A top priority for almost every tech company is growth, and for many, it’s finding ways to grow faster than their current rate. So it’s natural that a key question business leaders face is how to best organize the sales team for success?
Unfortunately, there’s no exact blueprint for a sales team as every company has their own unique variables, strengths, and weaknesses. However, many leaders, especially in software and technology, are rethinking the effectiveness of the traditional sales team in which a group of ‘generalist sales reps’ are expected to single-handedly do it all, from finding new leads, to being the first point of contact with online leads, to qualifying and leading the sales process through presentation and closing, and often managing the prospect and customer relationship.
This article is intended to give an overview of three distinct specialized sales roles to better maximize the market opportunity from the three primary lead generation sources; inbound, referrals (customers, alliances, personal network), and outbound. We also provide a simplistic example of how a sales team could be organized by role specialization.
Sales Representative
For the purposes of this article we’ve used the term sales rep, however this role has a number of other names such as sales agent, sales executive, account executive, account manager, and many more. Whatever the title used these are the quota carrying sales professionals, the closers, who are expected to meet or exceed revenue targets, know the products or services value propositions, the features and functions, the competitive advantages and disadvantages, consistently follow up to move prospects through the funnel, conduct professional demos, nurture the relationship, overcome objections throughout the process, provide proposals and agreements, transition or liaise with customer service and accounting as the onboarding process begins, and sometimes, depending on the size of company, be the account and relationship manager throughout the customer lifecycle. Given their quota expectations and the nature of the role it's pretty standard for them to focus most of their time on their best SQL’s (the A&B leads). Follow up of brand new leads, of MQLs, and doing cold outbound lead gen activities is not at the top of their agenda, and, often, is ad hoc.
Sales Development Rep (SDR)
SDRs are almost strictly inbound lead based with their primary role being to set qualified appointments (SQAs) or demos for sales. A good motto for an SDR is ‘no lead left behind’. Incentive compensation is primarily based on appointment achievement (sometimes it includes a small secondary component based on closed sales). SDR’s should be lightning fast to respond to every inbound lead, be a super helpful information resource, qualify the lead to an MQL or SQL via a sequence of predefined follow-up steps, and set appointments for sales. The SDR should also be accomplished at rejuvenating aged leads (leads in the CRM database that have expressed interest in the past but, for whatever reasons, were not A or B type leads). Side note: Aged leads are often overlooked but can be a goldmine of new business if engaged professionally and consistently.
In our prior SaaS venture there was a growing trend by our clients, and across that industry, toward the use of SDRs (the SDR role in that sector was typically referred to as an online sales councillor or OSC). In all the internal data analytics we compiled and in every survey conducted, the conversion rates to appointment and closed sales were higher for those customers that utilized the SDR role as a key position on the sales team. Results were not just a little better -- they were often dramatically better!
Business Development Rep (BDR)
BDRs find new business via outbound activities (e.g. cold email, cold call, social selling, networking) in order to find qualified SQLs and set appointments for sales. Like the SDR role, BDR incentive compensation should be based on SQAs (typically on a smaller number of appointments due to the degree of difficulty in generating). This difficult role often means BDRs are compensated more than SDRs, due to the nature of the work and the skills required. This is not to imply converting inbound leads is easy, but they at least come to the funnel via some means of their own actions. Many leaders, mistakenly, think that cold outreach is pretty basic and is just a matter of picking up the phone and doing it. Not so -- not at all!
There are a good number of moving parts in the BDR process, but for the purpose of this post three are highlighted:
Research – Whether a BDR is attempting to expand business within an existing market or target new markets, effective research is a key step that involves utilizing the right tools and, whenever possible, working from an ideal customer profile and example personas. Effective research, including the use of modern tools, is instrumental in finding good potential target companies and their decision makers and influencers.
Outreach – There is an art, science, and skill, plus a confidence and personality needed to create, initiate, and execute a sequence of calls and emails that has the sole objective of making contact and piquing enough interest to book a second call or demo with a decision maker. It’s not easy to be put off and told no more often than not.
Converting Opportunities – The purpose of a BDRs call is twofold, to determine whether the company is a prospect worth an SQA and then to convert the call to an actual appointment. These calls typically take anywhere from 5-10 minutes. Converting the cold outreach really marks the difference between this sales role compared to the others – a BDR must be able to build rapport quickly and without a content funnel. It’s a skill that takes time to master and not everyone is cut out for this. Side note: The BDR role provides a natural internal training ground for future promotion to a quota carrying sales executive.
Let's look at a hypothetical organization example
Current sales team scenario:
A software company is currently organized with five generalist ‘flying solo’ sales representatives.
Performance wise, they have two top producers, one performing at close to 100% of quota, and two underachieving reps.
Optimized sales team scenario:
One of the underachieving reps has a skill set and personality that’s more suitable to a SDR role and could be reassigned to handle all inbound leads with speed, consistency, and professionalism. This will result in a better experience for new leads and more SQL appointments set up for sales, and hence, more demos and more sales.
The other underachiever, despite good efforts by sales management, is not a good fit and should be terminated. This provides an opportunity to recruit and train a BDR to focus on outbound lead generation. This outbound acitivity will result in more leads and more SQL appointments for sales, and hence, more demos and more sales.
The three current producing sales representatives may initially resist being assigned a higher quota to replace the quota previously allocated to other roles. But, from our experience, sales executives that get more SQLs, have more time to focus on what they do well, and see the opportunity to make more money quickly get past the resistance to change.
There are many benefits to this sales team structure:
No inbound leads left behind results in more SQLs and the businesses (or consumers) interested in your products have a better buying experience.
Outbound sales activities become a habitual consistent program, are more professional, and result in more SQLs.
Current sales representatives can focus on selling value and competitive advantage, build deeper relationships, and maximize revenue per new customer.
Sales personnel of all roles are better suited to their skillsets (versus square pegs in round holes).
The company achieves better results without incurring incremental sales compensation costs.
I hope these tips help you in your pursuit of sales excellence. Feel free to reach out and connect with me on LinkedIn or contact me directly at 604.999.0724 / mike@performaxgroup.com