What is the meaning of sales development?
Sales development is the process of identifying, qualifying, and contacting potential customers (leads) 🔍
It can be part of an inbound or outbound sales strategy and sits between the sales and marketing functions of a business. Sales dev aims to warm up the leads until they are ready to make a final buying decision.
There are two key types of inbound leads:
- Marketing qualified leads (MQLs) - those who have engaged with a piece of your content but are not yet ready to talk to your sales team.
- Sales qualified leads (SQLs) - those who have explicitly said they’re interested in buying your product and are ready to talk to your sales team.
Sales development representatives (SDRs) are vital in driving the final purchase decisions. They contact prospects using B2B channels like phone calls, emails, and LinkedIn.
The outreach that the SDRs do is either from inbound leads identified by marketing that have already engaged with you or new prospects identified through outbound sales.
Creating a sales development process
A sales dev process is vital because you’ll have prospects at different stages in the buying cycle.
Plus, much of your total addressable market (TAM) will not even realize that they have an issue 🤯
Let us explain…
Chet Holmes’ Buyers Pyramid outlines that:
- 3% are interested in “buying now”
- 6-7% are “open to it”
- 30% are “not thinking about it”
- 30% “don’t think they’re interested”
- 30% “know they’re not interested”
So, if SDRs are only focusing on the prospects who are “buying now” and booking meetings with them, this limits you to a very narrow segment. The winning zone is the 30% who are “not thinking about it”.
Ryan Reisert, Subject Matter Expert at Cognism, explains more in the clip below 🎬
Although sales reps often have ambitious quotas to hit, it’s important that you don’t forget the buyer. A good sales development process is about being buyer-centric and delivering a great customer journey.
David Bentham, Director of Sales Development at Cognism, explains more:
“It’s easy for SDRs to forget about the buyer.
They concentrate on targets and meetings but responsibility doesn’t fall just on them.
Managers can make SDRs more buyer-centric by aligning their goals with those of the prospect. Maybe add an element of compensation. So that they focus on a customer journey that will result in revenue later.”
There are seven steps to the outbound sales cycle; they include 👇
Sales development comes in at the start of the process and consists of three steps:
Let’s talk about each step in more detail.
Before we get into prospecting, let’s define a prospect. In short, it’s your prospective customer. They match your ideal customer profile (ICP) and are someone who may be responsible for making the buying decision for your solution.
There are three types of prospects:
- Marketing prospects. These people could become leads. They haven’t shown a direct interest but may have performed a marketing lead generation activity like filling out a form to access a piece of content.
- Sales prospects. These people have already become leads because they’ve shown an intention to buy. They’re lower in the sales funnel and are open to speaking with sales reps.
- Cold prospects. Let’s not forget the winning zone in Chet Holmes’ Buyer's Pyramid. Although they haven’t taken action yet, these people are good prospects for your solution. They need nurturing by sales development.
Prospecting is the one-to-one activity that SDRs perform. With it, they identify prospects and engage them to decide whether or not they should be moved further down the sales funnel.
Prospecting activity is a shorter-term approach that aims to find ideal prospects and establish a relationship with them 🤝
The reps can use sales intelligence, prospecting tools, and LinkedIn to help them find the right contacts. Prospecting tools save sales development representatives’ time and make outreach easier.
Time to engage your prospect. Sales outreach is either:
- Engaging potential customers identified through prospecting.
- Reaching out to leads that have gone cold.
The aim is simple. Convert prospects into paying customers 💰💰💰
To be successful, you need a sales cadence and an understanding of buyer personas to target the right person in initial outreach.
In B2B, the core buyer persona types include:
- End users: The people who will use the product or service.
- Decision-makers: Final decider of the buying decision.
- Stakeholders: Part of the leading team with a final word in top-level decisions.
- Influencers: Internal people who influence the buying decision.
- Subject matter experts: Often a consultant with expertise in the product or service.
- Procurement: Part of the purchasing team that deals with vendors.
Sales reps target decision-makers. In their sales outreach, they use a combination of outbound sales calls (aka cold calls), cold emails, and LinkedIn. These channels all form part of the outreach sequence to get the initial meeting with the prospect booked.
It’s not easy. SDRs are often met with objections and rejections during this part of sales dev (more on that later). But being persistent is essential.
Leads that are qualified match your ICP. They’re also aware they have a problem, know you may have the solution and are in a position to buy right now.
These leads are ready to pass onto an account executive (AE) to be pushed further down the sales cycle.
The better an SDR can qualify, the higher quality leads they will pass to the AE. Which will ultimately lead to a higher conversion rate.
So how can you effectively qualify? Well, there are several sales methodologies 💡
One of the most popular is BANT.
- Budget: Do they have the money to spend?
- Authority: Are you speaking to the decision-maker?
- Need: Is the prospect aware of their pain or need?
- Timing: Do you know a timeframe for when they will need the solution?
Lead qualification helps to validate that the prospect is worth investing time in. Discovery questions are vital to get all the information you need. And it’s good for sales development reps to learn this early in their career.
Joel Matthews, Account Executive at Cognism, says:
“Developing a mind for qualification is something I really wish I’d learned as an SDR.”
Hiring sales development reps
Reps are fundamental for any outbound sales team.
You can build a team internally by hiring or outsourcing to specialist agencies. In B2B, it makes sense to build a sales team internally in the long term.
The benefits of an internal sales team include:
- More control over sales processes.
- Complete transparency over metrics.
- A predictable monthly cost.
- The chance to become a reputable employer.
- Working with people who grow and develop with your business.
