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Eight Reasons Sales Development Teams Fail

One of the most critical functions in converting leads to opportunities is a sales development team. Sales development is a group whose main job is to identify, connect with, and qualify leads. When a lead is qualified, they hand the qualified lead over to a sales person who is in charge of working the rest of the sales process and hopefully, closing the deal. Some organizations call this role lead qualification, lead development, account development, telemarketing, or inside sales. For this post, we will call the role “sales development”.

Your revenue often depends on having a high-functioning sales development function. I am one of the biggest proponents of the sales development role. Here is a brief write-up that includes my views from Marketo’s Definitive Guide to Lead Qualification:

Whatever their exact name, these Sales Development Representatives (SDRs) have one exclusive focus: to review, contact and qualify marketing-generated leads and deliver them to Sales Account Execs. Aaron Ross and Craig Rosenberg are two of the biggest advocates of having a separate sales development function. As Craig says, “The most successful lead generation/lead management programs have dedicated phone resources whose sole job in life is to take raw inquiries and qualify them before they are sent to sales.”

Step one is to make the decision to have a sales development function. Step two is to make sure it is a high functioning part of the organization. Below are eight reasons that sales development teams fail and some tips on how to avoid these problems.

1. Sales development is treated as “lower class” citizens

The sales development role can be lonely, thankless, and isolating. Many organizations treat them and view them as the bottom of the food chain. In reality, they are absolutely critical to making or breaking your pipeline. As such, sales leadership needs to care deeply about how the group is perceived and how they feel about themselves. Organizations should find ways to recognize sales development’s efforts. Here are some examples of things an organization can do to avoid this issue:

  • Invite top sales development performers to sales club
  • Mention individual and overall team performance at sales meetings or all-hands meetings
  • Send sales-wide and company-wide emails recognizing great qualified leads or excellent work
  • Ensure that sales development is thanked for qualified leads that close (the little things matter)
2. The team lacks direct management and leadership

It is an absolute requirement that sales development teams have leadership at all times. We have seen a variety of sub-optimal scenarios: sales development teams managed part-time by the VP of Sales or by regional leaders or by sales operations. This team should never be managed by anyone part-time. Sales development is challenging and will fail if there isn’t someone there full time to help optimize, coach, motivate, hire, and most importantly, care about them. This problem actually happens a lot and is a guaranteed recipe for failure.

Once there are more than eight SDRs to one direct manager, then an organization should hire or promote someone to be a direct manager. Once you extend past 8-to-1, it’s very difficult to manage and coach effectively. If the headcount/costs are a factor and there is a strong director and mature sales development process, you may consider hybrid, player-coaches. My preference will always be for dedicated managers but understand that may not always be the reality.

3. No training and no coaching

Many companies fail because they train sales development briefly and then “let them figure it out”. Furthermore, many companies also focus their training primarily on the product. The recipe for failure is to spend a couple hours walking the SDRs through some product marketing developed training and then let them fend for themselves. While sales development should understand the product, the key to success is to dedicate time and resources to SDR specific training and coaching.

Training and on-boarding should consist of:

  • Buyer persona training – Spend time training SDRs on the buyer: Who is the buyer? What makes them tick? How do I communicate with them? How can I identify where they are in the buying cycle? What should I talk about if they say X?
  • Sales development skills training – Sales development should be trained on the skills it will require to be great at their job. For example, the sales development team should be trained on things like: leaving a voicemail, writing a sales email, overcoming objections. If they are cold calling, SDRs need a process and platform that they can be trained on to be successful.
  • Headset training (aka tribal knowledge) – Often the best training for sales development is to sit in the cubes of the best sales development reps with a “splitter” and observe them for 2-3 hours at a time.
  • Tools training – It is absolutely essential that organizations commit themselves to training SDRs on the tools and applications they have at their disposal. Tools range from CRM (sales development teams should be using their CRM in a consistent way) to Sales 2.0 tools. Provide training that shows SDRs how to use it and WIIFM (“what’s in it for me?”).
  • Product training – Many organizations are surprised about this, but product training should be last. One note on product training: SDRs need to know enough to be dangerous. (BTW, so do sales people). What is it? Why do people use the product?, What else do buyers use? How do you differentiate the product in plain English?

