Should SME's Have A Sales Development Function?
Updated: Oct 22, 2019
Sales, as a function, has historically been very straightforward. Companies would hire a salesperson, and that person would actively try to find new customers for the business. Typically, it was that person's job to research for suitable companies to reach out to, perform some kind of cold outreach to the buyer in each company, take them through the solution that they were offering, finalise negotiations and, in many cases, be the account manager after the contract was signed.
Best practices have since changed and sales leaders now understand that it is better to break up these responsibilities throughout the sales function. The driving factor behind this shift was the realization that the historical approach was flawed for a number of reasons:
It is too much for one person to handle simultaneously. More often than not, outbound sales is not practiced consistently with this kind of role because the rep does not have the capacity to do everything at once. Proactive outbound sales is always the first thing to slow down when a sales person gets busy.
It is very unusual to find someone who is good at researching, copywriting for cold outreach campaigns, leveraging technology to create efficiency AND meeting clients to close deals. It is even more unusual to find a natural sales person who is happy to spend so much of their time doing the administrative work of researching and prospecting!
Companies pay a premium for a senior sales person whom they can trust to represent the brand well when meeting prospective clients. It is not economical to have this person spend more than half of their time on non-selling activities that can be handled by someone who is costing the business significantly less every month.
The Sales Development Function
The Sales Development function was created to solve this problem. Many organizations are now hiring Sales Development Representatives (SDR’s) at scale to handle the labour-intensive elements of the sales process by doing all research and cold outreach before passing qualified leads to Account Executives (AE’s) to meet each prospect and close deals. The world’s fastest growing technology companies leverage this function by hiring teams of 20+ SDR’s at a time so that they can create a consistent pipeline for their AE’s to close.
The Challenge For SME’s
When you factor in salary, recruitment, management time, office space, technologies, medical, visas etc., the average cost per SDR to a business is $150,000 per annum. The ramp period for SDR’s can be quite slow and due to the repetitive nature of the job, SDR’s only last an average of 15 months in the role. When done at scale and with the right processes in place, economies of scale can be achieved and these challenges can be overcome.
SME’s, however, can not usually achieve these economies of scale and for the above reasons, hiring one or two SDR’s as an SME can be a very risky strategy. When the customer acquisition cost associated with any converted lead as a result of SDR efforts is assessed, the math does not typically work out in these cases.
The function is designed to work with a team of at least 3-4 SDR’s who have a dedicated manager, which significantly increases the fixed costs and is not feasible for the majority of SME’s.
Solution For SME’s
Outbound sales should always be a priority and even though it is not economical to have your senior sales team spending their time on administrative work or to hire a Sales Development function internally, there is a solution: Outsourcing the function.
At Leadable, we partner with SME’s to operate as their Sales Development function. We compartmentalize the function even further with dedicated researchers, expert copywriters and sales professionals to run campaigns and schedule appointments for our clients existing sales teams to close. The cost to a business to hire one SDR is approximately 3.5x the cost of hiring a team of specialists from Leadable and it comes without the headaches of ramp periods and attrition.
Ready To Fill Your Pipeline?
Consistently filling a pipeline with prospects who fit your Ideal Customer Profile leads to predictable revenue. Contact Leadable today to give your sales team a consistent pipeline from the type of accounts that will move your business forward.