10 Reasons Why Your Company Should Implement Sales Development

It is no coincidence why the fastest growing companies in the world are also leveraging Sales Development to accelerate their go-to-market strategy.

For anyone who still needs to be convinced of the business case, I offer the following 10 Reasons Why Your Company Should Implement Sales Development.

1. Sales Development has become a competitive necessity

The adoption of Sales Development is growing every year. Companies of all sizes have incorporated Sales Development into their growth strategy in highly competitive markets.

Below are just a few proof points that demonstrate the increase in adoption of Sales Development.

The Bridge Group’s 2018 State of Sales Development Metrics and Comp Report had 434 companies participate in their research who had implemented a Sales Development practice. This was a 25% increase over the number of participants they had in their 2016 report.

This year (2019), InsideSales.com topped that with the release of their report titled, “The State of Sales Development: How 1,000 Companies Build and Execute Successful Sales Development teams”.

In his post, “The State of Sales Development Talent Market”, Jordan Wan of CloserIQ points out  another interesting statistic. He shares how there are currently over 75,000 people on Linkedin in a SDR position.

In late 2017, LinkedIn published a report of their own titled, “LinkedIn’s 2017 U.S. Emerging Jobs Report”, where they rank the Sales Development Representative (SDR) position as one of the top 5 fastest growing professions.

Scott Maxwell of OpenView Venture Partners is famously quoted in The Sales Development Playbook for saying, “Every company we invest in either has or will have a sales development team. Unless the price point of the product is so low that it’s impossible to justify, sales development is a necessary ingredient. It’s kind of like having a CFO”.

This speaks volumes as to where we are in the state of modern business-to-business sales.

2. Sales Development has proven to accelerate new customer growth

Through repeatable processes, technology tailored to your business and a well-trained team, Sales Development offers a means to predictable growth.

From 2014 to 2017, I personally worked on four (4) consecutive Sales Development implementations/expansions. Each team averaged roughly $14 Million in newly qualified opportunities in their first year (across 5 SDRs). Every opportunity was properly inspected using a closed-loop feedback system to ensure the opportunity was indeed initiated and stewarded by a Sales Development Representative (SDR). This essentially means we were proving that these opportunities were incremental to company’s funnel and likely would not have been sourced without the SDR team.


According to the same 2018 report from the Bridge Group, the median pipeline generated per SDR is $2.7M (based on 434 companies).

3. Sales Development offers a tangible return-on-investment (ROI)

Successful Sales Development teams are essentially self-funded. In most cases, an SDR will effectively pay for their salary with the new opportunities they uncover each month.

According to GlassDoor, the National annual salary of an SDR is $51.000. The SDR role is generally performance-based and therefore also includes an annual variable incentive bonus. The average amount of this bonus, per SDR, is roughly $21,000. This brings the average on target earnings (OTE) for the SDR position to $72,000.

Add in another $3,000 to $6,000 per year, per SDR for the necessary IT infrastructure and a tech stack (CRM and other sales acceleration applications), and your annual investment for three (3) full-time SDRs comes to roughly $230,000.

Now, let’s say you have an average deal size of $50,000 and in their first year your SDR team successfully generates a conservative 360 newly qualified opportunities for your sales team (10 per SDR, per month). If we apply a modest win rate of 15% which would be 54 deals, you would be looking at a return of nearly $2.5M.

A client of mine who I worked with recently to implement a Sales Development team of only 2 SDRs, was able to generate $300K in new sales in only the first six (6) months. Shortly after going live, the two new SDRs began to conduct outreach and were able to uncover several new opportunities and a handful closed very quickly. Conceivably, the first year investment of the SDR team has already been recooped. This doesn’t even factor in the $3M in qualified opportunities the team has uncovered which are currently forecasted to close in 2019.

4. Sales Development improves funnel velocity

Simply put, your SDRs help to ensure your sales team spends more time with better prospects, who have a propensity to buy which shortens your average sales cycle.

Not only is the goal to provide healthy volumes of new sales cycles for closers, but just as importantly, the role of an SDR is reduce the number of ‘bad’ leads that make it through to the sales team and become a huge time sink.

Timing, authority, pain, budget and other qualification requirements are normally part of a the SDR-to-Sales lead hand-off. The discipline of this qualify-in/qualify-out step at the top of your funnel makes it so only the best possible opportunities wind up in your forecast.

According sources such as InsideSales.com, companies with a Sales Development practice see a 7-point increase in win-rate when compared to companies without the function.

5. Sales Development maximizes marketing investments

There’s no question that having SDRs at the top of your sales funnel optimizes lead development and lead conversation. But, there’s more to how they help you make the most of your marketing dollars.

Branding

From a brandinging perspective, SDRs raise your awareness in the market. Their daily outreach activities only extend the reach of your brand and helps to keep it top of mind through personalized, one-to-one engagements. Every voicemail that your SDR team leaves and every email that they send strengthens your company’s brand.

Market Intel

The market intelligence that your SDRs gather from their daily interactions with leads can be instrumental in your product marketing and development. This is particularly critical for early stage companies who are still shaping their product strategy. An SDR has anywhere from 10 to 20 (or more) meaningful conversations with leads every day, and in every conversation they’re gathering at least one piece of valuable information. That’s at least 600 pieces of valuable information each month with only three (3) SDRs. Do you think your marketing team would want to tap into those insights?

