This post is the third in a series of about Sales Development Reps (SDRs).
- Blog 1: Sales Development Rep Call Success
- Blog 2: Sales Development Rep Technology
- Blog 3: Sales Development Staffing, Organisation and Goal Setting
This blog is the last in a series and will cover the following the following topics
- Compensation and Goal Setting
Getting the right person in a role is key. With recruitment fees and ramp-up times increasing as businesses become more complex, this is more critical than ever.
Some traits to look for include:
- Intelligence – Yes, this is a junior role and not very sexy, but your buyers are savvy and will be able to sniff out a call script instantly. You want someone who is clever and can think on their toes.
- Coachability – This role is highly process driven and the ability to receive feedback and act on it is key. One trick to testing this in an interview is ask someone to pitch something, it could be anything. Ask them to come up with a 1-2min pitch. Afterwards, ask them to rate the pitch and provide suggestions for how they could improve next time. If someone gives themselves a 9 or 10 they are not probably going to be highly coachable.
- Eager and enthusiastic – This is probably the best indicator that someone will succeed in this role. You want someone with an endless supply of positive energy. If you are on the fence about two candidates, go for the one that annoys you a bit they are so chatty – they will often be the more tenacious of the two. Also ask for example of when they went over and beyond. You don’t want a minimum effort person here.
- A team player – Someone who wants to see their work ‘go the distance’ instead of just throwing it over the fence. Someone that works to understand what sales reps want and how to fine tune their work to support that. Ask for examples of supporting others here.
- Hungry to learn – Someone who takes pride in their craft. Ask them what blogs they read. Ask them what software they’ve tested. Ask them how they are working to improve themselves. Ask them how good they are at stalking people on social media. Millennials love this kind of thing and will be a great asset to get in touch with your key contacts.
- Ambitious – A fantastic SDR should be moving onto a new position in 6-12mo, they should have that drive. And that’s fantastic news because this is an excellent position to source candidates for more advanced roles in your organisation. My advice would be to STEER CLEAR of the ‘career’ SDRs. With few exceptions this is not going to yield an exceptional candidate. That being said, many people will take a more junior SDR role to get their foot in the door of a new organisation, especially if you have some really great new technology. They know this is the way to get in so be conscious of that as well.
When interviewing an SDR candidate I recommend the following:
- Phone interview(s). This is super convenient for you and your interviewing team, but an absolute must to determine the phone presence of this individual which can often be very different than in person.
- Involving others. Not only should this person have a few interviews (sounds obvious, but you would be shocked how many companies hire someone based on meeting one person) but from a varied group. I highly recommend this person meeting with sales operations and one of the sales reps he/she will be supporting. Sales ops will be able to instantly pick out those ‘know it alls’ who won’t conform to process, and process is such a critical part of this role. I can often tell within a couple min if someone will be able to be successful in a sales role. Sales reps can really suss out if this is someone who will be a team player and work to get them the right qualified leads. Do they listen? To what the company needs? To prospects? Another suggestion might be an inside sales or sales manager. This is the next career step. Is this the kind of person they could see on their team in 1-2 years? As this person will be working closely with marketing, what does the regional marketing manager think. Always seek diverse opinions.
Another interviewing tip – I read recently that Sergey Brin often knows within five minutes if he will hire someone. However, then he’s still stuck in the rest of the interview so he always asks ‘tell me something I don’t know’. This way every interview he’s receiving some insight, if not producing a job offer.
The standard ratio is supporting 3-5 sales reps per SDR. This should also, of course, be tweaked depending on reasonable volume this group will be handling.
InsideSales.com has one of the best pieces I’ve seen which discusses pros and cons of sitting with sales or marketing. At its heart the piece says ‘There is no one-size-fits-all model for building a high-velocity business development team. You must take into account all the variables at play in your organisation.’ Data from The Bridge Group shows that 73% of business development reps report up to the VP of sales. The Insidesales.com whitepaper should help ask the right questions to figure out where in your organisation makes the most sense.
No matter where this person ‘officially’ sits I recommend the following:
- Weekly meeting with SDR manager, IS or sales manager, marketing, sales operations
- This will eliminate any managerial or organisational conflicts and fill any gaps
- This allows everyone to get on the same page to discuss recent and upcoming activity
- A career mentor
- Someone in the sales or marketing org – could be someone who came from an SDR position and moved on, could be a more senior SDR – someone that is not a line manager to support this person
Compensation and Goal Setting
The Bridge Group’s last study around SDRs and they found the following (for US markets):
- Average Ramp Time for an SDR: 3.3 months
- Average SDR Tenure: 1.4 years
- Average Base Salary: $46K
- Average Total Compensation: $72K
These numbers can be lower or higher based on location or target market. For example, in Silicon Valley, SDRs with significant experience calling enterprise accounts and decision makers can make over $100K in annual target compensation. Another factor is inbound versus outbound. If 100% of the leads are inbound, then the SDRs will typically make less.
It is most ordinary to see of a split of 50/50 or 60/40 between base and incentive. How this incentive is designed is a topic of much debate so I’ve tried to outline some thoughts.
According to Bridge Group Inc’s research, 53% of organisations use closed won/revenue to compensate their SDRs. However, because this depends on the efficiency and skills of the sales team, it can be unfair. Some people think SDRs should only be compensation on qualified leads. I’d suggest a mix of both is a good idea. The revenue piece keeps the team thinking about quality and also about the team as a whole and the qualified lead metric is individually accountable. Ideally this incentive compensation is based on a monthly goal, with any performance accelerators based on a monthly target. The following is a sample of average metrics to give you a ballpark idea but really these metrics need to be customised for your organisation.
- Average Daily Calls for SDRs: 46
- SDR Monthly Quota: (Opps): 13
- SDR Monthly Quota: (Appointments): 21
Lars Nilsson recommends a 1% bonus on closed-won deals that are generated from qualified leads passed by an SDR. This is one possibility which then becomes directly accountable. Another way to do this is to align all of your SDRs as a team to the bookings targets. Either way, the idea is to incent your SDR team to pass high quality, qualified leads.
If you are thinking about starting an SDR function or would like some help in defining or refining processes, please contact Marissa at Sales Ops Help. I’d love to work together with you.