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The Effectiveness of the SDR Activity Model

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The success of any demand management function can be directly traced backed to the effectiveness of the SDR activity model, assumptions, conversion estimates and the process used to set priorities.  Take the time to build or rethink the resources, processes and systems that are used to follow-up on leads which are typically generated by marketing programs (one of the largest budget items for B2B companies).

SDR Call Model Assumptions for SDRs, BDRs & ISRs

Call model assumptions for Sales Development Reps, Business Development Reps and Inside Sales Reps may appear to be very simple and straight-forward. However, small errors will have tremendous impacts when aggregated over a quarter or a year. Specifically, these assumptions are:

  • Hours in the day
  • Days in the month
  • Months in the year
  • Hours in a month
  • Number of dials in an hour

Hours in a Day

Hours in a day is relatively straight-forward variable. Some organizations believe work hours equate to eight in a day while others set this number at nine or ten per day. On the other extreme, there are organizations that reduce the eight-hour day to a lower number—sometimes seven — as this allows for lunch and breaks. The key takeaway here is to use a number that makes sense and then consistently apply it in the daily, monthly, quarterly and yearly calculations.

Days in a Month

The number of days in the month is a bit trickier than hours in a day since the number of days in a calendar month varies because of national holidays. Some organizations calculate the actual number of business days per month while others assume 20 business days per month for modeling purposes.

Number of Dials per Hour

The number of dials per hour is one of the assumptions that can make or break a Sales Development Organization or Inside Sales function. One key assumption that must be made is the amount of time an SDR (target earnings of ~$70K) will be on the phone. This metric is a function of the:

  • Cleanliness of the database
  • Quality of the phone numbers in the database (800# versus direct)
  • Ability to reach someone
  • Ability to hold a conversation
  • Ability to discover, qualify and or sell

A good rule of thumb is that SDRs calling lower level people (to confirm the right person in the right organization) should be able to make 50 calls per hour. In contrast, Inside Sales Reps responsible for selling over the phone (target earnings of ~$90K with a $900K quota) should be able to make 35 calls per hour.

Note auto dialers and calling services that provide live connections can change the mechanics (and cost) considerably. However, these resources need to be closely managed as both of these options can be detrimental if not administered properly.

Conversion Estimates

Conversion estimates are essential for efficiently and effectively managing the SDR and ISR functions. Every organization tends to have their own terminology and number of stages or steps in the demand management process – which is fine. However, there must be a metric and corresponding report (or dashboard) that measures each step in the demand management process. This is so that deviations can be tracked to specific stages, processes and people for remedy.

For example, an organization may choose to have the following categories/steps/phases in the demand management process:

  • Response – an action taken by a prospect (i.e. filled out a form, provided a business card, dialed the 800#, etc.)
  • Marketing Qualified Lead – a response that meets a subset of criteria extracted from the qualification matrix. Usually the marketing automation or sales automation system can process the responses against the qualification criteria).
  • Sales Received Lead – the marketing qualified leads the SDR receives from marketing. Due to filter errors, incomplete data, inaccurate data and other factors, SDRs may not receive all of the MQLs that marketing believes were generated. The SDR needs to review the information on the Sales Received Lead (SRL) to ensure that the system did not make an error. The review also checks that the SRL represents a company and contact that should be targeted and that the threshold criteria are met.
  • Connects – this refers to an SDR making a follow-up call and actually getting the SRL on the other end of the phone. The number of attempts to reach a person on the phone varies by title. For B2B companies, the average number of phone call attempts to reach a person is:
    • An Image Decpicting SDR-Average-Number-of-Attempts-to-Connect7 attempts to reach a manager or below
    • 15 attempts to reach a director
    • 20 attempts to reach a VP
    • 25+ attempts to reach a C-level executive
    • The biggest factors impacting the ability to reach a person include the quality of the phone number (direct dial work or cell), plus the day the week and time of day the call is made.
  • Meetings – this is where the SDR sets up a meeting for a Sales Rep to perform discovery, present or demo. The SDR will push to gain responses to questions in the qualification matrix. The SDR will then typically perform additional research to understand the profiles of the various players to be on the call or in the meeting. If the meeting gets postponed, delayed, etc. and nothing happens for 30 days, the SRL gets demoted back to MQL stage for additional nurturing.
  • Qualified Sales Opportunities – this stage confirms that a direct sales rep has spoken with the prospect, that the company and the contact fit the target account profile and that the business problem is a match with the value proposition.

