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Founder @ #samsales Consulting l Sales + LinkedIn + Sequence Expert l Keynote Speaker
Building an SDR or BDR team from scratch can be daunting.
What metrics can help you determine the best time to build a team? Do you have the right size team, deal size, and sales cycle to justify it? How will your tech stack need to change? Do you need to hire reps with experience or recruit from different industries? What’s the best way to begin?
In this episode of Closing Time, Sam McKenna of #samsales Consulting answers all those questions and more to ensure you’re prepared to launch a successful SDR or BDR program in your organization.
Building a new Sales Development Representative (SDR) or Business Development Representative (BDR) program is a decision that many companies struggle with. One way to determine if it’s the right fit is by looking at the correct division of labor and the opportunity that your company may be missing out on. For smaller organizations, led by founders, outsourcing or bringing in-house SDRs or BDRs can free up founders or whoever is running sales to take calls and close deals. At some point, it won’t make sense to pay your Head of Sales to prospect. Instead, having two BDRs on $40,000 each can be more effective in teeing up meetings for the founders or salespeople.
Here are some factors to consider:
1. Sales team size: If your sales team is small, it may not be necessary to create an SDR or BDR program. However, if your sales team is growing, it may be time to consider creating a program to support them.
2. Sales goals: If your sales goals are ambitious, creating an SDR or BDR program can help your sales team meet those goals more efficiently and effectively.
3. Lead volume: If your sales team is struggling to keep up with lead volume, creating an SDR or BDR program can help by increasing the number of leads that are qualified and passed on to the sales team.
4. Sales cycle: If your sales cycle is long, creating an SDR or BDR program can help by nurturing leads and keeping them engaged until they’re ready to make a purchase.
5. Budget: Creating an SDR or BDR program can be expensive, so you’ll need to ensure that you have the budget to support it.
6. Industry: Some industries are more conducive to SDR or BDR programs than others. For example, if you’re in a highly competitive industry, creating an SDR or BDR program can help you stay ahead of the competition.
7. Growth stage: If your company is in a growth stage, creating an SDR or BDR program can help you scale your sales efforts more quickly.
When it comes to the ideal ratio of Sales Development Representative (SDR) or Business Development Representative (BDR) to sales representatives, there is no one-size-fits-all answer. However, there are some factors to consider.
The dream ratio is one-to-one, but in reality, it’s best to have one BDR focused on no more than two or three individuals. The size of the territory is also a crucial factor to consider. For instance, one BDR focused on one AE for enterprise makes sense because it takes a lot of effort. In contrast, for midmarket or SMB, the ratio could be one-to-two or one-to-three, respectively.
It’s also essential to think about the nature of the deals, whether they are transactional or not. If there is a high deal flow with short sales cycles, then having more people to support the inbound leads and meetings becomes necessary.
When it comes to SaaS companies, there seems to be some confusion regarding the terminology and placement of SDRs and BDRs. Some argue that they should be on the sales team, while others suggest that they should be on the marketing team. Some also use the terms interchangeably, while others differentiate between them based on inbound/outbound responsibilities.
However, in terms of where they should roll up to, it is recommended that SDRs and BDRs should be on the sales team. This is because they are being trained to become successful salespeople and eventually move up to an Account Executive (AE) position. By having them on the sales team, they can receive proper coaching and support from experienced sales leaders.
At the same time, there are benefits to maintaining a relationship between the SDR/BDR team and the marketing team. Marketing can offer valuable insights and direction for the team, particularly when it comes to handling inbound leads and identifying new lead types. Daily stand-ups and meetings with marketing can be helpful for SDRs and BDRs to learn and ask questions.
It’s important to remember that SDRs and BDRs are often new to the industry and need direction and support. They are not individuals you can simply hand a book of business and expect them to succeed. By providing proper coaching, support, and a system of support, companies can ensure the success of their SDR/BDR program and eventually groom these individuals for success as AEs.
When starting a Sales Development Representative (SDR) team, there are a variety of ways to recruit team members, from hiring inexperienced candidates to stealing successful SDRs from other organizations. However, successful candidates should have a level of curiosity, strong communication skills (both written and verbal), intelligence, and teachability. Additionally, written communication skills are essential, so writing samples should be requested, along with a test that assesses their communication style and aptitude.
