7 Learnings: Building Your First, Great Sales Development (SDR) Team
By Kyle Richless, Head of Sales Development at Axiom Law
SDRs (also known as BDRs, MDRs, and LGRs etc.), are typically early-career professionals who specialize in building consistent pipeline for AEs by acquiring and/or qualifying leads.
Congruent with the greater trend of specialization in B2B sales, Sales Development teams have never been more prevalent. According to a Bridge Group survey of 342 B2B SaaS businesses, ~60% have an in-house SDR team. If you exclude companies below $5M in revenue, 67% have an SDR team. Amongst those with an ACV above $100k, that number jumps to 89%.
So long as SDRs consistently generate the right sorts of leads – those which fit the companies’ ideal customer profile – conversion rates [from SDR generated leads -> qualified opportunities -> to won deals] hold true even as pipeline increases. And stronger, more consistent pipeline yields greater and more predictable revenue. Aaron Ross made this ideology famous.
While SDRs drive sales pipeline, they themselves can (and should) be your organization’s talent pipeline. There’s no better way to cut your teeth in sales or marketing than by grinding though the hard yards of prospecting.
From the get-go, SDRs are on the phone with targets, operating out of their comfort zones. And the skills learned—persistence, grit, relationship building, a customer-centric focus etc. — help drive success in future roles, whether as an AE or in other leadership positions.
For those of you looking to build or optimize an SDR team, below are 7 things I’ve learned from creating one of these sales development engines from scratch.
1. Talent Attraction is the Most Important Thing
There are a number of essential ingredients needed to build and scale a winning SDR team. The right onboarding plan, KPIs, AE/SDR alignment, message/customer fit, clean data, talent management etc. all contribute to optimal salesperson productivity and consistent, high-quality pipeline. Miss on too many (2+ from the above list) and an SDR team won’t justify the required investment it takes to build.
But one ingredient is more important than the others: top SDR talent. Miss on that and your team is almost certain to fail.
Why? Because great people find a way to be GREAT, even when a number of obstacles stand in their way. Before the onboarding process is optimized, before the messaging is fine-tuned through A/B testing, before the team manager has established their coaching chops, great SDRs still manage to a win.
I’ve seen this play out time and time again.
Conversely — as many SDR teams learn the hard way — even with a refined process and framework, hiring mediocre SDRs yield mediocre results over the long haul even if all of the other ingredients are in place.
Thus, talent attraction needs to be the number 1 priority of whoever administers the team. SDR managers, that’s you. Organize your time accordingly.
If your organization is yet to hire a dedicated SDR manager, determine whether there is someone within your sales or marketing organization with the prior experience, bandwidth and appetite to get their hands dirty screening, evaluating and — depending on internal recruiting support — even sourcing candidates.
If the answer to the above question is not a resounding YES, it would be wise to table the idea of building an SDR team, at least for the time being.
2. Create an Ideal Talent Profile – and do it early
Hiring great people is everything. But simply acknowledging that fact doesn’t mean it won’t be hard to find, close or even identify top talent. This is particularly the case at the outset – when just starting the team.
Before a half dozen or so reps are up and running, it’s hard to know exactly what “Good Looks Like” specific to your organization. Every sales team is idiosyncratic. In other words, your SDRs have to be “just right” for your organization.
To find the magic formula, take a stab at creating an Ideal Talent Profile.
Once you’ve made double-digit hires this becomes easier. You can analyze your current SDR hires and distill which attributes and skillsets drive success [or lack thereof] across the team.
Each additional rep serves as an additional data point, so revisit and fine-tune the ITP as the team grows.
Bear in mind that an SDR may beat quota and outperform peers due to reasons outside of their effort or skill. A big or warm territory can aid in over-performance. Similarly, being paired with a particularly invested AE can bolster individual SDR results. Discount for these things if possible when weighing the most sought after traits [and, generally speaking, when force-ranking an SDR team].
If you’re building a team from scratch and don’t have SDRs/data points to reverse engineer a talent profile, borrow it from another company in a similar industry or with a similar product.
By way of example, here’s the formula I’ve settled on:
- Sales Motor:
- By “motor” I mean working with a sense of urgency – demonstrating consistently high activity levels day in, day out, whether ahead or behind quota.
- This is critical. Fortunately, it’s intuitive and easy to test, particularly over the phone. During a screening call (which you should implement in the evaluation process) this will be readily apparent.
