The Missing Link to More Revenue: Standing up an SDR Department - Part 3

Never miss a post

Subscribe below to receive Ignite blog updates.

When supplied with the proper vision, leadership, and coaching, SDR teams dramatically improve your company’s bottom line. And in our relentless pursuit of aligning sales and marketing departments to work together (rather than in their own silos), SDRs perform the critical tasks that nurture and develop relationships with potential buyers. Having a dedicated team who builds relationships and helps guide buyers through the sales funnel makes for a more efficient and effective close, and it allows late-stage selling teams to focus on what they do best - close more deals.

Building an effective SDR team can (and most likely will) be an ample time and financial investment for your company, and this is for a few reasons. First and most notably, this is because of the inherent inexperience of the team itself. SDR teams are composed of early-career sellers, often fresh out of college. This lack of experience means that the leadership guiding an SDR team must be willing and able to set aside time to coach each member, refining the skills that will allow the seller to thrive in the position and grow into an experienced team member. Furthermore, the team's inexperience could result in a more extended ramp-up period for the team to start driving sales, meaning your company should expect to finance the team’s training and functions without any direct increase in revenue for at least two months. Of course, talent inexperience isn’t the only reason for a startup cost - there are the natural costs like equipment and training. However, the opportunity cost of senior leadership training these candidates is also a significant contribution that might come into play. The time availability and price of training might be far greater than you might initially expect.

With that in mind, why bother allocating resources for developing an SDR team? While it might boast initially high startup costs, the return on investment is unmistakable. Once operating at total capacity, SDR teams are often responsible for generating 30-45% of new business revenue for an organization. The efforts an SDR team would make often fall by the wayside of sales teams for no reason other than a lack of time - cold calling, prospecting, and communicating with inbound leads. While these tasks naturally segment into inbound and outbound efforts, these efforts process leads and determine if they qualify for the next stage in the selling process. This qualification can be whatever standards leadership sets for the SDR team, and it should be a myriad of elements that increase the likelihood of the prospect continuing through the sales cycle.

Creating both inbound and outbound SDR teams naturally requires specific KPIs to chart and determine success over time. Key performance indicators for each team might include a set number of lead qualifications to move further through the sales funnel, depending on the ratio of high to low intent prospects, or a certain number of new outbound leads determined who fit a targeted sales persona. However, this can vary depending on the needs and standards upper leadership sets. Especially when differentiating the metrics to drive inbound versus outbound teams, inbound SDR teams should have a significantly higher yield of quality conversions into later stages of the sales cycle, because inbound leads have demonstrated knowledge and understanding of your organization.

Creating SDR teams, or even just one team might be an undertaking your company is not ready to undertake. Outsourcing part of (or all of) an SDR team is an excellent way to gain the value of an SDR team without incurring the accompanying startup prices. While this is an effective tactic to secure an SDR team efficiently, there are drawbacks to consider beforehand. You are not able to oversee a third-party SDR team to ensure their prospects meet the designated persona. Many third-party teams require additional support and direction to be effective, and this direction often leads to supplementing outbound engagements rather than handling inbound leads. Again, while this can vary depending on the needs and support your company offers, it goes without saying that creating an internal SDR team to handle early-stage lead development is a long-term play that sees greater potential than a third-party team is likely able to accomplish.

SDR teams are far and away from the best solution for sales leaders looking to expand their roles and team. Establishing a position dedicated to bridging the gap between initial marketing and late-stage sales is a handoff that will pay dividends in several areas, from limiting the loss of conversions to effectively sourcing new outbound leads for late-stage sellers to close. While the startup of an internal SDR team might seem like a large fiscal and time investment, it can be a powerful generator of sales that ultimately make it a price worth paying.

Leave a Comment