Coaching means working with sales development reps and making them better. It doesn’t matter if they are new or experienced – someone has to be focused on working with SDRs and making them better. Managers should set aside time to provide 4-5 hours of coaching per month (Corporate Executive Board recommends 3 hours for coaching so be a go-getter and do more). Some ideas for coaching:

  • Call monitoring – Sit in the cube of the SDRs and listen to calls. Many SDRs and some managers view this as “micro-managing” and they are wrong. The VPs of Sales for the top sales organizations in the world go on sales calls with their best sales reps and give input. This activity is called good coaching. Actually, it’s the best coaching. It does become intrusive if the manager doesn’t provide value. It becomes indispensible if the manager can help tweak or optimize the SDR process. It is critical for the manager to spend time “in the cube” to really see what needs work.
  • One-on-ones – Managers should set up a one-on-one with each of the SDRs. Managers can use this time to give SDRs a platform for asking for help or just talking.
  • CRM, tools and process coaching – Sales development success is dependent on effective use of automation and adherence to the process. It is a guarantee that SDRs like anyone else will pick up bad habits or not leverage automation. On a one-to-one basis, managers should coach SDRs on tools and process.
4. No agreed-upon qualified lead definition

The qualified lead definition is the point where a lead is deemed qualified and ready to be passed to sales. There are some key points to this part of the process:

  • The definition has to be agreed upon by both sales development and sales.
  • Sales must agree to an SLA for follow-up for leads that fit the definition of a qualified lead.
  • The definition cannot be too restrictive . As a matter of fact, start broad and then tighten up later one there is data and sales rep feedback.

The argument over lead definitions needs to be solved before the first qualified lead is passed so expectations are set for both sides. The definition can and should be refined and optimized over time.

5. Not focusing on generating qualified leads

Many organizations kill their pipeline by allowing sales development to be the dumping ground for “things sales doesn’t want to do” or to become the special projects team for marketing. Some of the common “responsibilities” dumped on SDRs are sales support, inviting people to events and doing surveys. Decide on what the qualified lead definition is going to be, decide on a quota, and then focus and optimize towards over-achieving that goal. This problem is one of the reasons the team has to have a dedicated manager. Some might say: “Why can’t the SDR team invite people to events?” My answer: “They can if they count as qualified leads.” Keep the SDRs focused.

6. Bad compensation plans/wrong incentives

The sales development compensation plan should be simple:

  • Monthly quota for Qualified Leads (e.g. 10 qualified leads).
  • Compensation per qualified lead (e.g. if the SDR bonus is $2,000, each qualified lead is $200).
  • Accelerated compensation for qualified leads delivered over quota (e.g. each qualified lead over 10 will be paid at $300).

It’s simple: no MBOs, etc. If you want to compensate for closed deals, then give them a % bonus when a deal closes. But SDRs should be compensated based on what they can control, and they cannot control whether a deal closes or not. One guarantee: if an SDR is tied only to revenue, then they will become sales support. They will be making quotes, setting follow-ups, and so forth.

7. Wrong people in the job

The SDR role is not one for everyone. Often times, organizations haven’t fleshed out their target SDR profile or optimized their hiring process. Another problem is that it’s hard to identify if someone can really do the SDR job until they are actually “sitting in the seat”. Hiring SDRs is hard and mistakes will be made. The problem is when organizations don’t attempt to handle the issue and the SDR team becomes an underperforming, demoralized mess. Here are a couple things to consider:

  • Optimize the job profile based on previous hires (good and bad). The job profile should guide the people doing interviews to help identify SDRs that are more likely to be able to do the job – not just people they like.
  • Release people who are “bad-fits” from their misery – This comment may sound cruel, but it isn’t meant to be. The truth is the SDR job can be a real drag for people that aren’t suited for it. I promise: “bad fits” will thank you later for forcing them to move on.
8. Lack of communication

Communication always sounds like simple advice but in the case of sales development, it is often the root cause of a failing team. The sales development team sits in between sales and marketing so there has to be lots of bi-directional feedback. Here are some important “must-have” meetings:

  • Sales development-marketing meeting – In an ideal process, marketing is feeding leads to the sales development team to follow-up on. Sales development and marketing need to meet regularly (hopefully once a week) in order to optimize lead programs. When optimizing a lead program, both sides need to look at overall lead quality (e.g. are leads hitting the right target buyer?) and lead follow-up (e.g. how is sales development approaching these leads?).
  • Sales development-sales meeting – In the same way sales development meets with marketing to discuss lead and campaign flow, sales development needs to meet with sales to optimize the qualified lead process. The best sales development programs are optimized based on both qualitative and quantitative feedback from both good and bad qualified leads. As well, another area that can lift conversion is to optimize the hand-off and introduction from the sales person. Many sales development programs have been saved by working with sales on what is said AFTER the qualified lead is passed.

The sales development team sits in one of the most critical conversion points in the marketing-to-sales lifecycle: The transition from a lead to a qualified lead or opportunity. The best companies have highly optimized sales development processes in place. This post is designed to help make the sales development process successful and keep sales happy.

What has been your experience? Are there any failure points we missed? Let us know in the comments below.