- Intellectual Curiosity:
- To be a successful SDR is to be part detective. You want lifelong learners, not know-it-alls. A curious candidate asks thoughtful questions throughout the evaluation process. And they are well-researched about your company’s mission, product etc.
- Sales DNA:
- Administer a case study. Maybe also a personality assessment test if you believe in their efficacy. Test whether the candidate instinctively frames a [hypothetical] product around solving customer problems. It’s also telling whether they intuitively push for next steps in the buying process.
- Coachable SDRs grow the most quickly, and AEs more readily invest in them. Use what we call the “Absorb & Apply” test – give the candidate feedback during the case study and evaluate with what ease and attitude it’s incorporated by the candidate when redoing the exercise.
- Cultural fit:
- Evaluate whether the candidate exhibits the company’s core values. Get feedback from their potential AE partner – who should meet them pre-hire – about personality fit. Compare the personalities between this candidate and other potential SDR hire(s). Close-knit teams are more productive [not to mention happier and in-seat for longer tenures].
3. Hire in Tandem – Start 2 or 3 SDRs Together
Given the investment (time and money) associated with building an SDR team, it is tempting to start with a single hire and wait to establish proof of concept before further hiring. After all, two SDRs may cost the same as one AE, and the latter directly closes deals and generates revenue.
Resist the temptation to dip your toe in the water. Start 2 or more hires together; the ROI will justify the more expensive plunge. If you don’t have the budget to start at least two SDRs concurrently, consider waiting until you do.
Hiring a single SDR creates for a lonely environment to do a tough job. And without a point of comparison, it’s hard to accurately assess how an SDR is performing, particularly for the first few hires as KPIs are not yet right-sized and therefore quote attainment can be misleading.
Hiring in tandem solves for both of these problems. SDR groups learn from one another and share best practices. And if one hire doesn’t work out, the pipeline disruption will be less dire.
Most importantly, SDRs who start in tandem push one another at each stage of their development. Like a thoroughbred at the track, your highest performing SDR is a pacesetter, raising the game of their SDR peers.
And don’t underestimate how much pride motivates. Whoever is trailing the leader, particularly if performance is visible in a CRM dashboard, will surely be trying to raise their stock.
“Compassionate competition” does wonders for SDR performance. Encourage it.
4. Build an Onboarding Road Map
The sooner you build an Onboarding Road Map the better. Ideally it is waiting on a new hire’s desk when they walk in the door on their first day.
The maps should provide structure and direction to guide an SDR through the onboarding process, avoiding a new hire from blindly trying to find their way [and losing confidence in doing so]. It can also help to minimize the [massive] managerial burden required to train a recent college grad.
Built in benchmarks allow SDRs and managers to self-assess how a rep is progressing against the predetermined schedule.
In addition to timelines, the plan should illustrate early on-boarding priorities.
And for learnings that require a teacher (e.g. CRM, sales enablement tools), assign a colleague, ideally peer SDRs, to teach the new hire in brief, 30 minute 1:1 sessions. Even better, if you can budget for it, automate these lessons by creating onboarding “micro-videos,” leveraging any of a growing number of external LMS providers.
It should take ~4 months for a new hire to be fully ramped i.e. assume a fully-loaded quota. An SDR who comes with prior work experience may shave a month or so from that schedule.
I’d suggest segmenting the plan across these 3 macro themes:
Welcome & Orientation (week 1):
- Meet coworkers/build internal relationships – never will a new hire have more time to grab coffees and pick the brains of colleagues than the first week on the job.
- Dig into the various systems and tools at their disposal. A new hire may never had used Outlook before much less other tech and tools.
Training Certifications & Role plays (weeks 2 & 3):
- Email training & certification
- Collection of winning email/LinkedIn InMail templates from peers and manager
- Draft mock emails, personalizing the collected templates for a hypothetical prospect. Edit and improve based upon manager feedback
- The SDR is ‘Email certified’ after a series of mock outbounds are reviewed & approved by their manager/the salesperson they’ll support
- Phone training & certification
- Shadow/listen-in on as many phone prospecting sessions as possible
- Conduct a series of telephonic role plays with colleagues acting as mock prospects
- Again, the manager should certify a new hire when the rep proves that they are “client ready” during the practice role plays
Go Live Period (weeks 4-13):
- Once a rep is green-lighted for outreach across channels, they should begin ramping towards the fully loaded quota.
