In the latest episode of CRO Confidential, host Sam Blond, partner at Founders Fund and former CRO at Brex, sits down with Ashley Kelly, VP of Global Sales Development at Rippling. For context – Ashley had previously helped Sam scale Brex’s outbound sales from $2M to over $300M in ARR as Senior Director of SDR.
Together they discuss:
- Scaling outbound sales and SDRS (sales development representatives) from 0 to $100M and beyond
- How to hire the right outbound sales team
- The SDR interview checklist
- How to create an environment to set up outbound sales reps for success
- Which KPIs to measure and matter most in outbound SaaS sales
- Increasing the quality and closed-won revenue with your outbound sales team
Let’s dive in!
Getting Outbound off the Ground in the Early Days
Whatever stage your company is in, you can map wherever you are to outbound and use this article to either create, scale up or improve your outbound SaaS sales.
For Sam, when he was originally building outbound sales at Brex, they were focused on not purchasing a sequencing tool or system that provides contact information and then blasting that ICP. Instead, they approached it more strategically.
- Start with who you are targeting in your own network. For Brex, that meant starting with first-degree LinkedIn connections in their ICP.
- They leveraged their investor network, which included YC and other non-YC investors.
- Asked for intros to portfolio companies.
Once they moved beyond warm intros and connections, they moved on to more creative outbound programs.
- Sam has talked about their champagne campaign, where they picked a few hundred companies in the Bay area and sent a bottle of champagne and a note.
- They put up a bunch of billboards throughout San Francisco and targeted people in those areas.
- People with connections to the company also downloaded white papers and other things more likely to work than blasting the universe.
Ashley joined Brex at $2M in ARR, and she was tasked with taking what existed and scaling it. Her first assignment was hiring SDRS. For Sam, an SDR has always been the most challenging hire within the sales organization because they are often fresh out of college or moving from a different career path, and they don’t have historical performance and back-channel references to lean on — yet you rely on them for net new business.
So, how do you identify the right profile to recruit, given the limited real-world experience of an SDR?
Hiring the Right SDR Profile
“If you can hire someone you trust first, do that,” Ashley shared. With SDRs, especially in the early days, they’re likely fresh out of school or in the early stages of their career, so you can’t point to previous work experience and ask if them they were hitting quota or top of the board.
So instead, Ashley focused on the key characteristics of what makes an SDR successful:
- Whether they have the ability to navigate change and failure
- How organized they are
- Hunger and motivation
An SDR organization is structured and rigid day in and day out, so they have to stay on top of workloads. You have to figure out why they want to be in sales and use those buckets to find a successful SDR.
Your first three hires (and maybe more) at the SDR level can all be in-network hires. If you can make in-network hires, the probability of success is much higher, but that doesn’t scale. So when sourcing candidates or reaching out on LinkedIn, what can be done at the top of the sourcing funnel to identify potential people before having that first conversation?
When thinking of the SDR profile, you can look at schools they’ve gone to first. Ashley has had great success with “work hard, play hard” schools. A lot of athletes are also successful because they know what it means to work hard. They’re coachable and they have learned the importance of time management to be successful. Sorority and fraternity backgrounds and those who’ve gone through internships that require balancing school and workflow are also great potential candidates. When hiring a profile fresh out of college, you want someone with real-world experience, like a recruiting or selling background, not necessarily in tech sales. Find the candidates who are hungry to break into tech sales for those early hires.
— SaaStr (@saastr) January 10, 2024
The SDR Interview
We’ve determined the profile we want to hire for dedicated outbound folks, so now, let’s look at the interview itself. How do you suss out the characteristics described above?
It’s usually a simple interview with a hiring manager screen first and then an actual interview panel. Those buckets of coachability, hunger, organization, and the ability to navigate change all have specific questions that roll up to that need. Whether it’s an SDR manager or a peer, each person must drill into those themes. At the end, everyone fills out a scorecard to see if they meet those buckets. If they’re driving the conversation in such a junior role, you can have a lot of faith that they can do that on the phone.
Ashley has hired over 1,000 SDRs in her career, and there’s one question she always asks: Do you love to win or hate to lose more?
It’s kind of cheesy, but everyone who loves to win but hates to lose even more will stop at nothing to win. Those are the people she wants to hire. When talking about hunger and motivation, it’s not to be in sales or to make money. It’s about not wanting to fail and wanting to grow your career and take a company to the next level.
Create an Environment that Sets SDRs Up for Success
SDRs are the most junior employees in the company, so it’s important to create an environment where there’s clear direction. Not micromanagement, but structure. Ashley shared how she achieves this.
“There’s a fine line between micromanagement and process and structure,” she said. SDRs thrive in structure. If you’re hiring candidates where this is there, it’s worth it to have that structure in place. You don’t need rev ops or enablement to create structure. But first and foremost, you need to figure out what a successful day looks like for a rep. Ashley has done this by creating calendar blocks of times for reps to make outbound calls, write emails, and follow up with accounts. She gives them clear KPIs on how much sales activity is expected of each SDR.