Special shout-out to Lars Nilsson from SalesSource who I have worked with for years on making Sales Development work and to Stu Silverman who is my mentor on everything inside sales.
Craig Rosenberg is a co-founder of TOPO and the author of the sales and marketing blog Funnelholic. He loves sales, marketing, and things that drive revenue. Follow him on Google+ or Twitter

  • Mike Damphousse

    SLA SLA SLA
    Sometimes qualification SLAs are over done. Most good sales people, given the right prospect…a person with the right “Authority”…can then create an opportunity. It is about selling, right? And the sales process doesn’t start until you’re having a conversation with the prospect. Consider loosening your SLA to focus on finding the right person that is interested enough to talk with you. Then book an appointment and sell.

    Mike Damphousse
    Green Leads

  • Chris Beall

    We take an approach that’s a bit different – give our closers both the responsibility for qualifying leads and the technology to make it fun and efficient. The approach solves most of the very real problems detailed in this post by strongly coupling the qualified lead to the eventual opportunity. Our reps own both and have zero incentive to game anything, either unconsciously or deliberately. They click a buttons and talk to another lead within a few minutes – and the. Have to live with the consequences of qualifying, or disqualifying, that lead.

  • trishbertuzzi

    Hmmm… I think these reasons were more true a couple years ago but I think SalesDev has taken it’s seat at the table and many forward thinking organizations have and/or are addressing these issues. Fingers crossed anyway right?

    The biggest reason we see for failure is that the organization, at the highest level, has not clearly defined who they are targeting. They either think they are a horizontal play or use a shotgun approach to generating leads. This forces the SalesDev team to spend time seperating the wheat from the chaff and impacts their effectiveness. Combine that with ill defined or boring messaging and we have set them up to fail.

    Thanks for a great post and making me think!

    • Good addition. I am surprised on your comment about my comments being out-dated. I certainly see more sales development out there and better processes but I don’t think we would have jobs if problems like this weren’t persisting.

      • trishbertuzzi

        Not sure I said out-dated… just that these are well recognized problems that many organizations have identified and have moved beyond (but perhaps my view is also skewed by the fact that startups are not our target market).

        Having said that there a whole new set of challenges to building successful teams that have arisen. No worries.. we can keep our jobs.

        BTW, I wish you every success on your new venture!

        • How did you respond so quick!

          • trishbertuzzi

            I am a recovering workaholic…plus I pay attention to you when you speak online or off!

    • Kevin Gaither

      At least he talks about Buyer Persona training? You’d rip him a new one if he didn’t include that right? 🙂

      • It is an omission. We don’t do ANY of our consulting without buyer persona work. Marketing, sales, etc. Good call.

    • David Butler

      +1 Trish on the lack of “Targeting”. Targeting, positioning are the foundation for enabling the right storytelling and building the loyal audience. SalesDev is part of the storytelling engine and can be even more creative and successful if they always know “What is our story”

  • Kevin Gaither

    (This comes from a place of pure love….huge fan of Craig and he’s a mentor and influencer of mine…but I gotta stir it up right?) What Craig does NOT really discuss is a RELENTLESS focus on key metrics such as Conversations, Call to Conversation Conversion %, Conversation to Lead Conversion %, Lead to Booking Conversion %, $ Pipeline Generated, Revenue Generation from Leads Passed (overall and by rep), Cost per Lead, Revenue to Cost Ratio (similar to CAC but can be adapted for non recurring revenue models) and THEN Calls. I HATE measuring calls. Absolutely useless. Who gives a rat’s behind if you know how to dial the phone….good for you. Impress me by making LESS calls and getting 10 people ON the phone and converting them to a Qualified Lead.

    • trishbertuzzi

      Nice addition to the list Gaith.

      • Kevin Gaither

        The Gaith Abides

    • Jesse Davis

      I basically agree with you, Kevin. BUT the main reason that I like to look at calls is to try and see patterns. If my best reps are consistently making 20% more dials than laggards then it might influence my playbook. I know Trish put out some data last year showing that the average rep makes about 33 calls in a day. But for outbound reps, I think it takes a lot more than that to hit numbers. But yeah, at the end of the day if a rep is dialing like mad and not seeing any results, it indicates another issue.

  • Julie Renalds

    Excellent, excellent piece Craig. I was not aware of you until I saw this posted by one of my contacts. I went out on my own w/my consulting practice as a result of feeling like I was penned in (think cattle) at a F200 software company w/a huge lead dev group (a company that made many of the mistakes that you mentioned).

    You know your stuff–inside and out.

    I’m delighted that I found you.

    • Of course, I voted this comment up. (: Nice to meet you as well Julie!

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