{"id":395,"date":"2011-09-08T14:00:52","date_gmt":"2011-09-08T21:00:52","guid":{"rendered":"http:\/\/bobbacon.net\/blog\/?p=395"},"modified":"2014-02-14T15:05:14","modified_gmt":"2014-02-14T22:05:14","slug":"sales-development-representatives","status":"publish","type":"post","link":"https:\/\/bobbacon.net\/blog\/archives\/395","title":{"rendered":"Resource Specialization: Sales Development Representatives"},"content":{"rendered":"

\"\"<\/a>\u201cSales Development\u201d is a description composed of two words, the discrete meaning of which is clear but in combination the definition of the phrase can be ambiguous.\u00a0 For example, it can used to mean sales training, as in \u201cdeveloping\u201d the sales force.\u00a0 Even within the context of generating sales the term can apply to Marketing or your overall GTM strategy.<\/p>\n

For the purpose of this discussion, and the most common meaning in the B2B world,\u00a0we will define Sales Development as the process by which unqualified leads are managed and converted into sales qualified\u00a0leads.\u00a0 According to a recent RainToday<\/a> report, less than 25% of new leads are sales-ready! \u00a0It does not matter that qualification of those leads can be performed by a Sales Development team in a call center environment or by an Enterprise Account Executive in the field.\u00a0 Sales Development describes the process, not necessarily the title of the person performing the job.<\/p>\n

So what exactly is the Sales Development process?\u00a0 It is comprised of steps that are a subset of your end-to-end funnel management methodology but before the formal pipeline stages as discussed earlier in my blog here<\/a>.\u00a0 For the purpose of this\u00a0article it is three small but critical tasks:<\/p>\n

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  1. Contacting an unqualified lead,<\/li>\n
  2. Conversing with that lead to determine readiness to make a purchase,<\/li>\n
  3. Classifying the lead for various activities from immediate sales action to unqualified.<\/li>\n<\/ol>\n

    The integration of a Sales Development specialist\u2019s activity into the lead classification or scoring process can have one of several possible outcomes.\u00a0 The ideal outcome is that the lead is ready to buy and should be immediately contacted by a selling resource.\u00a0 For those leads not ready to become instant customers there may be several possible different classifications depending on the shared sales and marketing methodology for ranking leads.\u00a0 Many lead scores result in some level of lead nurturing but this topic is beyond the scope of this commentary.\u00a0 Suffice it\u00a0to say the best lead scoring systems use demographic and firmographic attributes, such as company size, industry, and job title; as well as behavioral scoring such as clicks, keywords, and web visits to measure what Eloqua<\/a> labels their \u201cdigital body language<\/a>\u201d.\u00a0 An excellent resource for more information on leads nurturing and scoring may be found here<\/a> on the Marketo<\/a> web site.<\/p>\n

    In markets where potential leads are willing to accurately self-identify, Sales Development may also be conducted using electronically collected criteria and automatically placed appropriately in the funnel by virtue of the classification.\u00a0 In some other instances the Sales Development process can be outsourced to a third party (e.g. Annuity<\/a>, Wheelhouse<\/a>, Mercury Leads<\/a>, Launch Leads<\/a>, and others) whose sole responsibility is to fill the sales funnel with sales-ready leads as defined by your qualification criteria.<\/p>\n

    In any case the concept of Sales Development isn\u2019t new.\u00a0 Competent organizations have always included some permutation of this as part of their overall sales methodology.\u00a0 In the past it may have been under Marketing and called Outbound Tele-Marketing.\u00a0 The more recent trend seems to place this responsibility under Sales as part of the inside sales, corporate sales and\/or as a dedicated Sales Development team.<\/p>\n

    The movement towards a dedicated team of people responsible for Sales Development is an effort to optimize the use of your various resources.\u00a0 Let\u2019s examine the basic economics of this trend.<\/p>\n

    Assume it requires the same amount of time for a Sales Development Representative (SDR) to classify a lead as it does for an Account Executive (AE) and an SDR’s OTE is less than half that of an AE, then sales-ready leads generated by an SDR are less than half the cost of an AE generated sales-ready lead.<\/p>\n

    The next issue to be addressed under this structure is one of balance.\u00a0 You need just enough sales-ready leads to keep the rest of the organization busy with discovery, demonstrations, trials, etc.\u00a0 The ratio of SDRs to field sales representatives could vary depending on the length of your sales cycle for your products and market. Perhaps the best way to determine the proper role ratio is to analyze the time required per sales-ready lead, your pipeline conversion ratios, average deal size and then calculate the required quantity of unqualified leads you need at the top of the funnel.\u00a0 Depending on the quality of your metrics you may need to adjust the ratio based on experience.<\/p>\n

    Speaking of quality, the more subjective dimension to this endeavor is that SDRs will generate leads of higher quality than your field resources for three reasons; focus, skill set and practice. If one\u2019s sole responsibility is to generate sales-ready leads without the distractions of the other steps required to close business then both measurable productivity\u00a0as well as\u00a0quality should result.\u00a0 Additionally, the repetitive and transactional nature of Sales Development requires an entirely different skill set than those conducting a complex sales methodology.\u00a0 Finally, practice makes perfect or more precisely, perfect practice makes perfect, so the properly guided, repetitive task of contacting many prospects will build stronger qualification skills.\u00a0 On the other side of the same coin, your field resources will only focus on sales calls with qualified prospects which will similarly result in a shorter sales cycle and higher productivity.<\/p>\n

    The net effect is that specialization within your sales organization should serve to generate a more predictable pipeline with a higher, accelerated\u00a0conversion rate.\u00a0 While specialization is considered by some a \u201cbest practice\u201d among leading B2B sales organizations it is not the necessarily the best model for you.\u00a0 In some cases (e.g. very narrow or emerging markets) a hybrid role could be created combining limited outbound cold calling to targeted lists with Sales Development.\u00a0 In other cases of high volume, short sales cycle transactions, the person responsible for Sales Development may also\u00a0bear the\u00a0responsiblility for closing the sale.\u00a0 This later telesales model sub-optimizes the economic gains cited earlier but, none the less,\u00a0may be appropriate in smaller organizations.<\/p>\n

    If you are interested in building a Sales Development team there is a great “how to” article here<\/a> by Mary Gospe<\/a>, Co-Founder of KickStart Alliance<\/a>.<\/p>\n

    As always, I am interested in your\u00a0input on this subject. \u00a0Are you using an SDR team now, and if so, how is it helping your overall productivity?\u00a0 What is your ratio of SDRs to field resources and why?\u00a0 What types of customers, products\/services, or sales processes are best served by this approach?\u00a0 What challenges have you had in integrating your SDR team in the Marketing\/Sales ecosystem?<\/p>\n

    I encourage you to post your comments and experiences\u00a0with Sales Development\u00a0in the space below.<\/p>\n

    Cheers!<\/p>\n

    Bob Bacon
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