- Month 2 – 40% of goal
- Month 3 – 70% of goal
- Month 4 – 100% of goal
Finally, create an addendum to include answers to general questions or common instruction given. You’ll be surprised at how quickly this sections grows. And it becomes a time-saver for the team manager.
Similar to the Ideal Talent Profile, revisit and tweak the map before each new hire starts to implement the learnings from every completed onboarding process.
5. Fine-tune Compensation plans to Drive Focus
The compensation structure is one of the strongest incentives for driving SDR behavior.
Comp plans should include a base & variable component. Bonuses are typically 20-40% of the base salary.
While OTE will vary depending on company size, industry and cost-of-living in expensive cities, all great SDR comp plans have 3 things in common:
- An SDR should be able to explain to a friend how they are paid in one sentence i.e. “Schedule 20 qualified demos/month, completed by an AE partner.”
- Frequent Payment
- Bonus payment should closely follow action.
- Quarterly payouts are ideal, as the 3-month timeframe is long enough to offset an up/down month, but not too infrequent to incentivize a rep to take their foot off the gas or throw in towel (which WILL occur with annual payouts).
- SDR Controls Their Own Destiny
- An SDR should feel as if they have control over their ability to obtain quota. In other words, don’t tie the goaling to business closed. In a long sales cycles, the SDR may not be paid for months or even years.
- Tying bonus payouts to closed revenue may also incentivize the rep to do back office support for AEs to ensure their leads matriculate down the sales funnels (instead of exclusively focusing atop the funnel, generating pipeline).
- If a qualified lead doesn’t close, the SDR will feel unjustly penalized, as they largely cannot control the skill or effort of their AE partner.
6. Emphasize the SDR/AE Partnership
Because SDRs “pass the baton” to AEs, the SDR/AE relationship needs to be harmonious, not a dividing wedge.
It is critically important the partnership maintains consistent communication, even as AEs calendars fill up with [SDR scheduled] meetings and other high-priority initiatives.
The SDRs and AEs should formally sync regularly (1x/week or more) to discuss account context, messaging, and to create a regular feedback loop on the SDRs pipeline. Most importantly, the SDR and AE need to align regularly on prospects.
Instill a process where the SDR brings a list of suggested prospects to the AE during this weekly sync for the review. The AE should add/subtract prospects and prioritize the list. This is the quality control measure that keeps the AEs and SDRs on the same page, reducing dead-end appointments and thus saving time.
And, if your organization deploys an Inside Sales team, have the SDRs listen in on the phone meetings they schedule. It’s rewarding for them to observe the fruits of their labor. And SDRs will learn from down-the-funnel conversations. Along the same lines, in field sales/outside sales organizations, SDRs should join a few live meetings per quarter.
You’ll know if your SDRs/AEs have developed a winning partnership by whether they’ve built deep trust with one another. This trust is necessary for SDRs to be able to “swim upstream,” gradually focusing on bigger, higher-impact accounts. These mini-advancements in SDR territory–facilitated by the trusting AE—will keeps SDRs engaged and challenged. And it will help to prepare the SDR for future roles i.e. to become an AE.
7. Find a Manager SDRs Love to Work For
With 3 or fewer reps, an SDR manager is a luxury – a nice-to-have – but perhaps something you can live without. SDRs can report to an AE – it’s not perfect, but it will save money. And it can help to buy time until an SDR “graduate” is ready for management or until the organization can find a great SDR manager on the market (which is not an easy task given the demand).
Once more than a few SDRs are on board, a team manager is a must. Nothing is more important in retaining your SDR talent than a manager who genuinely and sincerely cares about their reps. Even uber-fast career pathing (typically SDR-to-AE) has less of an impact on average rep tenure. And it’s a horrible waste of resources to invest in winning world-class SDR talent only to have them poached 6 months into their tenure.
SDR managers set an upbeat, positive culture for the team, built upon appreciation and respect. They stop to celebrate important milestones, sharing how individual SDR contributions helped the greater team achieve collective success. They create learning environments and share best practices with the team consistently, and in real-time. They reward high performers with new opportunities, stretch assignments, and exposure to senior leadership.
Above all, working for a great manager makes life as an SDR fun and rewarding in and of itself, not simply a launching point into a future sales or marketing career.