The Bridge Group, a business management consulting firm, has recently released their 2016 Sales Development Metrics and Compensation Benchmark Report and much like in previous years, the findings are proving to be quite useful. One of the biggest takeaways has been that segmenting your sales team into SDRs (sales development representatives) and AEs (account executives) is one of the smartest ways to maximize your power pipeline score.
The study discovered that companies that make more than $5M in yearly revenues are more likely than smaller businesses to segment their sales teams, with increasingly higher percent likelihood of segmentation as the company made more money. This is due to lack of funds in smaller companies that allows them to segment. They also highlight the benefits of specialization as 1) tighter focus and increased accountability, 2) process alignment with prospect behavior, 3) defined career paths, and 4) role-specific innovations. Reading the study and seeing the conclusions, it makes sense to consider segmenting your sales teams to reap the benefits that other companies are already familiar with. But what if you can’t segment your sales team because you don’t have the budget to hire new members? Some decisions are easier than others, but here’s what you can do:
The study found that SDRs need experience in sales but not as much as AEs. The average SDR today has about 1.3 years of experience, which corresponds well to the kind of activities their job entails. But if you have a team of experienced AEs and no budget to hire SDRs, you’ll have to let some of your staff go so you can properly segment your team. It’s never easy to let someone go, but if you’re serious about growing your business, you’ll have to admit that you made a strategic mistake in hiring too many AEs and no SDRs. Learn your lesson, give as much notice as you can and don’t make the same mistake again.
This option is somewhat preferable to laying off your team members, but it will be a hard pill to swallow for some of your employees. However, if you can pull this off successfully, you’ll be able to retain trained team members and get the SDRs you need to grow your pipeline. The Bridge Group recommends hiring at least two or three SDRs so choose AEs who are new to the role or the weakest links and try to position the change in responsibilities as a way for them to learn the ropes, improve their performance and continue on a career path with your company.
If you don’t want to discourage any employees and you’re willing to let go of the idea of segmenting your team, you can make your team more productive to try to imitate the effect. First, you’ll want to encourage productivity through apps and software. Next, you’ll need a CRM to manage contacts and you’ll need to make sure that it’s properly organized and easy to follow so there’s no duplicate calling or emailing. Finally, consider employing an automation platform that can send emails and schedule appointments for your SDRs. This is a bandaid solution so don’t depend on it for the long-term, however, it will work until you can segment your team properly.
With a sales call platform, you don’t have to hire SDRs, but you tap into a network of trained sales agents who can do your prospecting for you. It’s easy to upload your contacts directly from a CRM, write a short script that agents can follow and follow along with reports to optimize your call campaigns. Tomasz Tunguz recommends having an Average Contract Value (ACV) over $3,000 to justify building out your sales pipeline, but since sales call platforms are cheaper than hiring and scale much faster than SDRs, you can start segmenting much sooner. This option is quite new so you might have to work to convince your investors/VP of Sales, but it does have a lot of potential to change the way you prospect. Don’t be afraid to be one of the first to jump on board.
The Bridge Group is a leading resource to find out what’s new in the industry and to benchmark against other companies. To ignore their recommendations is foolhardy and we can’t stress enough the importance of this new finding. As Winston Churchill said, “to improve is to change, to perfect is to change often” so, if you want to keep up, you have to be willing to listen to data and act accordingly. If you can’t segment your teams by hiring new SDRs, your other options are laying off your current AEs, demoting at least two or three of them to SDRs, putting off segmenting and trying to make your team more productive or tapping into the power of sales call platforms. Each option has its positives and negatives, and ultimately you’ll be the one to decide what’s best for your business. However you do it, don’t leave your sales team doing everything. It’s a recipe for disaster.