The Math Needed to Justify a BDR or SDR Sales Team

There are multiple factors as it relates to a team aside from pipeline generation and growth when it comes to discussing your BDR and SDR team revenue contributions.

First, it’s a myth that SDR and BDR teams only create pipeline generation. They contribute real revenue by doing the dirtiest, hardest, and, oftentimes, most overlooked role in the entire sales process.

When someone gets stuck on the pipeline creation at the sales executive and management level, it’s like someone in marketing shouting about their open rates for emails. It also smells like someone is trying to avoid accountability on the closing side.

Pipeline generation and growth by SDR teams is just the beginning. What needs to really be measured is pipeline conversions, not generation.

Here is the explanation on how to “justify” the BDR team:

1. Sales Cycle – Need to put this into the calculations
2. ARR – Need to put this into the sales cycle
3. LTV – ABSOLUTE MUST HAVE when defining value
  1. If your ARR, is $35,000, your LTV is $105,000 (assuming 3 year LTV, can be higher)
  2. All costs MUST be viewed under the LTV, not the ARR
  3. Literally (ok, figuratively), this is a non-starter of CFO’s and financial teams do not want to view things this way.
4. SDR – True costs of Lead Conversion Timeline
  1. Specifically from the moment of…
    1. 1st SDR touch to meeting set
    2. 1st SDR touch to stop calling (13 touches)
    3. SDR Research time per touch
  2. Salary of BDR team (include all-in costs, engagment platforms, data sources, computers, training, ramp time, etc.)
5. AE Comparison
  1. Take the same timeline from SDR activity and apply to AE vs. AE Salary
  2. Also take the timeline from SDRs and deduct that time from 45 hours (assuming that is how much time they work weekly)
  3. Guaranteed Attrition
    1. Now, associate that time lost to what other proactive revenue activities an AE should be doing with their current pipeline or their own Top Tier accounts
    2. How many deals could be lost based on having AEs do prospecting?
    3. Remember, that’s an LTV value, not just ARR
    4. Then, associate 1.5-2x of that LTV, because that lost logo is now not able to be a referenceable customer, case study, webinar guest, etc.

AND THEN…

Someone needs to do a deep dive on the closing side of the revenue team. Because it’s not about the meetings set, it’s about those that are attended, and, furthermore, what happens in each of those meetings to convert.

1. AE conversion rate from handoff to first meeting attended
2. Define your no-show process (whether AE or SDR) – Check out our post on how to reduce and reschedule no-shows here.
  1. 7 attempts to reschedule?
    1. 2 Email
    2. 3 Phone
    3. 2 LI
    4. or 1 LI and 1 Text
3. Additional Management and AE Accountability
  1. Number of calls PER WEEK a sales manager is doing ride alongs (2/rep weekly is minimum)
  2. Are managers spending time with A & B players to improve conversion?
  3. Are managers NOT spending time coaching C players on training because they probably have a more personal issue affecting performance?
  4. Specific training topics discussed each week in weekly sales meetings
4. Feedback Loop
  1. What is being gathered and shared appropriately with the sales development team, marketing, product marketing, etc.?

This is how you build out your justification and accountability for all things through the top of the funnel.

If you need help justifying a SDR or BDR team, contact us here.

For more in-depth sales training that will help grow revenue through proven qualification, discovery, and prospecting tactics, check out our 4 Week N.E.A.T. Selling™ Training & Reinforcement Program here or our self-paced individual and team trainings here.