Rethinking Sales Development: Insights from Orum's CEO
Aug 24 2020
Startup founders and CEOs often overlook the importance of building a great sales development organization. This is a costly mistake that can damage your company’s culture and allow your competition to gain the upper hand. Instead, as CEO, you should develop a sales development strategy that can be the secret weapon that will drive your company to the next level. This article will explain step-by-step how to achieve this.
The problem of overlooking sales development
CEOs have a lot on their plate, and rely on their top-line sales leadership to execute the details of their sales strategy. CEOs love to get involved with the sexier part of the sales process, whether that's to help recruit an all-star AE/Sales Manager or help close the biggest deal in the company history. Your VP of Sales, if they're truly qualified and experienced, likely hasn't been directly involved with a sales development team in a very long time. They will likely try to outsource this job to a less experienced manager, in the hopes of off-loading the dirty work of recruiting and managing entry-level candidates in order to fill the pipeline of their prized AEs.
Many months later, several significant and expensive problems arise:
- The AE team, with the support of sales leadership, claims they don't have the pipeline needed in order to hit their numbers. They ask for more SDR headcount (closer ratio), a change in sales development leadership, or some other budget-intensive solution to the problem.
- The marketing team, who has worked tirelessly to build a world-class events/lead engine, astutely reveals that a significant portion of the expensive leads that they've produced haven't been processed or touched with enough effort.
- The sales development team, which has now ballooned to 15+ reps, is in desperate need of additional management and training. Meanwhile, morale/activity is low due to the fact that SDRs don't see the promotional path to the field that they were once promised.
The CEO and CFO, who are now spending close to $2 million on their sales development efforts, are left with little choice but to spend even more money. Meanwhile, your precious company culture, the place where people are supposed to come to do their best work, is churning and burning talented young sales development reps, who then leave scathing Glassdoor reviews for your engineering and executive recruitment prospects to read as they make the biggest career decision of their life.
This is an incredibly common and avoidable situation.
Building a sales development team from first principles
The first thing you need to do is work with your VP of Sales to build a sales development strategy that's based on first principles —not on your VP of Sales' experience, and not on what your friends’ companies are likely doing. You need to treat your sales development organization with the same level of thought that you treat your engineering organization, and figure out a way for sales development to be a fundamental differentiator for your company. Goals may not be the same for all companies, but this is a great place to start:
- Create a program to recruit top entry-level talent from universities before they start their career elsewhere. Build a program that brings in the smartest and most motivated graduates, and let this program act as a bench for the rest of the company to recruit from as you grow.
- Build a consistent and efficient sales pipeline that aligns with your company sales goals.
- Build systems that leverage software/automation to produce consistent results, monitor performance, and help inform the business on how to invest further. Don’t pay talented new grads to do grunt work.
Once you decide that this is what you want to build, you can use this vision in your recruitment efforts and have a mission to reflect back on.
Recruiting the right people
Recruiting is the most critical aspect of building a company, and it is likewise the most important part of building a great sales development team. Nothing, and I mean nothing, will fix a sales development team with the wrong people on it. No new management, no tool, no compensation plan, nothing.
Despite this, I see companies (even startups!) where the CEO doesn't get involved with the SDR interview process. You are the CEO because you are extremely talented at screening and recruiting great people to join your company. SDRs are entry-level and therefore have the highest risk and potential, so it's unbelievable that you wouldn't act as an integral part of the interview process. If you're truly on the path to building a long-term public company, the young college graduates that walk in the door have the potential to be great AEs, executives, and may even end up replacing you as CEO once you retire.
While losing an SDR due to a bad hire is less expensive than losing an engineer or executive, it's still incredibly expensive (100k+), and does irreparable damage to your culture. It's worth your time to get involved and interview every single person that joins. I often speak with SDRs who joined the company who have never met with top-line sales leadership, or have only spoken with them briefly. This is such an impactful and easy thing to fix.
Finally, if a candidate is truly a top 1% stand-out new grad, meeting with the CEO can be the deciding factor that causes them to choose your company over the competition. If they feel like they have a relationship with you, and you have their best interest in mind, they're much more likely to stick through delayed promotions or the rough times that your company will inevitably go through.
If you only change one thing, change this.
Tools and automation
Once you've decided that you're going to invest what's necessary to recruit great people, you need to accept the fact that no one, especially high-talent individuals, is excited to do grunt work. This doesn't mean that your SDRs won't have to work hard. It means that they shouldn't be doing tasks that can be automated or outsourced. Software and automation is always significantly cheaper than headcount, and there are zero exceptions to this that I know of. Figure out what the best-in-class solutions are and don't cut costs in this area. I've seen countless organizations cut the budget for sales tools while increasing their SDR headcount. This is outrageous.
Without going into too much detail, you need, at minimum:
- CRM (example: Salesforce)
- Cadence management (example: Outreach or Salesloft)
- Dialing automation (example: Orum)
- Data (example: SalesIntel)
Don't skimp on the four things above. If there's extra room in the budget, conversation intelligence, analytics, prospect outsourcing, and video/gift platforms are a great addition, as well.
The core job of the SDR is to be the frontline face and voice of your company. They should spend their day having live conversations with inbound/outbound prospects, explaining your vision, differentiating from your competition, and helping potential clients navigate resources at your company. Their job is more similar to yours than you might think.
SDRs should not be mindlessly blasting email and spending hours doing data-entry/pre-call research. When you walk by your sales floor, which you should do often, it should be loud! In other words, your sales floor should have a “buzz.” Accept no excuses if this isn't the case.
Training and promotion
When you've automated away the grunt work of sales development (manually calling, data entry, etc), your SDRs will have the fun, challenging, and intimidating job of having hundreds (or thousands) of live conversations with prospects. They'll be speaking with people who were once apathetic towards your solution/product and have the talent to get them to think differently about what you have to offer. They'll be doing this with a personal touch and scale that your marketing team won't be able to match.
Automation also leaves a lot more room to set aside for training. While your startup isn't meant to be an extension of their university experience, in many ways it can and should be. You'll be amazed at how talented and skilled a once-clueless SDR will become after 3–6 quarters. You may not even need to build an ascension model because the managers in the field will prefer to hire from the SDR organization rather than taking risk on hiring an AE from the outside. This starts with recruiting, and no program or ascension model will force this process.
It's also likely that your SDRs will want to be promoted faster than the business wants and/or needs, which is why their personal relationship with you and other members of top-line leadership is critically important to get them to stick with your mission long enough for them and the business to become truly ready.
You have the opportunity to make your sales development programs the cultural bright spot of your sales organization. Sales development isn't just a detail for your VP of Sales to figure out — instead, it's the talent bootcamp of your organization, and a primary engine of growth.
There are many operational details that you'll have to figure out as you build your team, but it's critical to get involved and get the basics right.
The Orum team looks forward to bringing you more content to help you take sales development to the next level!
Jason Dorfman is the CEO & Co-founder of Orum and has spent 10+ years in startups, sales, and sales development. Previously, he was the first sales hire at Rubrik, where he built their WW inside sales and corporate sales teams, helping take Rubrik from a $0 to $600M run rate in less than 6 years.