There is no industry standard ramp-up time for SDR/BDR programs; it varies depending on industry complexity and brand recognition. However, it can take at least four months to see results. When it comes to setting expectations, it’s crucial to keep them realistic, and leaders must understand that 11 meetings booked per month are achievable for an SDR/BDR. SDRs can be trained to start working in the SMB space and move up to mid-market and enterprise markets as an additional training aspect. Finally, it’s crucial to monitor small wins, such as improved response rates, booking meetings, and open rates, and use that information to make expectations realistic.
As your sales team grows and scales, so should your tech stack. Here are five of the most widely used sales development tools in the marketplace – you should plan to adopt, train, and onboard tools like these before launching your new SDR or BDR program.
1. A CRM (customer relationship management) tool like Insightly. Insightly offers an intuitive interface, integration with popular business applications, and automation features to streamline workflow and improve collaboration. With Insightly CRM, SDR teams can easily manage their leads and customers, track their progress, and stay on top of their sales goals.
2. LinkedIn Sales Navigator. Sales Navigator is a LinkedIn tool that allows SDRs to find and engage with prospects more effectively. The tool offers advanced search features to help SDRs find the right people to connect with, as well as insights into the prospects’ interests, activities, and connections. With Sales Navigator, SDRs can personalize their outreach, build rapport, and establish relationships with prospects that can lead to more sales.
3. Salesloft: Salesloft is a sales engagement platform that helps SDRs manage their outreach more efficiently. The tool allows SDRs to automate their email sequences, track their outreach activities, and schedule follow-ups. With Salesloft, SDRs can also personalize their messages, tailor their approach to each prospect, and get more responses.
4. Outreach: Outreach is another sales engagement platform that helps SDRs automate their outreach and improve their performance. The tool offers a range of features, including email sequencing, call tracking, and reporting. Outreach also integrates with popular CRMs, allowing SDRs to manage their workflows seamlessly.
5. Gong.io: Call recording and coaching tools like Gong.io help SDRs improve their communication skills and sales techniques. By recording their calls and analyzing the data, SDRs can identify areas for improvement and get feedback from their coaches or managers. Call recording and coaching tools also help SDRs stay on track with their goals and ensure consistency in their messaging.
These tools are important for SDR teams because they help improve their productivity, efficiency, and performance. SDRs can streamline their workflow, manage their leads more effectively, personalize their outreach, and get better results. Additionally, these tools allow managers to monitor their team’s performance, provide feedback, and coach them to success.
Is it time to start an SDR or BDR program in your sales team? Let’s talk it over in this episode of Closing Time. Hi, I’m Val Riley, head of content marketing at Insightly, and I’m joined today by Sam McKenna. She is the CEO of #samsales consulting, an award winning sales leader, and a brand ambassador for LinkedIn. Welcome to the show, Sam.. Thanks for having me, Val. So, Sam, during our pre call, this was my number one topic I’ve been at two companies that struggle with this decision and with the execution. So I’m so glad we’re here to talk it through. Let’s start with some math. Like what data points are the indicators is that an SDR or BDR program might be the right fit? I think when you think about smaller organizations, let’s talk about, you know, ones that are led by founders, we’ve got founder-led growth. We might have two or three co-founders who can close deals all day long, but they don’t know how to prospect. One easy thing we can do is to either outsource that or bring those SDRs in-house, even if we have one that is doing nothing but prospecting, that can free up the founders or whoever is running sales to take those calls and close those deals versus kind of trying to be all things to all people. Also, think about the correct division of labor there. If we are paying let’s say a head of sales $100,000 a year or $150,000 a year to prospect, we’re probably not getting our money’s worth for that because they’re so highly paid to do one thing, work with clients and close deals, not prospect full time. Hmm. OK, so my metrics were like more around deal size or contract value but what I hear you saying is it has a lot to do with your salaries, right? What you’re paying folks and what’s the best use of their time. That’s exactly right. And you what you want to think about, too, is, is there opportunity that you’re not going after? Right. And is it something to the point where still those founders or those early stage people that are in could do more because they know the product, they know how to close.. They’ve been in sales for a long time. But we just want to make sure that the right people are prospecting and bringing those opportunities in. If I pay a sales rep, $80,000, but I can pay two BDRs $40,000 each. Right. And just have them cranking on outbound work using the inbounds that we get and teeing those meetings up for either the founders or the salespeople, we can be so much more effective that way. We just need to start that program the right way. So is there an ideal, I’m back on the math here, is there an ideal ratio of SDR/BDR to sales rep, or does it vary based on other factors? The dream ratio is the one to one, but we never want to think about having that BDR focused on more than