Sales development is one of the most important processes an organization can build to deliver a seamless, efficient revenue machine. Sales development is a phone-based team that identifies, connects with, and qualifies leads. When a lead is qualified, they then pass the qualified lead to a sales person who takes over for the rest of the sales process.
Put simply, SDRs (Sales Development Reps) pass the baton between marketing and sales.
Connecting with prospects requires time and resources
To understand how much effort it takes to reach a prospect by phone, look at these numbers provided by the demand generation firm Vorsight:
Dials-to-connects – It takes 12.73 dials to get a connect when calling a list of prospects with direct phone numbers and 18.83 when calling switchboard numbers.
Dials to Conversation – 22.5 dials to meaningful conversation is the industry average, but if you’re calling highly solicited divisions, such as IT or marketing, or very senior executives the number is closer to 30 dials to 1 conversation.
Conversation to Appointment – 3 meaningful conversations are required to get 1 appointment.
To sum it up: it can take 60-90 dials to get an appointment with a prospect which is not an efficient use of a quota-carrying sales person’s time.
Converting a lead to an opportunity requires its own playbook and subsequent training and coaching
Sales development is fundamentally different than the rest of the sales cycle. The science of connecting with someone is hard enough, but when you connect, you have a few seconds to generate interest and a couple minutes to handle objections and close for a meeting. Effective sales development requires full-time management, specific training, and constant coaching.
Sales Development means a higher lead to opportunity conversion
Converting a lead takes time and effort. The best revenue machines have a sales development group to reach leads, overcome objections, make sure they are a fit, and get them connected to sales teams. From 2005-2011, the principals of TOPO founded and operated a company called Tippit. At Tippit we would use a variety of digital marketing tactics to generate leads for hundreds of clients. When we looked across all our clients, the organizations with sales development teams converted leads to opportunities at an exponentially higher rate than those that did not. For example, we had two technology clients who sold competitive solutions to the same type of buyer. The company with an optimized sales development converted these leads at 40%. The other organization passed leads directly to quota-carrying sales reps and converted leads at less than 5%.
Sales and marketing alignment
The biggest grievance from marketing is the fact that sales doesn’t follow up on their leads. Meanwhile the single biggest complaint from sales is that marketing leads are terrible.
Sales development teams help bridge the gap between sales and marketing. When managed correctly, sales development solves lead follow-up issues. As for the issue of marketing’s leads “sucking”, this problem often happens when unqualified leads are sent directly to quota-carrying sales reps.
The truth is that the vast majority of leads do “suck”. A very good conversion rate is 30% from lead-to-opportunity which means that 70% of the leads contacted won’t turn into anything. Quota-carrying sales reps don’t have the time to expend the effort needed to reach these leads only to find that 70% will turn into nothing. Sales development solves this problem by sending sales only qualified leads ready to talk.
Increased productivity and efficiency from quota-carrying sales reps = more revenue $$$
Sales reps are expensive resources that you pay to close business – you have to free up their time to focus on the effort needed to achieve their goals. A great quota-carrying sales person is spending the majority of their day working the rest of the sales cycle: pitching, proposing, negotiating, trying to get buyers back on the phone, meeting with internal stakeholders, etc… We increase the odds of closing more business by allowing sales to begin their sales process with qualified leads who are ready to speak to sales.
The Marketo Definitive Guide to Leads Qualification and Sales Development provides compelling data highlighting the benefits of sales development to sales reps including a:
5% increase in selling time that can yield a 20% increase in revenue;
1% increase in pipeline value that can yield a 25% increase in revenue; and
15% decrease in sales cycle length that can yield a 30% increase in revenue.
Sales development metrics
There are two categories of metrics you should track when running an SDR team: operational and strategic. While every organization will have their own set of metrics, here are some ideas:
Operational metrics – Operational metrics provide the data to manager and optimize the day-to-day tactics of your SDR. The first set of recommended metrics should follow the steps of your lead follow-up process. With this data, you can optimize individual SDRs and your overall follow-up process. For example, you can divide calls/connects to determine the conversion rate:
Other operational conversion rates to track include:
Email open rates and response rates
Voicemail response rates
Lead source effectiveness to determine which lead sources are working or not
Qualified leads/sales accepted leads (If this conversion rate lags, you likely have an issue that you will need to address)
Strategic metrics should be designed to help you understand the effectiveness of the overall SDR organization. Examples include:
Total pipeline sourced by SDRs
Percentage of pipeline sourced by SDR
Closed business from QLs
Number of QLs passed per month
Sales development technology
One of the common characteristics of successful sales development teams is their use of technology and automation to be more effective. According to the Sales 2.0 conference, there have been over 2000 sales automation applications introduced to the market since 2006. In other words, there are a lot of options. In this post, we are focused on the critical applications needed to run your sales development team.
CRM – With how much information and data there is to manage, every sales development team needs to have 100% adoption of the CRM application. The list of potential applications is too large to name in this post.
Sales intelligence and data – You want to provide your SDRs with applications that allow them to access information about leads while they are calling and qualifying them. All of the applications listed below provide data such as contact names and contact information. Some applications to consider include:
A note about LinkedIn: Linkedin is one of the most used sales intelligence applications. Many sales people use LinkedIn to find leads, but the aforementioned sources can deliver leads into your CRM system automatically, which LinkedIn does not do. That being said, every SDR should have LinkedIn open on one of their screens.
Inbound SDR Comp Plan
Infighting Between Sales & Marketing
CRM data is valuable when used to qualify leads for the sales department and to show which marketing campaigns lead to closed sales. But these insights can be missed if sales and marketing don’t work together. Before you do anything else, get both departments in a room to map out common goals, and to discuss how to use the data.