Having a dedicated sales development team is still a relatively new concept. The idea was popularized by Aaron Ross’s book “Predicable Revenue” and successful implementations at big companies like Oracle. As sales development teams have become somewhat obligatory for any startup with a sales team, managers overseeing Sales Development Reps (SDRs) often ask themselves how they should be measuring success. What sales development metrics should you be tracking?
What does a sales development team do?
SDRs are responsible for generating a pipeline of qualified leads for Account Executives. The methods they use to source these leads are broken down into “outbound” and “inbound” lead generation. Outbound means an unprompted reach out (yes, including cold calls and emails) to people they have identified as ideal potential customers. Inbound leads come from potential customers expressing an interest in your company in some way (signing up for a newsletter, visiting your website and leaving their contact information, etc.) before the SDR reaches out. SDRs ultimately tee up opportunities for AEs to project manage the sales cycle around, and turn into happy, successful customers. They are the front lines of your sales team and are often the first interaction someone has with your company. This is a pretty bare-bones outline of how sales development teams work, but I think it’s enough of a primer to allow us to dive into the meat of this post- what metrics you should be tracking for your SDRs. If you want to learn more about the history of sales development and why it should be a key part of your sales organization, check out this post from the team at PersistIQ.
Considerations when determining which metrics to track
The rubric for a successful SDR should be tailored to match up with the Sales team’s goals as a whole. That means the metrics your team is judging SDRs against should not only be different than how the ones at your friend’s company, but that they should change as your sales team and the sales landscape adapts and matures over time.
- Who are you selling to?
Are you doing high-volume transactional deals or enterprise agreements that take 6+ months to close? If you are focusing on Fortune 100 companies, that means there are only 100 possible leads your SDRs could generate in a month. If you’re focusing on transactional deals at $200 a pop, you’re going to need a lot of leads to get your sales team to hit their revenue goals.
- What stage is your company in?
Early stage companies might want to focus on just talking to as many people as possible to refine product market fit, which means your SDRs should be focused on booking appointments for your AEs. If you have a solid customer profile you’re going after, then you want to encourage SDRs to only reach out to people who fit that description.
- What leads are your SDRs working?
If you’re buying lead lists it’s easy to keep things equal and fair across the sales development team. But if you have inbound leads you need to consider how opps routed to SDRs. Should you create a lead score to make sure some people aren’t always getting the most appealing leads? All your SDRs should have an equal opportunity of sourcing new opportunities or creating their own outreach projects when lead flow is light.
- Do you need to create a feedback loop?
SDRs do not exist in a vacuum. The most immediate cross-team relationship is between SDRs and AEs. If AEs are not closing a high percentage of leads they get passed by SDRs, there is probably an opportunity to improve the lead qualification process. If any of your leads come from inbound sources then the work of the demand generation, content marketing, and online marketing teams all affect the success of your sales development team. For instance, if the email to leads generated percentage for new newsletter subscriptions is really low, it might be a good idea to send these contacts marketing materials before passing them to a SDR.
- Have you properly aligned incentives?
People are in sales to make money, and your sales team should be full of sharp and talented individuals. That being said, they will find ways to rig the system if they can, so think about introducing metrics that not only align with short-term goals, but long-term value for your company. If the only metric you care about it calls made or leads passed to an AE, SDRs will scrape the bottom of the barrel to find things that barely meet your qualification requirements.
When SDRs are measured on both volume (calls made, number of leads passed) and quality metrics (how many of those leads close, average transaction size), then they are more likely to put in the effort to reach out to bigger and better leads that might require more time or finesse.
- Are there values you want your team to embody?
Is it more important to focus on getting results at all costs, or do you want to also build in a dimension of ethical and a value system you want to hold your sales team to?
Sales Development metrics to track
Number of opportunities passed (you can also track the number of opportunities closed by AEs if the focus is on passing only highly qualified leads)
Leads dissected by source they originated from (allows you to provide feedback to other teams involved in inbound marketing efforts)