A Day in the Life of an SDR

Too often, B2B organizations stick the SDRs in a room with a bank of phones and instruct them to dial until the day is over. In general, to have a successful SDR function requires a great deal of structure, process, systems and the ability to accept a lot of rejection. Those that believe the job is simply “dialing for dollars” will have subpar results, a great deal of churn and incur unnecessary expenses.

Specifically, the SDR is the interface to the sales rep (the person they hand the meeting off to). But at the same time, to be effective, the SDR must be part of the marketing campaign planning and execution process. And, there’s a good deal of research and planning required for an SDR to be effective. Specifically, it’s beneficial for the sales and marketing teams to list the core demand management activities and estimate the number of hours, the percent of the day and the actual quantity to be delivered. This way, intelligent choices can be made about ranking and prioritizing the activities for the SDR.

SDR Activities Categorization

  • Cold Calls – calls to the database of suspects that have not responded to the company.
  • Warm Calls – calls SDRs make to those who have responded to the company through a marketing campaign, the website, a phone call or physical event.
  • An Image Depicting The-Effectiveness-of-the-SDR-Activity-ModelInternal Meetings and Emails– as employees, SDRs should be required to attend internal meetings, trainings and communicate with other employees. The time for these tasks must be accounted for in their call model.
  • Administrative tasks — this refers to updating new and existing records in the sales automation system based on daily activities.
  • Supporting the Sales Rep – this activity is often overlooked and sometimes it can be very time consuming. Some sales reps use the SDR to perform most of their administrative tasks, fine, but it needs to be a conscious decision as it eats in calling hours.
  • Account & Contact Research – this is required before each and every call if an SDR is focused on engaging in a meaningful and relevant conversation with the sales received lead. SDRs can use LinkedIn, Twitter along with other social platforms and private or public databases to gain insights about the persona and or the company that is being called. While this can be time consuming, it can also be effective so this research time also needs to be factored into the SDR calling model.
  • Account and Contact Development – this refers to an SDR finding new companies and contacts to call because they fit the target account profile and are assumed to have a high propensity to purchase. Each day an SDR makes calls, thereby reducing the database of companies and contacts that they have to call. Therefore, time has to be spent building a good database of suspects—buying poor quality lists is expensive, demoralizing and ineffective.

SDR Activity Model

The reality is that an eight-hour day normally does not provide for eight hours of SDR calling. Granted, things change — fire drills sometimes occur and that is to be expected. However, when one models out a month, quarter or year, the exceptions really do fall in line with the call model assumptions—if they were set intelligently. It’s important to resist the temptation to not include an activity when it’s known that the activity is real. Doing so will be a benefit in the end by not becoming a fire drill.

In the final analysis, the focus is on revenue. However, we need to reverse engineer revenue back to the point that includes the items an SDR has direct control over. At the highest level, the primary goal for an SDR is for the sales rep to accept the opportunity passed to them and for that opportunity to be included in the sales forecast with some weight—usually a qualified sales opportunity. The step before that would be the meeting that is set by the SDR for the sales rep, preceded by a connect, a dial and a sales received lead. The other productivity metrics usually indicative of future business are the number of emails sent and the number of accounts and contacts added to the database.

The net is: build an SDR activity model, use industry standard assumptions or historical data, update that data with actuals and make adjustments along the journey.

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