Social Media

The most effective SDR teams go beyond calling and emailing. They flank their leads on all sides, this includes LinkedIn, Twitter, and any other social platform where your target prospects might be hanging out. Ultimately, the social selling strategies that your SDRs engage in every day amplify your social presence which directly maximizes those social media dollars.

Content Marketing

Too often, Marketing teams will create truly impactful assets that end up being underleveraged. With a Sales Development team in place you can rest assured that your videos, whitepapers, and blog posts are getting the extra mileage they deserve. Links to recorded webinars and other marketing assets are typically incorporated into various touch points within the SDR’s outreach sequences.

Web/SEO

There’s nothing worse than having an ideal lead submit a Contact Us request just to have the lead be neglected and/or not replied to for days (if at all). Having a Sales Development team in place guarantees the best possible lead response times which directly maximizes your web/seo investments.

Marketing Automation

Your SDRs maximize this investment by leveraging the lead scoring and lead insights (amongst other things) that your marketing automation platform provides. This helps them to prioritize and personalize their outreach efforts so that the can be proactive with passive leads who might be displaying buying signals. Naturally, this extends to your email marketing campaigns as well where SDRs can leverage open and click-through insights to time their outreach attempts accordingly.

Marketing Events

SDRs don’t just follow up on leads after your events. The truth is, no one is better at driving attendance to your webinars, your conference booth, luncheons, dinners, and all your other events, than your SDRs. But it doesn’t stop there, SDRs are excellent resources to leverage during events as well. Here’s an example: To prevent no shows where leads had agreed in advance to a booth meeting, my SDR teams would text pictures of the exhibit floor with our booth marked to a) help leads find the booth, b) remind them of the meeting (conference attendees are easily distracted), and c) keep an open channel of communication in the event that they are distracted and need to pivot to a different time or location.

6. Sales Development ensures a world class experience for potential customers

There are no second first impressions, therefore, providing the best possible experience to potential new customers becomes vital to your company’s ability to compete effectively.

Your SDRs are your front line and ensure a consistent experience across all inbound channels.

Your leads are most likely vetting out multiple competitors in your space and therefore, the rule we practice is: the first company to have a meaningful conversation with the lead, wins the deal. Your SDR team is your secret weapon with getting to prospects first.

While the Account Executives of your competitor’s are busy and traveling, your SDR team is hyper focused on responding to the leads as quickly as possible and providing a VIP experience.

7. Sales Development is “Plug and Play” with traditional Sales and Marketing models

Setting up a Sales Development team can be relatively easy, if you know what you’re doing. Or, if you have help from someone with experience.

Sales Development is like a universal mount that allows you to take your sales to the next level. It slides right in between any traditional sales and marketing org and is typically operational in a very short order.

It has a reliable framework that can be applied to virtually any business model and due to its broad candidate profile, staffing a new SDR team can be done fairly fast.

The time from when your first SDRs start, to their first booked discovery meetings/demos, should be no more than three to four weeks. It’s off to the races from there.

8. SDRs are better at prospecting than Account Executives

What would happen if you took an Account Executive out of the field and had them do the work of an SDR? How long would they last? How well would they perform compared to an SDR with around 9-12 months of experience?

Sales Development requires a highly specialized skill set, just like marketing and just like being an Account Executive. Each role is different discipline.

Day in and day out, SDRs are singularly focused on one thing; prospecting. They don’t see it as a burden or as though it’s taking away from some other pressing matter.

An SDR with 9-12 months of experience has made thousands calls, crafted thousands of emails and engaged in hundreds of sales conversations. They know the competitive landscape. They know the angles. They know who the movers and shakers are in the industry. They can eyeball a lead and within moments devise a strategy that will engage the lead.

“Each man is capable of doing one thing well. If he attempts several, he will fail to achieve distinction in any.” – Plato

9. Your Sales Development team is a great talent pool.

While SDRs are indeed mastering prospecting skills, they’re actually learning much more than that.  

They have visibility into the entire sales process and due to their proximity, headquarter based SDR teams are often immersed in various areas of the business such as marketing, sales operations, engineering, etc. Couple this with their experience on the frontline with customers, and you’ll find that your SDR talent is uniquely positioned within your business. Given the opportunity, SDRs can take on positions in all sorts of areas. You will find that not every SDR aspires to be an Account Executive or to have a life in sales.

10. The timing couldn’t be better for Sales Development

The information and resources around Sales Development is catching up to its rapid adoption. We have books, conferences, technology, consultants (like myself), trainers and countless thought leaders, all dedicated to the advancement and success of the Sales Development discipline.

With that said, all of these resources can be overwhelming and confusing. Or, you might just not have the time to work on setting up an SDR team. If so, please contact me to discuss how I can help you.

Final comments

After over 20 years in B2B sales, I believe Sales Development is the link that has been missing from traditional Sales and Marketing organizations. It literally bridges the gap between both groups and I have chosen to dedicate my career to helping companies harness its power.

Increased revenue is definitely the primary reason of implementing a Sales Development practice, but I hope after reading this you will have gained a broader perspective of its value.

Derrick Williams

3Link Consulting LLC

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