbound outbound people and outbound? Or do you see problems with some people doing some inbound work, majority outbound things like that? I just was curious to see, you know, your thinking on that?

Justin Edwards 40:53

Ya know, it’s a great question. And it’s one that comes up all the time. Um, so, so inbound is easier, obviously, if you don’t have to outreach. And so I do have a strong preference to separate the two functions and not have it be both. I think you’re deficient in outbound if you have one person doing outbound inbound, because what’s going to happen is they’re going to work the inbound leads, as more qualified. And it’s an easier proposition. And outbound is, is typically paid at a higher rate, because it’s a little bit more senior. And so at a certain point, you you’re paying for a more difficult activity, but they end up doing the less difficult activity. Does that make sense?

Unknown Speaker 41:46

Yeah, sounds nice. Yeah, absolutely. Just, I can definitely see that with the inbound. And I’ve actually seen a little bit of that happening. And I apologize that that was asked before I had to pop in late.

Justin Edwards 41:54

I just don’t know, it wasn’t asked and like, this is a conversation. So appreciate you asking. But yeah, if you allow someone to do inbound, this is kind of like we see this also in segmentation. If if you have a mid market floor at, let’s just say 100 employees, and 100 employee, if you’re a company, that’s 100 employees to 1000 employees, that’s considered mid market. And then and then over 1000 would be enterprise and then SMB would be under 100. Most of the time, you see a lot of the mid market reps will be gravitating towards the 100, Mark and below and use naturally at the different thresholds. And that’s what you see with inbound majority will be on the the inbound leads. So that’s why I would say don’t don’t have one person do both. You’ll be overpaying. I guess. CEOs don’t like that. Yeah. Cool, great question.

How do you design compensation?

Let’s just move on compensation. You got, you have to align, like the compensation, behavior follows compensation. So you need to make sure this is tight. And that it’s driving the outcome that the business needs. And there’s two different there’s maybe three different metrics, opportunities, created meetings created, and then actual revenue closed, or a combination of the three. Um, I’ll tell you my feelings, and then you guys can tell me how you feel about it. But I’m tying to an event that could potentially happen in six to 10 months isn’t a motivator for behavior. Therefore, I don’t recommend you tie sales development efforts to revenue outcomes. Generally speaking, there could be some situation I just haven’t run into it yet. meetings I really like because there’s a velocity to that opportunities created, ends up being a good metric as well. And it ensures that pipelines created but a lot of times, AES, use the SDRs as kind of personal admin and follow up. And so I don’t like that dynamic. So if I was to be forced into a corner by CEO, I would tell them, let’s let’s do the meeting set, because that’s the outcome that we’re looking for the sales team can do what they’re paid to do, which is close deals and qualify opportunities to the point where they can make a decision. Now, that’s my my thinking on it. I’d love to hear what you guys have to say. Yeah.

Unknown Speaker 44:37

I can definitely corroborate. I mean, we’ve definitely experienced that exact thing. We’ve had a few attempts at variations on that theme of how we talked about stage two being our demo and our sales process. Stage three being a pursuit of trial set up to get the the POC going the POC lined up for customers and is there a benefit to engaging an SDR in that process beyond the initial demo? We’ll set up or in the channel side blending where we can have them be involved in training or certifications, or basically like to your point extending beyond the initial baton pass of a tee up, and then having a clear delineation of where their success is achieved and where it moves on to the next facet of the sales process. And when that does blur a little bit, it almost invariably turns into a, you know, administrative assistant work or, or just really pushing the lines of, of where they’re assisting and where that’s kind of part of your tangential responsibilities, but not really in the gray area. leads to a lot of problems. Yeah.

Unknown Speaker 45:37

This is a great slide for me, because we do pay for close deals. And it’s probably one of the bigger factors and I agree with meeting schedule, the velocity, I like that approach better. Yeah, someone else is gonna come in.

Unknown Speaker 45:57

We’re currently doing more of an option one, and I’m, I’m experimenting a little bit with the option two. And then when you go to actual bookings, or revenue created, from doing a little experimentation there to just to kind of see like, Could we have people work along a continuum and graduate from setting meetings, creating the real opportunity to potentially even driving an outcome and still keeping them in a version of the SDR role without going to the today role. So it is an experiment, it’s not something that we’ve got stood up that we’re, you know, hiring into, we’re basically taking the current cohort and then subdividing them or segmenting them based on where we feel like they have skills and trying to just see what happens basically. Yeah.

