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