11 Sales Development Strategies for High Growth Companies
Sales Development has evolved from a secret sauce of high growth companies to “table stakes” for B2B sales organizations. 15 years ago, I remember having to make impassioned pleas for executive teams to invest in sales development. Back then, there was only a 50% chance they would make that investment. Times have changed. Now, you would be hard pressed to find a successful, high growth technology company that doesn’t have a sales development team.
In 2014, TOPO benchmarked the sales development function at high growth companies to understand the processes, people, technologies, metrics, and plays they employ to drive revenue growth. The benchmark data reveals a handful of patterns shared by high-growth companies that are extraordinarily valuable for other companies to understand. In this post, we’ll focus on 11 key strategies identified in the data. There are many more in the actual report.
When you sign up for the on-demand version of our webinar “11 High Growth Sales Development Strategies”, you can watch a presentation on these 11 strategies and you will also receive a copy of the 2014 TOPO Sales Development Benchmark Report.
1. Only 27% of sales development teams use BANT as their SQL definition
For years, BANT (Budget, Authority, Need, and Timeframe) has been the de-facto SQL definition. There has been a recent, yet significant change in thinking about what constitutes a sales qualified lead. 73% of companies now use looser SQL definitions such as ANUM (Authority, Need, Urgency, Money) or AN (Authority, Need) instead of BANT. If you are not using BANT or moving from BANT, I suggest reading our recent post on best practices for converting non-BANT SQLs.
- The SQL definition is absolutely critical to the success of every sales development program. Make sure you choose the definition that is right for your business and target market.
- Most outbound sales development organizations in the report used AN or ANUM for their SQL definitions. Trying to apply BANT to outbound is truly like trying to find a “needle in a haystack”.
2. 60% of sales development teams specialize their SDRs to focus on inbound or outbound
The inbound marketing and demand generation movement of the last 5 years has created a high volume of leads that require follow up. Inbound lead conversion has very specific requirements that can only be executed effectively with a specialized inbound team. For example, inbound leads should be followed up within 5-30 minutes of receipt which is a requirement that requires full time headcount to achieve (see point number #3 below).
- Organizations with specialized roles typically are delivering 200+ leads per SDR per month.
- Many of the hybrid teams are primarily enterprise focused and typically provided less than 200 leads per month. With these teams, lead volume is inconsistent on a month-to-month basis.
- The data also shows sales development teams specializing by company size, vertical industry, and product.
3. 31.5% of sales development organizations respond to leads within 5 minutes
Data from Velocify presented previously on the TOPO blog shows that the highest inbound lead conversion rates happen within minutes of download. A prospect who has just completed a registration form is thinking about your offer and is more likely to respond. As time elapses, prospects turn their attention elsewhere and when approached often reply with the dreaded: “I don’t remember downloading the whitepaper”.
- Of the organizations that respond under 5 minutes, the vast majority have specialized inbound SDRs.
- Many of these teams use technology such as intelligent lead routing and “zero minute” emails.
- Not surprisingly, hybrid teams struggle to achieve best in class response rates of under 5 minutes.
4. The average number of touches per lead is 8-12 times
Many people ask “how long should I keep touching the prospect before giving up?” The answer is 8-12 touches, but the key to success is to think of outreach as a campaign with a set number of touches over a set period of time. Most importantly, this campaign should be optimized over time.
- The best practice is to touch a prospect 8-12 times over a short period of time such as 2-4 weeks. You should make 8-12 touches per lead or person, not account. In many accounts, there are multiple people to sell to and each one should get their own touch campaign.
- These touches should be spread across a mix of channels such voice, email, and social.
- Once the 2-4 week campaign is over, SDRs should re-visit the lead at a later date.
The average number of times an SDR touches an individual lead
Meaningful touches are defined as touches that deliver a message to a buyer such as an email. An example of a touch that is not meaningful is a dial where an SDR calls a prospect and hangs up without leaving a message.
5. 50% of sales development teams include a LinkedIn touch in their touch patterns
For most sales development organizations, LinkedIn is the predominant source of sales intelligence. It’s also quickly emerging as a key channel for touching hard-to-reach prospects.