In outbound, what you do today is what you get tomorrow. So for outbound reps, it can have highs and lows, so celebrate the small wins even if reps are struggling to overcome bigger objections. Eliminate checking-the-box type of activities, too, and get to a point where you have an SDR sales equation where you know someone’s quota, how many meetings they need to schedule, and define what working with an account really means.
Key takeaway — you want the right balance in outbound sales between structure and autonomy.
If you can get reps to buy in on the process, you can keep building out your structure and process. IE – setting a clear quota for outbound SDRS, and working backwards to determine how many accounts and outbound activities are needed to hit quota. You want to have the right balance. In the early days, there’s likely more autonomy and experimentation, and later on, more processes will be in place that already work.
And as you bring on new SDRS, have them shadow the top performer in your company, replicate their process, and add their sauce. It’ll teach them how to be successful in seat but also give them the right balance to allow them to bring their own take and skills to it.
How to Determine What to Measure
You don’t want to tell an SDR to make 50 dials a day or send x number of emails because they’ll focus on the activities themselves and not the outcome. So, how do you determine what to measure?
It can go in two different directions:
- What is the right performance metric?
- What should quota be?
Quota will depend on the segment you’re selling to, your product, and how expensive it is. A more actionable approach is determining what the quota should comprise and what you should incentivize outcomes for.
Some questions you should ask yourself are:
- What are you solving for?
- What can the SDR control?
Some businesses set up a revenue target that is out of an individual rep’s control. Brex did this, but it’s dependent on where you’re at. If AE’s have too many demos, you start to look at the quality threshold and do more discovery upfront. It’s important to think about where the business is before you swing the pendulum all the way down to the revenue side of SDR work.
In the early days, the metric that Sam and Ashley measured their SDRs on was sales-qualified opportunities. At Brex, they were in a clearly defined sales opportunity rubric that took into account the level of seniority, the type of company, and if they showed up for the call.
But then as the team got bigger, and the further down the funnel they went, they realized they needed to shift the balance to quality over quantity.
The Age-Old Issue with Outbound Sales: Quantity or Quality?
“In the early days, there are two things that likely exist,” Sam explained. “The first is solving for quantity: the bottleneck for growing faster is getting more demos on calendars, more opportunities in the pipeline. And so it makes a lot of sense to incentivize these activities with SDRs more.”
You’re using SDRs to solve for qualified opportunities, but not necessarily conversions further down the funnel. And so as the company progresses, you see things change and start to realize you have a bit of a quality issue. You start to run into AE’s questioning why their calendars are full from SDRs booking demos with accounts that won’t move past an initial call or demo.
As you scale outbound sales, once you hit this wall, you’ll want to move to measure these things:
- If they aren’t already, put your AE’s on their own individual outbound sales-qualified opportunity quota
- Once they are, measure the quality via closed-won revenue and opportunity-to-close percentage
For Sam and Ashley, the AEs created outbound opportunities that closed x3 more revenue than the SDR-sourced opportunities. Once they saw this in the data, they switched from sales-qualified opportunities as the top KPI to closed-won revenue. Once you have confidence around account and lead scoring and your ability to predict, at the account and persona level, the likelihood that they’ll convert and the amount of revenue that company will generate for your business, it’s probably a good time to shift quota from sales-qualified opportunities to revenue.
At Brex, once SDRs were moved from a top-of-the-funnel metric to revenue, the team was able to scale faster, the business closed more revenue and inidivual outbound and sales reps were happier in seat since their commissions were a lot higher than they were previously. Bear in mind if you switch to a revenue and sales cycle takes 6-8 months to close, that may not work for your company because it’s taking too long for invidiual reps to see any type of commissions. Sam and Ashley recommend that if your deal cycle is mostly <30 days, you can move SDRs to a revenue quota, but a longer 30+ days sales cycle might make more sense to stay on a sales-qualified opportunity quota.
Scaling the Team, Hiring More SDRs, Progressing Careers
Last but certainly not least, as you scale outbound sales and you hire more SDRs, think about ramp time and how long it takes to get them up to full productivity.
“I think every business should think about SDRs as being like the future leaders of their company,” Ashley concluded. “Whether they stay in the SDR or if they move into accounting executives, marketing, recruiting, customer success, or management. If you can hire someone that you trust, in-network, why not promote from within, where there’s a lot less risk?”
- Hiring the Right SDR Profile: Hire your first or early SDRs based on key characteristics like coachability, ability to navigate change, organization, hunger, and motivation, rather than solely on work experience. Focus on strategic outbound sales rather than mass marketing. Levarage first-degree LinkedIn connections and investor networks for introductions to potential clients.
- Creating a Supportive Environment for SDRs: It’s essential to provide clear direction and structure for SDRs, balancing between micromanagement and autonomy. This includes setting clear KPIs and defining what a successful day looks like for a rep. Early stages may involve following more of a formula, while later stages should balance autonomy and experimentation.
- Measuring Performance: The focus should be on outcomes rather than just activities or objectives like the number of calls or emails. Initially, sales-qualified opportunities might be the metric, but as the team grows, a shift toward quality over quantity is necessary as you move toward closed-won revenue and opportunity-to-close percentages.
- Career Progression for SDRs: As the team scales and more SDRs are hired, consider the ramp time to full productivity and the potential for SDRs to advance into leadership roles within the company.