two, maximum three individuals. And you also want to think about the size of the territory they’re going after, right? So you might have one. BDR focused on one AE for enterprise because it takes so much work, whereas you might have a one to two ratio for midmarket or one to three ratio for SMB. It’s also really important to think about how transactional or lack there of your deals are, right? So if there’s a high deal flow and if those sales cycles are short, right? Thinking about how many people you have to support the inbound leads and to support all those meetings is also really critical. OK, that’s super interesting. So again, in my past lives at different. SaaS companies, there were, you know, some people called them BDRs and so people called them SDRs. And sometimes they sat on the sales team and sometimes they sat on the marketing team and sometimes they worked inbound leads and sometimes they were strictly outbound. Is there any like Bible on this or is it just up for interpretation across the industry? Everybody has an opinion, and I also think it’s as harshly faught as is cold calling dead or not. You know, you have your devotees that buyers and sellers roll up to marketing and then you’ve got your others that roll up, they say they should roll up to sales. I think people use the words interchangeably. There’s also some people who believe no. SDRs are for outbound BDRs are for inbound and that’s what it is. And then the flip. So I think you can use it interchangeably. But here’s what I would say in terms of where they should roll up to. And, Val, hopefully you and I will still be friends at the end of this. But I do feel strongly that SDRs and BDRs should roll up to sales because ultimately that’s what we’re training them to be. We’re training them to be great at sales and to ultimately move up into the sales organization, hopefully to be an AE.. Again, thinking of division of labor in our own investment especially as small companies. We want to make sure that if we’re putting in the time to train and onboard these individuals, that not only are they successful, but that they stay so we can get them to be an AE. So think about the difference that a sales leader can make and coaching those BDRs and SDRs correctly versus marketing. Now, there is a lot of theory of like, well, they’re handling a lot of our inbound leads, our MQLs, things like that, so we want to keep tabs on them, We can keep tabs on them, through reporting and dashboards while still giving them the coaching that they need. By rolling up to a sales leader. And one of my favorite scenarios when we had an SDR team that sat on the sales team was me as the marketing leader. I would meet with them every afternoon and just take a pulse like, hey, what went well today? What didn’t go well today? Because as a marketer, you’re always introducing new lead types. You know, this channel, that channel, et cetera. So I do agree. I think even if they sit on the sales team, they can really have a solid relationship with marketing. Completely. And I think to, just remember how green these individuals are, I think sometimes the higher we go in our executive ranks, the harder it is to imagine what it was like when things were so new for us. You know, we get questions from BDRs all the time when we help organizations stand their teams up. And the buyers might say something like, hey, I just got an inbound lead through LinkedIn. Should I set up the meeting?. And we’re like, what’s the question? Yes, right. And so they need so much. So it’s really important that you also have a system of support for them. These are not individuals you can bring on and say, Here’s your book of business, good luck, like you can a senior AE. These are people who are going to need that direction, right? And those daily standups so maybe those meetings with marketing every day to make sure they’re doing the job right and as a source to learn and ask questions, too. Sure. Yeah. OK, so you kind of touched on this a little bit about how green they are. So let’s say you’ve decided, OK, we are going to start an SDR team in our organization. Is it people that you bring in that have just a little bit of experience in sales and you onboard and train them? Do you try to steal successful SDRs and BDRs from other organizations? Some sort of combination?. Like, what’s the best practice? Yes to all. So one of the things I really look for when we’re hiring people are we’re looking for people who are curious, who are well-spoken, who can communicate, and who can write. We’re just looking for that level of intelligence, you know, and can you bring a process if we give you 100 people to go after, can you put a process together? Do you know how to chase those leads appropriately? Can we teach you? Are you teachable? But I’ll tell you one thing that’s really interesting is that writing component, right? So think about how important written communications are in sales. And this is something that you can also test for in the interview. We love to ask for writing samples, but for two specific kinds. So when we’re interviewing BDRs and this could be, again, somebody with no experience, it could be a transitioning teacher, it runs the gamut, but we say, give us a writing sample, two, three, 400 words. On something that you’re really passionate about. And then we’d also like a writing sample on these four questions we gave you. Now we give them four questions, but it’s actually three. And what we do is we bury a second question. So we might say something like, Val, we’d love to know what your favorite vacation was and why. And what we’re really looking for is to see when the buyer asks them questions, how will they answer and will they answer all of those questions? Because we’ve all been there right where we ask a question, three of them, the rep gives us two answers, and we’re like, OK, but