Josh Lowry

Are You Promoting SDRs Too Fast?

When Aaron Ross and Marlou Tyler authored the book Predictable Revenue in 2011, segmenting workloads across the sales process became popular among cloud and SaaS companies. In a nutshell, the book said the sales process should be segmented into sales development (qualifying), account executive (closing) and account management (expanding). The reason: Sales organizations achieve better analytics (clear metrics to diagnose issues), increased focused (role specialization) and talent development (career development and progression).

While many cloud and SaaS companies have adopted the workload segmentation model, many sales leaders under pressure to fill roles or retain talent have set false or wrong expectations with sales development representatives (SDRs) about the time in role necessary for both the company and the individual to be successful. Many SDRs new into their career are told that if they perform well, they will be promoted to an AE role within six to 12 months. While this can happen successfully, more often it does not due to timing, performance, needs of the business, etc.

Research by The Bridge Group found a high failure rate of SDRs promoted to AE too soon. SDRs in role 1-10 months had a 55% failure rate; SDRs in role 11-15 months had a 39% failure rate; and SDRs in role 16+ months had a 6% failure rate. Success was defined as being an AE for six months or more and failure as six months or less. The Bridge Group also found that while the average SDR had 1.3 years of work experience when hired, nearly 20% had less than one year of experience. Promoting SDRs to AEs too quickly negatively impacts both performance and success.

How then can sales leaders attract and retain SDRs, often impatient for advancement and increased responsibility, while helping them develop the knowledge and skills necessary for long-term success? Below are five strategies.

1. Be consistent and set expectations. Communicate and set forth the knowledge, performance, skill, time, etc. needed in the SDR function and role, especially during the hiring process.
2. Foster a culture of development and growth. Being a SDR is more than call time and dials. It involves growing as a sales professional; e.g., product knowledge, sales methodology and process, social selling, etc.
3. Role promotion in current function. Define the requirements to advance within function; e.g., Inbound SDR to Outbound SDR. Help SDRs increase the breadth of their experience.
4. Step promotion in current role. Define the requirements to advance within role; e.g., SDR to Senior SDR. Help SDRs increase the depth of their experience.
5. Stretch assignment in current role to enhance career goals. Help high-performing SDRs develop practical AE experience. For example, have a SDR give a product demonstration and lead the Q&A session during a webinar.

When business needs and career goals align, another effective strategy is to “export” sales development talent to complimentary, adjacent functions; e.g., sales development to customer success or sales development to marketing. The key is to build the knowledge and skill necessary to ensure continual engagement and long-term success.

All contents copyright © 2017, Josh Lowry. All rights reserved.

Is Your Pipeline Healthy or Unhealthy?

Too often salespeople believe that their pipeline is healthy and hitting their monthly or quarterly quota target is well within reach. The problem is that these same salespeople often miss their targets and end up blaming customers, the economy, the product, etc. for it. While there are many factors that come into play to consistently hit quota, pipeline health is a major one. So, how do you know if your pipeline is unhealthy? Below are seven indicators to help you make an assessment. They are:

1. All losses are devastating. If you only have “enough” opportunities in the pipeline to hit quota, losing one means missing target for the month or quarter. Success with no margin of error is unlikely, especially over the long term.
2. Forecast is regularly inaccurate. If you continue to miss forecast, there is a strong likelihood that you lack a consistent sales methodology and process. Should the opportunities committed truly be forecasted?
3. Holding onto deals too tight. Even though all signs point to an opportunity being “dead,” you continue to hold onto it. When not enough active opportunities are generated and worked, hope becomes the strategy, not good.
4. Underperformance against targets. You knowingly or unknowingly do not have enough opportunities to deliver quota. Question: Does your sales funnel support current meetings, opportunities and win rate targets?
5. You are desperate for sales. When you are desperate, customers sense it (“commission breathe”). Engagements go bad and opportunities are lost when sellers do things for themselves, not customers.
6. You are not working with ideal customers. When you do not have enough deals in the pipeline, customer engagements may not be ideal; e.g., wrong industry. Ideal customers accelerate revenue growth.
7. You feel rejection for deals lost or pushed. When you do not have enough deals in the pipeline to cover losses and pushes, you take it personally. Accountability means never blaming customers for performance.

Considering the above, how can you fix a broken or unhealthy pipeline? If you have not defined your ideal customer profile, focus on quantity first and then quality. If you only focus on quality without knowing the key attributes on your idea customers, you will miss out on learning key data and information. Or, if you have already defined your ideal customer, focus on increasing your activity level. What are your ideal customer sources (“lines in the water”)? What is your plan to get in front of them (e.g., cold call, social media, etc.)? What actions need to be taken?

Building and maintaining a healthy pipeline requires action. There are four types of action salespeople can take. They are: no action, normal action, wrong action and massive action. How do you know when you have taken massive action? When you lose a deal and your performance is not negatively impacted because you have other opportunities to cover for it. Or, you can do business with who you want (ideal customers). Or, you have the right number of opportunities to consistently deliver quota. Question: When is your pipeline big enough? Never.

All contents copyright © 2017, Josh Lowry. All rights reserved.