Selling to HR and have an inside sales function or are considering an inside sales function? If so, this article is for you.
SDR teams are expensive and tough to manage. When they’re working, it’s an amazing engine bringing new talent into the organizations and deals into the sales pipeline. When they’re not, it’s a major pain point felt by AEs, marketing, all the way up to the executive team.
In this article, we’ll walk through the changing landscape of how to organize SDR teams when selling to HR to get better results. We’ll also go over how a leadership development client of ours went from spending $70K/month on their SDR team to spending $25K/month for the same results.
How SDR Teams are Changing
As we navigate the ever-evolving landscape of sales, it’s becoming increasingly clear that the role and structure of SDR teams are undergoing significant transformations. And in this dynamic environment, the tides of sales strategies and technologies are constantly shifting. As we delve deeper into the specifics, we’ll explore how these changes are reshaping the way SDR teams operate.
- Increased Email and LinkedIn Traffic: Post-COVID, there’s been a surge in email and LinkedIn communications. HR leaders are now swamped with these messages, making it increasingly challenging to secure meetings through these channels.
- Underutilized Phone Outreach: Despite the availability of direct phone lines for cold calling, many inside sales teams aren’t capitalizing on this method. Often, there’s a lack of optimization in terms of quality control, data management, and technology for effective calling.
- Automated Messaging on LinkedIn: The prevalence of automated bots on LinkedIn has diluted the impact of outreach on this platform. The sheer volume of automated messages has made it more difficult to engage buyers through standard LinkedIn messaging.
- Economic Shifts Impacting Budgets: Economic changes, including higher interest rates and reduced venture capital funding, have led to more scrutinized buying decisions by HR leaders. Budgets that were once available for inside sales teams have diminished.
- Advancements in Technology: The advent of more user-friendly dialers and email marketing technology has made it possible for teams to manage these tools more efficiently, reducing the need for individual SDRs to perform one-on-one follow-ups.
- Changes in AE/SDR Dynamics: The traditional pairing of Account Executives (AEs) with SDRs on a one-to-one basis, or one SDR to two AEs, is becoming less common. With the evolving landscape, fewer SDRs are needed, and some companies are even choosing to forego SDRs due to management challenges.
In response to these evolving trends, the significance of full-cycle Account Executives (AEs) is markedly increasing. These professionals are now taking on a more comprehensive role in the sales process, encompassing the entire spectrum of sales activities.
Issues With How SDR Teams Are Organized
Now, let’s go over some common issues in SDR teams and pinpoint why things may not be going according to plan.
Diversification Beyond New Client Acquisition
While most SDR teams are primarily focused on acquiring new clients (‘new logos’), they can also be effectively utilized in areas like upselling to existing customers and supporting the marketing team in content distribution and event promotion.
Redefining Success Metrics
The traditional metric for SDR teams is the number of meetings set. However, with only a small portion of the market actively seeking purchases, it’s important to consider alternative measures of success, such as the effectiveness of content shared, engagement in events, and quality of information collected.
Challenges in SDR Management
Finding a competent SDR manager is difficult due to the unique nature of the role within the sales organization. Unlike other leaders or AEs, SDR managers often face different compensation structures, making it hard to attract and retain talent. The role demands a blend of strategic insight, trend awareness, coaching ability, and management skills. Meaning a subpar manager can significantly impact the team’s potential.
Over-Reliance on Traditional Sales Approaches
Many SDR teams lean heavily on conventional methods like cold calling and mass emailing, which may not always be effective, especially in a saturated market. A more diverse approach, incorporating modern techniques, and personalization could yield better results.
Lack of Clear Career Progression
The role of an SDR is often seen as a stepping stone within sales organizations, with unclear career advancement paths. This lack of progression can lead to demotivation and high turnover, affecting the consistency and performance of the team.
Key Results and Metric to Lookout For
- For HR products and services, a standard benchmark is set between 8-12 meetings per month for each SDR. Achieving or surpassing this quota is a strong indicator of an SDR team’s effectiveness and ability to generate viable leads.
- If an SDR team consistently falls below the threshold of 6-8 meetings per month, particularly in less challenging product or service categories, it signals a need for immediate strategy reassessment or team performance evaluation.
- A critical metric for AEs is converting at least 30% of initial calls to follow-up discussions. Falling short of this rate suggests potential issues in the introductory call approach or sales pitch effectiveness.
- Monitoring the quality of leads passed from SDRs to AEs is essential. High-quality leads should have a higher conversion rate into actual sales, indicating effective initial screening and qualification by the SDR team.
- Evaluating the ratio of leads generated by SDRs that eventually convert into closed deals provides insight into the overall ROI and efficiency of the SDR team in contributing to the sales pipeline.
Quick Case Study
A client of ours ramped up to 6 full-time internal SDRs and an SDR manager over a six-month period. They bought Outreach, Zoominfo, and Sales Navigator as a part of this ramp-up. On average, with all hard expenses (salaries, tools, etc.), they were spending $70K/month. They took an account-based outreach approach and focused on delivering highly custom outreach to target accounts vs LinkedIn and email, with calling being used sporadically. They were averaging one meeting per person each week or four meetings per month and were spending almost $3,000 per outbound lead.
What Went Wrong
They hired the wrong SDR manager, and it took them six months to figure that out. Because of the bad hire, they had a lot of underperforming SDRs, and they weren’t sure if it was the SDRs’ fault or if their manager gave them little chance to succeed. They fired the SDR manager and promoted their best SDR to a player/manager coach while they figured out what to do. Slowly, they either let go of the rest of the team, or the SDRs quit. The good news, though, is that they were down to two very good SDRs that could be re-focused.
A New Way to Organize SDR Teams
As an outsourced SDR agency, we are 100% convinced that there is a role for internal SDRs. If you can successfully build an internal team, you should do it. The problem is that most organizations can’t build a successful team. When working with this client, we identified two key areas of focus for their two internal SDRs. The first was inbound leads and MQL (Marketing Qualified Lead) follow-up. The second was their existing clients that had upsell potential. When hiring SDRs, companies usually focus the SDRs on new logos. You can make a lot more money by focusing these resources on acquiring existing customers. Also, utilizing the leads that marketing generates but that are not yet ready to meet with the sales team.
With two resources dedicated to their account, we are averaging 24 meetings per month.
Our cost to do this is $12,000/month. We are able to do this thanks to better campaign design, our own contact database, and SDRs who are very good at making calls. Since launching, they have added an additional resource as well. We’re able to set the exact same number of meetings for $12,000 that they were spending $70,000 a month on. Their internal team is also doing much better. They’ve 10X the sales pipeline focusing on internal upsells and MQLs they did trying to find new logos.
In summary, the effectiveness of an SDR team hinges on their adaptability to changing sales landscapes, their ability to engage through diverse channels beyond phone and LinkedIn, and the strategic insights of their managers. A successful SDR strategy involves not just chasing new leads but also capitalizing on upselling and MQLs. However, when internal resources fall short, especially in specialized areas like cold calling and email marketing, external expertise becomes invaluable.
Here at OutboundView, we specialize in this realm, offering outsourced appointment setting and lead generation tailored for companies targeting HR sectors. Our proficiency in devising successful outbound strategies and enhancing SDR performance has been proven across over 100 companies. So if your team struggles to meet benchmarks, or seeks to amplify its sales outreach, OutboundView is equipped to guide and elevate your efforts — ensuring a more robust and effective sales pipeline.