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Strategic Sales Development: The 2016 TOPO Sales Development Benchmark Report

TOPO recently completed its 2016 Sales Development Benchmark Report. It represents the most in-depth study of over 150 world-class sales development organizations. The focus of our research was to understand what separates exceptional sales development teams from their peers. We discovered a number of unique characteristics that drive the highest growth, including strategy, organizational design, process, plays, and technology.

The primary goal of the benchmark is to provide sales development organizations with a framework to benchmark their performance against peers and understand the key trends impacting sales development in 2016. The benchmark is organized around our Sales Development Framework which looks at 90 data points across four primary categories in an effort to assess sales development performance.

Below are some of the key takeaways from the study. If you’d like access to the complete Sales Development Benchmark Report, contact TOPO for more information on joining our Sales Development Practice.

The Shift From Telemarketer to Strategic Sales Development Function

In 2016, we’ve seen sales development shift from a tactical, junior sales role to a strategic function that is critical to driving revenue growth. As part of this emerging strategic sales development agenda, organizations are creating thoughtful go-to-market strategies (versus having a tactical activity-based focus) to support strategic sales and marketing goals. An example of this trend has been the rise of the account-based movement where SDRs are executing personalized campaigns against a well-defined target account list.

The benchmark data we collected showed that top performing sales development organizations are making high impact decisions based  on key metrics such as ACV. These decisions are yielding better results both in terms of absolute output (e.g. qualified leads) and conversion rates further down the funnel. Some of the key trends we identified include:

ACV is the primary driver for strategic sales development decisions
ACV (Annual Contract Value) is the key number that informs strategic sales development decisions, such as go-to-market strategy and organizational design. When designing or optimizing a sales development team, it is important to look at similar organizations in your ACV range. For example, the benchmark of qualified leads passed to sales for $0-$10K ACV is 24.7 versus $100K+ ACV which is 11.3.

The close rate on sales development-generated opportunities is 22%
Close rate is the ultimate arbiter of success for any program and the 22% benchmark close rate is an excellent number. This type of success further validates the mission-critical value that sales development contributes to the organization.

The average SDR generates 18.2 qualified leads passed to sales per month
SDR organizations are driving more output than ever before. As mentioned previously, the specific quota for your team is determined by your ACV and the volume of opportunities needed to generate sufficient pipeline for sales. The data across the different ACV bands is reflected in the chart below:

sales development, SDR

Only 10% of organizations use traditional BANT qualification criteria
“Budget” has been nearly eliminated from qualification, except in very specific use cases. As a matter of fact, the use of “budget” as a qualifier has fallen by 62% over the last year. Instead, SDR organizations are using more simple qualification criteria such as Authority-Need (AN) or Authority-Need-Urgency-Access to Money (ANUM).

The average SDR-to-sales rep ratio is 1-to-2
The range of coverage ratios varies by the maturity of the sales team. For example, smaller teams of 1-10 sales reps are reporting 1-to-1 ratios while larger sales teams report 1-to-3+ ratios. Larger organizations do not prefer wider ratios; the real issue is that supporting tighter SDR:AE ratios would require an unrealistic number of SDRs (100’s or in some cases, 1000’s of SDRs).

SDRs are executing a higher number of touches per prospect (15+) across multiple channels (3+)
Automation and streamlined processes have enabled SDRs to design and execute high-volume multi-touch campaigns across multiple channels (i.e., phone, email, social, etc.) over a concentrated period. The number of touches per account is a significant improvement over the “batch-and-blast” strategies of the past where SDRs would send 1-2 emails before moving on to another prospect.

If you’d like access to the TOPO Sales Development Benchmark Report, contact TOPO for more information on becoming a member of the Sales Development Practice.

About the author: David Hershenson, Senior Analyst, Sales Development Practice, TOPO

David is a Senior Sales Development Analyst at TOPO where he uses best practices and research to help clients achieve success. David has spent more than 15 years developing a high level of subject matter expertise running Inside Sales and Sales Development teams and is passionate about the design, initiation, and growth of sales organizations. As an experienced practitioner, David has held numerous leadership roles for successful SaaS companies, including Salesforce.com, Yammer, and Zendesk.

 

  • Sachin Bhatia

    Hi David Awesome Stats.

    1. What are your thoughts on the SDR applicability on < 5K ACV deals. There is an analysis that I found done by bridge group that mentioned that < 5K ACV does not warrant a SDR team.

    2. Also have you seen a difference in pod vs pool structure. Pod- SDR AE one team Pool a pool of SDRs working for a pool of AEs?

    3. Finally as a process Once SDR passes a lead and it goes cold. Who does it go to? SDR / Marketing / stays with AE.

  • Dave – solid research and very helpful in answering some of the common questions Sales leaders have when discussing SDR programs.

    Sachin – here are my 2 cents:
    1. At that level it might not make sense. Plug all the numbers into a spreadsheet and do some variables. I’d bet with all the costs of hiring, training, OTE, benefits, etc, for that size ACV it wouldn’t make sense to have SDRs.
    2. Sorry for vague answer, but I’ve seen both and each has advantages and disadvantages based on the unique business you’re in. Depends on industry, vertical, ACV, timeline, career path for SDRs, on and on. On a side note, Jacco Van Der Kooji has a great book out that explains the value of pods in more detail. He’s a big advocate and I’d recommend chatting with him if you’re considering pods.
    3. This is where a good lead scoring solution would be helpful. You can set it up yourself or plug in a predictive solution vendor, but the point is that, depending on the score, the leads that go dark can be routed in different ways. For example, perfect fit and behavior leads (A-Leads), can stay in front of AEs constantly until revived, B-leads can go into the SDR queue for occasional follow up, and C’s and D’s can go to marketing nurture or junk. However you want to set it up. But in my view, without the sorting ability offered by a good scoring system, it’s tough to route them correctly.

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