How 1000+ Companies Build and Execute Successful Sales Development Teams
Sales development is a tough role but it’s an important role and one of the most innovative roles to emerge from sales in the last decade. The problem is, the research has been weak and so has the best practices.
That ends today.
XANT in partnership with a half-dozen companies have produced the largest study ever on sales development. The study focuses on Structure, Systems, People, and Pipeline.
State of Sales Development shows, in great detail, what people are doing in their sales development organization to be successful – it analyzes structure, tools, pipeline and people of over 1,000 companies. It is the largest study of its kind, and I think it revealed some pretty interesting details.
A thousand companies all participating to figure out how we can better build and execute successful sales develop teams – that is amazing!
Sales Development Teams Structure
At the moment we believe there’s about 5.7 million professional sales in the U.S.. Of that 5,7 million, 2.7 million are inside sales reps. Of that 2.7 million, 611,000, nearly 612,000 are sales development reps.
If you just look at the United States, sales development reps make up about 10.7% of all sales reps in the United States.
Sales Models: Account-Based vs High Velocity
The interesting thing was that a little over 89% of companies say that they ran an account based model. The problem with that is, we believe over 46% of these companies are potentially running the wrong sales model.
Some Companies Might Run A Wrong Sales Model
Now, why do I say that? We looked at a couple different variables, one being deal size. If you have a smaller deal size ($5,000 or $10,000), you ought to be thinking about running a high velocity model.
It’s a shorter sales cycle, and we typically would push people in that direction. Interestingly enough, the study found that 38% of companies who have small deal sizes believe they’re running an account based model.
Again, this is not necessarily wrong. It’s just that they are potentially moving in the wrong direction. It’s something you maybe ought to consider if you’re running a small deal size, if you’ve got a shorter sales cycle, and only one or two decisions makers for every deal.
You might want to transition to from an account based model, as you’ve got a large market to potentially attack. Companies with larger deal sizes were mostly running an account-based model, so that’s also something to consider.
Sales Tools With The Highest Adoption
Now, when we look at which tools had the highest adoption, we can see things changing in the sales industry. Here’s a list of the top 5 sales tools used by sales development reps today:
- Social prospecting
- Data list services
- Email engagement
- Phone calls
- Sales cadence
Interestingly, sales cadence tools are mentioned for the first time in this type of study. Sales cadence tools combine phone and email and other methods to help sales reps structure and schedule their sales activities according to a winning sequence. It will be interesting to see how cadence tracks going forward.
Sales Tools With Strong Growth In 2018
It was interesting also to see which tools are expected to grow as we move into 2018.
The number one tool expected to grow was gamification. Gamification has been around a long time. A lot of people have had time finding the ROI of gamification, and so that slowed some of the growth. Number two on expected growth was video, followed by sales coaching.
The last tool in our top five was direct mail. We’re seeing a big push in direct mailer as far as growth is concerned, as the market continues to mature.
Sales Development Reps Compensation
Just at a high level, companies report paying sales development reps a base salary on average of $43,499 with an OTE at 83 484. Now, there’s going to be a lot of variables that affect that, certainly location would be one of them. Another variable is the type of sales development rep – inbound or outbound.
Average quota attainment is fairly high, a 63.5% quota attainment reported by companies on sales development. Depending on the study you look at, CSO Insights, that’s going to be different than account executives. CSO Insights reports account executives are at about 53 quota attainment.
We see that number being slightly different, but depending on the benchmark you use, potentially decently high which is good for the industry that the companies are seeing people perform well in it.
Revenue Numbers As Variable Compensation
One of the big surprises on compensation was in the variables. A lot of studies on sales development previous to this showed that accepted opportunities or opportunities and appointments is the predominant measures of compensation, when it comes to variable compensation.
In this study however, we had some companies report that they are using revenue to measure results of SDRs. That was the number one factor that was utilized in the variable portion of sales development reps, and I am surprised about that.
I’m a believer that variable compensation should connect to metrics that you feel you can own, that you can actively influence. Sales development representatives have an influence on revenue, but it’s an indirect one and not as much as the account executives.
Why SDRs Need To Play Well Together With Account Executives
The study analyzed some data on companies’ pipelines as well, and there was one finding that we found significant for the industry. The relationship between sales development and account executives has an influence on pipeline numbers.
Quota attainment went almost 10% up if you met daily as a sales development rep with your account executive. In addition, appointments held were 17% higher for reps who had good communication with account executives.
When communication is there, we see good things happening in the industry, so let’s all work on that.
If you’re looking to see the results of the State of Sales Development study, you can get the executive summary here.
In This Episode You’ll Learn:
– What is sales development
– How 1000+ companies are building and executing successful sales development teams
– The structure, systems, people, and pipeline of successful sales development teams
Links and Resources Mentioned in This Episode:
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- Xant Team