Before you hire that first SDR, you need the right culture. Anders Holmberg, VP of Sales & Customer Success at Depict, says:
“It starts with the founder and the company’s culture.
It’s hard to create an outbound team if there’s no sales culture in the company from the get-go.
What you have to do is create an atmosphere where you’re working with a proactive mindset, rather than a reactive mindset. If the company’s strategy up to that point is to sit and wait for inbounds, then changing that mindset requires more work than many sales leaders realize.”
The SDR hiring process
Investment in the hiring process is crucial for recruiting the best talent and scaling.
Gabrielle Blackwell, SDR Manager at Airtable, says that sales leaders need to ask themselves questions like:
- Who do we need to hire?
- What does the hiring profile look like?
“Understanding internally the people you need to work with will help develop a process to get the right people in seats.”
GetAccept’s hiring process includes the following elements:
- Internal recruitment team.
- Data approach to hiring.
- Case interview (the candidate solves a business problem).
- Quick contract management process.
Samir Smajic, Co-founder and CEO at GetAccept, says that this helps them to hire good reps.
“You need to hire slowly, even when scaling. The adverse effects of hiring the wrong people are felt for months, especially in times of economic uncertainty.”
David Bentham, Director of Sales Development at Cognism, explains more in this clip 🎬
Traits of a great sales rep
Top performing SDRs aren’t always easy to come by. Particularly if you’re new to the game.
But there are several traits that most sales leaders look out for:
- Inquisitive nature. They care about understanding what the prospect needs and how their peers work.
- A good listener. Active listening is a sales skill that reps need to have. If they’re already good at listening, developing this is more straightforward.
- Coachable. SDRs need to be able to take on and implement feedback. Otherwise, they’ll never be able to improve their sales development techniques.
- Consistent work ethic. Working in sales is tough and can be repetitive. It’s essential to have organized work processes and give 100% each day.
- Competitive. Naturally, sales is a competitive industry. The best SDRs have a competitive nature but in a healthy way that boosts the team.
💡Read all about SDR career progression
Sales dev metrics
As a sales development rep, hitting your quota is crucial 💯
The key metrics start with one thing in mind: revenue.
SDR teams use KPIs to track performance and identify areas for improvement. These metrics help sales leaders know what’s working now and which areas can be adjusted.
When you know the metrics, it means you can change your sales coaching too.
There are two types of sales dev metrics:
- Input KPIs
- Output KPIs
Input metrics are a quantity measure. They track volume. For a sales rep, this could look like the number of meetings booked this month or the number of phone calls made.
Output metrics are quality measures. They include things like how many meetings it takes to close a deal or the revenue an SDR generates yearly.
Let’s look at the 6 core sales dev metrics 👇
1. Number of dials made (and outcome)
Usually, SDRs have a target for each day for the number of dials to make. But it’s important to look at outcomes alongside this metric.
For instance, if sales reps are making lots of dials but aren’t getting through, then there's an issue.
You need to consider outcomes like:
- No answer
- Voicemail left
- Meeting booked
- Disqualified out
To work out where SDRs are falling behind, look at calls where meetings are booked vs calls that connected but no meetings were booked. Use software like Gong to review calls and analyze where your reps are going wrong.
2. Number of emails sent (and outcome)
Cold emails are an important channel in the sales cadence. Sales leaders should track them similarly to how phone calls are.
You’ll also need to consider outcomes like:
- No reply
- Initial meeting scheduled
With these metrics, SDR managers will see who needs more coaching on email. They’ll also see the tactics that are working.
3. Meetings booked
Arguably one of the most critical metrics. The number of meetings booked is vital for getting leads into the pipeline.
It’s one of the core goals for reps in their outreach. As an SDR manager, it’s essential to make sure that SDRs are recording the outcome of the meeting too. Whether they were a no-show, disqualified, or have become an opportunity.
4. Cadence compliance
A sales cadence is a series of predefined touchpoints for the rep. These touchpoints are spread out over a certain number of days and use sales cadence software to notify actions or automate them completely.
Cadence compliance means that the leads are worked by reps correctly. It’s all about keeping a consistent approach and not abandoning prospects that don’t respond to the first touchpoint. SDRs might modify their cadence to suit them. But the importance of compliance remains.
5. Pipeline generated
In sales dev, this is the number of dollars generated in pipeline by SDRs 💰💰💰
It’s calculated over a certain period, often on a monthly, quarterly, and yearly basis. So for example:
- 100 leads generated in a month.
- 10 turn into opportunities.
- Each is valued at $5,000.
- Equals $50,000 in pipeline.
Ah, revenue - a sales leader's favorite word! How can you track the revenue generated by sales reps?
Look at the closed-won business from the meetings booked by each SDR.
So if from the $50,000 in pipeline generated, 4 become closed-won and 6 become closed-lost, your SDR will generate $20,000 in revenue.
Tracking this metric shows why further investment in the SDR team is justified.
In a nutshell
Sales development is the process of identifying, qualifying, and contacting potential customers 🥜
It’s vital for nurturing prospects at different stages in the sales cycle. Remember, the Chet Holmes’ Buyers Pyramid says that 30% are “not thinking about it”, but this is the winning zone for sales.
Sales dev warms these leads up, until they’re ready to make a buying decision. And it’s the core responsibility of sales development representatives (SDRs) to encourage them through the pipeline.
Most sales leaders agree top SDRs possess the following qualities:
- Inquisitive nature.
- A good listener.
- Consistent work ethic.
A rep’s success can be tracked through 6 core sales dev metrics. These include meetings booked, pipeline generated, and calls made (plus the outcomes).