- Most organizations include a LinkedIn touch as part of their first set of touches. This is known as the “triple touch” – call, email, LinkedIn.
- We do not recommended inviting cold prospects to connect on LinkedIn until you have had a conversation with them. The best practice is to simply send an InMail or message simply forwarding their email.
- More advanced tactics include liking, sharing, or commenting on content shared by the prospect.
6. The average number of touches per day is 95
Sales development is still a numbers game, but that should not come at the expense of quality. With technology, templates, training, and process, SDRs can produce high-quality personalized email and voicemail messages and still hit the quantity metrics needed to be successful.
- Organizations that execute 95 touches per day have optimized sales development processes in their CRM to make data management easy.
- These organizations drive high SDR productivity by leveraging technology including tools such as sales email automation and auto-dialers.
- Many of these organizations provide training on time management so that SDRs can organize their day to reach the required number of touches.
7. 37% of sales development teams keep live call length under 10 minutes
Shorter live call times provide more opportunity for SDRs to execute the touches they need to get their next connect. Our benchmark data shows that companies that keep calls under 10 minutes produce the highest number of SQLs each month.
- Live calls should be under 5 minutes for looser SQL definitions such as ANUM or AN, while live calls for BANT should be under 10 minutes.
- There is little correlation between SQL quality and long call times. Calls over 10 minutes often occur because SDRs lack the call structure and training to get answers to their qualifying questions and close for a meeting.
8. 50% of high growth companies under $25mm maintain a 1:1 SDR to sales ratio
Some high growth organizations even have an SDR:sales ratio of greater than 1:1. TOPO Sales Development Analyst, Bryan Gonzalez has a produced a blog post with this analysis on this topic that you can read here.
9. 54.5% of sales development teams incent SDRs on SQLs
SDRs should be compensated on a deliverable they can control which in sales development is the SQL.
- The quality of the SQLs passed to sales should by governed by the SQL definition which sales leadership must sign off on.
- In the situation where the SQL-opportunity rate is too low, but SDRs are fulfilling the terms of the SQL definition, the problem may be the SQL definition. In this case, sales and sales development should review the SQL definition and find areas to optimize.
- Many sales development organizations that comp their SDRs on SQLs also provide an additional bonus for closed business.
10. The average employment tenure for SDRs is 14.2 months
In the fastest growing companies, average tenure is under 12 months. As a matter of fact, 3.6% of respondents have an average tenure of under 6 months. Sales development has long been a “stepping-stone” position to other areas in the organization. As such, sales development leaders must plan for the fact that SDRs will be out of the group in a little over a year.
- Sales development leaders should always be recruiting. They should meet as many prospective candidates as possible whether they have an open position or not, leave the job description up on the website, and encourage employee referrals.
- Most high growth companies have SDRs at or near their number after 1 month. That’s critical because SDRs are not in the seat long enough for organizations to wait 3-4 months to achieve quota.
- Many teams have internal promotion plans to allow SDRs to grow within the sales development organization instead of looking elsewhere. For example, SDRs may start on the inbound team for 6 months before they have the option to be promoted to team lead (player-coach) or to an enterprise/outbound sales development team.
Average SDR Tenure
Overall average tenure for SDRs is 14.2 months, with over 85% of of SDRs staying in the role for less than 18 months.
11. 50% of sales development organizations leverage 5 or more technology applications
A sales development technology stack has emerged over the last couple years to address the manual processes that have hindered sales development teams’ ability to scale.
- The foundation of the sales development stack is CRM, sales intelligence, sales email tools, and data tools. Once the foundation is set up and the sales development process is optimized, teams should then consider auto-dialers and third party analytics applications.
- In 2015, we believe the big emerging category in the sales development stack will be touch management solutions. Touch management solutions solve one the biggest challenges in sales development, the ability to efficiently track and manage multi-touch, multi-channel touch patterns.
If you want to learn more, sign up for on-demand webinar of “11 High Growth Sales Development Strategies” and you will also receive a copy of 2014 TOPO Sales Development Benchmark Report.