what about that third question? So we test for that aptitude and that communication style in advance, and it’s a great sign of what they’ll be like when they get here. So I don’t think I’ve ever seen a writing test for an SDR or BDR role. So that is a fantastic takeaway. I love it. And let me ask you, this question might be hard to answer too, but is there an expected runway like an industry standard runway that an SDR, BDR program will need before you can start seeing it on the bottom line? It is a tough question to answer. It is so different depending on the industry, depending on how well-known that brand is. If we’re talking about something that’s, again, easy you know, something that we’re already familiar with, let’s say telecom or something like that, that ramp time is going to be much lower. If we’re talking about something incredibly complex, data science or AI-E Is that a word?. We’re going to go with that. But if we’re talking something along that line that might be really complex and especially for bringing them on board to do enterprise sales with something complex, just keep in mind, they’re going to need runway. At the very least, four months of runway, sometimes six, sometimes even more. Just thinking about how to vary and prorate their quota. But again, you want to just look for the small wins, the signals of success. Right. And I think that that’s with most anything that we do in sales or marketing the things we’re testing, we want to take those 90 to 120 days, and we want to look for those small wins. Are people responding? Is our open rate going up? Did we book two meetings last week and three this week, et cetera? And kind of on that front to we want to make sure that we’re keeping expectations realistic. So I meet a lot of leaders who say we want to bring on a BDR and we want them to outbound book 20 meetings a month. And I’m like, well, you know, when I was at LinkedIn, our mix and match of inbound and outbound expectation for SDRs was 11. And I think sometimes that’s really shocking. But it’s also a wonderful way to stabilize the expectation of a leader that a brand like that would only require 11 meetings because holy moly is that a tough job. Yeah I like how you said that bringing an SDR in and maybe having them start on the SMB space, then mid-market then going up to enterprise because that’s really like another a training within the job, right? You’ve already been trained for the job and now you have this additional training as you move up market. You’re so right. And you think about how this would apply when you actually get updated and promoted to being an AE. Right. I remember one of my favorite AEs told me I met with the marketing person at FedEx. You know, they’re not interested in moving right now. So I’m going to check back on that that company in six months. And I was like, well, what about the other 400 marketing people at FedEx? And he was like, what do you mean? You know? And I think that can be really eye opening sometimes that the true structure and nitty gritty of an enterprise organization. But even a mid-market one. So if we can teach our BDRs to learn kind of what that those account maps look like and how everything’s siloed by lines of business we’ll really help ourselves for the long run when we do get them promoted. So I do have one last question kind of about the tech stack. So let’s say you’re going from having just AEs and you decided to add on that SDR team. How does your tech stack change or does it? It does change, and I think it’s really important to have this in place and ready to go before your BDRs or SDRs come on board. So if you just have one sales person or let’s say two co-founders, one of the things that we don’t see happen a lot is the proper use of a tech stack. So they might not have Sales Navigator, they might not have something like Salesloft. So we want to make sure that the tech stack, at least the very basics are there for them. To me that starts with a CRM like Insightly, that starts with making sure that we have something like Sales Navigator. That’s the only platform you can have. Something like Salesloft. And then also making sure that we have something that allows us to record calls so we can do that call coaching. But even think about two things, right? With Sales Navigator, it’s such a powerful tool. There’s so much you can do in there. It’s really important that we make sure we enable them with the right training so they know what to do. But then also think about your Salesloft or your Outreach’s of the world, having the right messaging in there and also teaching your BDRs how to write that is critical. So don’t just rely on them to know how to do it because I assure you they won’t. So make sure you have the right training setup and the onboarding either internally or externally before you bring those individuals on, because the minute they step foot through the door, they’re on the clock they’re burning money, and we want to get them to be as productive as possible as quickly as we can. Yeah, your Salesloft points back to your writing test that you mentioned earlier, so you give them a tool to write emails, but, you know, can they actually write effective emails? You’ll be confident if you put them through that, that writing test ahead of time.. Exactly. At least we know they’ll know how to put sentences together now we just have to teach them how to do that in a sales centric way that gets buyers to convert. A whole nother realm. Exactly. All right, Sam, this was great. Again, was my number one topic, so I’m so glad we got to talk through it. Thanks so much for having me, Val. Great to talk about it. All right. That’s going to do it for this episode of Closing Time. Please go out there like this video, subscribe and ring that bell so that you will not miss an episode. And we’ll see you next time on Closing Time.