If you are a B2B company and do not have a sales development team yet, consider setting one up. Sales development brings in a lot of efficiency into your overall sales process. Just like you need front end engineers, back end engineers, UX designers on the engineering side, you will need sales development, sales operations, and account executives on the sales side. The need to separate sales functions becomes very important as you scale up, as it is unfair to expect account executives to take on all sales tasks and do them efficiently.
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What does a Sales Development Team do?
For those of you who are not familiar with what the sales development team does, this is the team that generates opportunities for the sales team to close. They create opportunities through prospecting – often emailing, cold calling or social selling to generate interest in potential buyers. They are often the first person in the company that potential buyers would get in touch with after they have been put through the marketing campaigns.
So how do you go about setting up the sales development team? When and where do you start? Here’s an interesting article from Hubspot that tells you when you know you are ready to build the sales development team.
When do you hire your first SDR?
Even before you hire your first SDR resource, you’ll need to hire sales executives to close opportunities that sales development teams generate. When you think that your product is ready for the market, go hire your first sales executive.
For this, you can use various websites and job platforms, or post a job listing for the position of Sales Executive on platforms like LinkedIn, Upwork, Lensa, etc. Make a brief job post mentioning the responsibilities, day-to-day work and other important job details (you can refer to this job posting on Lensa for reference).
Once you hire the first two or three account executives, you’ll realize they need more meetings and that the time is right to get your first sales development hire. Account executives while great at closing may not be good at prospecting, and when you ask them to do both the focus gets diluted.
The decision on whom to hire as your first sales development rep will be as important as the one you made while getting your first account executive on board. The first SDR will not only help create opportunities for the sales folks but also act as a torch bearer for the other SDRs. You’ll be relying on him/ her to figure out what’s working, measure efficiency of different campaigns, document best practices, hire and train future hires.
Ideally, you want someone who has sold B2B products in early-stage companies since you’ll need him to come in and get a few closures straight away. Here are 10 skills to look for in an SDR. Moreover, he will be the torchbearer for the sales resources to come. You will need someone who can help you figure out what your price point should be, how your time to market looks like, and set up a scalable, repeatable process for the other resources to follow.
Describing A “Good” Sales Development Rep
When you are looking for your first SDR try finding someone who is very good at listening, asking the right questions, and capable of converting a ‘No’ to a ‘Yes’. Most SDRs will face rejection from prospects when they start reaching out. The good ones don’t give up. They know where to place their bets and have their own ways of prodding the prospect by asking intelligent questions.
Also, they are good at using multiple channels to get a response from the prospect. They are always on top of their reach outs, know how to time them perfectly, and maintain a log of opens and clicks along with the day/ time the event took place. One of the best ways is to role-play during the interview and put them in tough situations. Gauge their thought process and see how they navigate out of them.
Once you hire the first SDR, you’ll need to give him the ammunition to reach out and generate those meetings. He may need access to a tool to help him keep track of his campaigns and another that gives him recommendations on whom to reach out to. The best way to make the SDR effective quickly is by setting up target-based incentives and providing all the ammunition he needs to achieve those targets. Obsess over your targets. Make sure you are incentivizing the SDR enough in order to meet those targets and invest in the tools he needs.
Setting Targets For New Sales Development Reps
A good approach to determine the target for your SDR is by aligning SDR target to your sales target. For instance, if you need to close a million dollars a year per sales rep, and the close rate is at 20%, you’ll need to generate five million dollars’ worth of opportunities per sales rep. If you plan to have a ratio of 1 SDR to 2 account executives, then you need to generate 10 million dollars of opportunities per SDR. You can calculate how many opportunities he would need to generate based on your price point. Check if this is feasible with one SDR – if not, you need to work on improving your sales closure rate or have a different ratio of SDR / sales rep. If the numbers do line up you are on the right track. Then devise incentives in a manner that the SDR is driven to hit that number. Do everything to make him successful.
Training, Motivation and Strategy
Once you have a working SDR model, figure out what campaign strategy is working best and double down on it. If your SDR is great with cold calling and generates a lot of opportunities by picking up the phone, hire more SDRs with great communication and listening skills. If your SDR is killing it with great email campaigns, find folks who are good with email templates and subject lines. Folks who are persuasive and can convert a ‘No’ to a ‘Yes’ over email.
Once you get the right hires on board, you’ll realize that training them well is as important if not more. Having a proper training plan in place when the SDRs join can accelerate their ramp-up period. Plan in advance on what you need to do from your side to make this happen.
Also, figure out how you can keep them motivated while on the job. Their work can get monotonous and it is important there is enough incentive for them (monetary and otherwise) to achieve their targets. There needs to be a clear career path on what they would be doing in a few quarters after meeting their target. Also, think of how you can impart learning and make their journey much more meaningful – what L&D programs can you administer that will help them excel in their role. Also, don’t forget to celebrate small achievements and call their names out when they perform better than expected. Take them out for a small celebration when the team hits its goal.
If you hire the right SDR resources, train and incentivize them well, RoI from sales development can be significant. Sales development resources provide the machinery for the sales team to go and do their magic.
We have seen in many companies that the sales team is often given the responsibility of prospecting and closing. This could be a good approach when you hire the first couple of account executives, but as you scale, you need to separate the two functions to achieve optimum results.
Relying on an account executive for everything sales is akin to relying on a full stack developer for all your development. It feels great to have one resource do everything until you break the functions down and realize the sum of the parts is greater than the whole.