Justin Edwards 46:47

Emily, you are gonna say something? Yeah,

Unknown Speaker 46:50

this is an interesting slide for me as well, because we’re going through a shift in this right now, at my previous company, we measured BDRs, based on opportunities created, and then they also would get a percent of the closed deal if it ended up closing. What are your thoughts on a combination of those? The reason I’m asking is because right now, my videos are only Azure based on opportunities created, but we’re moving towards trying to get them to focus on more enterprise accounts. So I’ve been considering that close 1%. So wondering what your thoughts are on that,

Justin Edwards 47:25

you know, how is the activity? So are you trying, I would go back to, it seems like it’s more of like an incentive and less of a motivator for behavior. Is is a rep going to and possibly depending on like, you know, the the nature of the reps that you’re hiring, and what’s motivating them. So we talk about HR, on the HR side, the motivating factors, and, and basic hygiene factors, right. So once your hygiene factors are met, then the motivation factors kick in. But the problem with motivation factor is that everybody’s different. As soon as Emily’s driving in a 911, maybe you don’t want anything else, right? And so, so, like, it becomes really hard to like tie revenue to unless you just want to create an a, an incentive and performance reward. But but just know going into it that it probably won’t impact daily behavior. Unless that person’s motivated. Does that make sense motivated by the thing out there in the future, and they can they can keep track on it. There’s things I’ve read on, the ability to do that is pretty slim, that reps at early reps are distractible, they’re really maybe potentially don’t have their hygiene factors met, which means that they’re just going to be driving that incremental revenue, which is tied to the meeting or the opportunity. So I think you could argue, argue both ways. But just know that it might be just an incentive, and be okay with that. Yeah, I know a lot of people do that.

Unknown Speaker 49:21

Yeah, no, I agree. And honestly, in my old company, we moved away from that models as curious to hear that. I think that the meeting schedule is also interesting because we have an extremely high conversion rate to opportunities. So that can mitigate as we move towards the more enterprise sales as well.

Justin Edwards 49:39

Right? So if you have a high and you’re always constantly looking at the funnel, and so if you have a really high conversion rate on you know, your opportunities, then I’m like more meetings place and see what happens. Because that if there’s a strong correlation, then your revenue is gonna go up, right and it’s a lever. And that’s, that’s another thing we didn’t really touch on, we will just maybe in a slide or two, but the metrics side of things is super important for sales development to be able to understand what lever do I need to flip based on what the business is asking me for today. And it gives you that control. Because if you’re only working bottom of the funnel opportunities, then there isn’t really a science behind the revenue number and being able to scale that number. For sure, thanks. Yeah. Good thought, Emily. Love that. Okay, let’s move on. I’m just,

Kate Hopkins 50:43

uh, we’re

down to the last couple minutes. So it might be good to highlight any any final key questions, and then I’ll flag I stuck a link in the chat for future topics of interest.

Should SDRs optimize for quality or quantity?

Justin Edwards 50:49

Perfect, I love that. Thank you for the warning. This is like obviously a topic near and dear. There’s always a conversation around quality and quantity, we can have an offline conversation about this, um, it’s just going to be dependent on what we actually are trying to accomplish from a business perspective. And we’ll want to address different things. And we’ll look at the funnel to do that. And metrics.

What’s the tech stack?

The tech stack is the tech stack. I’ve had lots of conversations about this. It’s like I am so agnostic to technology. What I am really, like, kind of passionate about is, is finding a good process and then automating that process with a piece of technology. I really love that. And like, let’s look at all the sequence tools, Cadence tools, or whatever. SalesLoft outreach mix, Max, I’ve used them all. I’ve even use like hub spots. Gotta go really cool. Caden still. So I don’t know that it necessarily is that technology is going to drive performance or productivity for you. It’s the automation of the process, that’s actually proven out to be good. So that’s, that’s my technology slide.

Important pieces to get right and common pitfalls

And then let’s summarize here. Get your processes, right, we were just talking about that with the technology state tech stack, design the role, right? Like, you know, what is the outcome that you need from the business and then design a roll around that. Don’t just go out and hire a couple of 10 year veteran sales development reps, really understand what you’re trying to accomplish, and then kind of do some deeper thinking into who you’re hiring. And then measure and manage it and monitor. And that’s going to be the growth levers that we’re all looking for. When I on the original slide, the efficiency, the scale, all of it is tied to being able to kind of flip the levers for the business when they come to you. If your manager or CEO comes to you, and wants some revenue, you know exactly where to go to get it. And then obviously, don’t be stuck with any, you know, sacred cows. Let’s just basically iterate. And this is a process of development. So it’s been awesome talking with you guys today about this.

General QA

Does anybody have any outstanding questions? Otherwise, we can just share the deck and the materials and you guys can have access to it and we can talk to as well

write him awesome information. Appreciate it. Thanks for joining everybody. Again, just reach out if you have any questions, and we’ll be sending out another topic here shortly, for next month. So appreciate it. Thank you. Thanks, everyone. Thanks.

Unknown Speaker 53:55

Thanks, Kate.

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