How do you best manage BDRs and SDRs?
Conversational short-form marketing strategies, frameworks, and tactical advice to help early-stage B2B software (SaaS) companies on their journeys from MVP to PMF and beyond. Hosted by Brian Graf, CEO at Kalungi, and Stijn Hendrikse, Co-Founder at Kalungi, serial CMO for B2B SaaS companies and ex-Microsoft Global Marketing Leader.
Mike:
Welcome to episode 28 of B2B SaaS Marketing Snacks. Today, we are talking about BDRs and SDRs and their roles in growing marketing organizations. If you're not familiar with the terms or the acronyms, BDR stands for business development representative and SDR stands for sales development representative. BDRs tend to be more on the outbound prospecting side of things. If you think about Stijn's analogy in the book, they would be the hunters so to speak and the SDRs tend to be the gatherers. So they handle the inbound traffic, the people who are coming in hot to your website, raising their hands, saying they want to speak to sales. SDR will do the qualification and they kind of start the sales process and eventually move them onto more senior sales person to kind of handle things.
And so today we talk a lot about what they should be responsible for and who they should report to. Is it sales or is it marketing? We talk about the metrics they should be used to manage their performance. And if the BDR function can be outsourced and if you're going to outsource it, the things that you need to have in place. And then lastly, what you can do to set your BDR up for success and ultimately your BDR team as a whole. Let's get into it.
Okay. Maybe we can just start by - I can ask you, how do you see the BDR role fitting into a marketing organization? We talk a lot about building your marketing foundation and your go to market but we haven't talked a lot about how BDRs and SDRs fit into that equation. Now there's some conversation about who should manage them. Should it be the marketing team or the sales team? And I'd love to get your thoughts on just how you see that role fitting into everything.
Stijn:
Yeah. It is some of these functions that sits between marketing and sales and it can... There's many reasons to manage it on either side of that fence or to manage it together even. First of all, there's a ton of acronyms out there, that can get very confusing. It's actually one of our best performing blogs on the website, Mike, just to explain how to think about these terms, SDR BDR. And there are other terms like inside sales rep or sales desk team member or sales intern, right? There's so many order terms that SDR, sales development rep and BDR, business development rep. Those by the way, are very confusing in themselves because in most companies, SDR, sales development rep, is actually used for a role that's not as sales focused. That's often more about following up on inbound leads that come in, people filling out a form on the website.
And then SDRs are typically the more junior sales resource who follow up with those inquiries. So there's not really a lot of selling going on. It's mostly a low friction enablement of someone who's already indicated a need, they're problem aware, they filled out a form on your website and they just want to get help to either buy your product or get a demo. So sales development rep might not be the right term for that, but it's what's used most of the time. And then the BDR, business development rep, is actually often used for a sales like role, where there is more active selling involved. BDRs are typically more trained, more experienced than SDRs and they're able to do objection handling, to seek for pain, to do solution selling, all at a relatively transactional mechanical level still. Following scripts, following guides and doing outbound calls and prospecting.
So they're not account executives by any means who do real advanced solution selling and there's this opportunity, check what we do. and do we want to win this? Can we win this? Et cetera. That's later in the funnel. So BDRs don't do that, but they're definitely more of a sales resource even while the acronym says BDR, business development. So that SDR, BDR, why is it flipped like that? I think Salesforce, at some point started to use the terms like this. SDRs were more there in R, I think. I don't think it changed. They're junior sales academy people straight out of college who learn to do sales by following up on inbound leads. And as they get better at that, they become BDRs, which is a more advanced, higher paid role. However, more sales skills are being showcased.
Mike:
Mhm (affirmative).
Stijn:
Let me stop there. That's a sort of a quick intro to the topic and it's a deep topic as we go into, what does it mean for marketing? Et cetera.
Mike:
Yeah. And so I guess the biggest question that I think comes from that is because there's a lot of overlap between... I can see BDRs and SDRs fitting both into sales and marketing, the kind of crossover between the two of them. And I have seen SDRs and BDRs report to the marketing function and the sales function in different instances. What do you think is the... Do you have any opinions on who they should report to? Or kind of how that should work?
Stijn:
Yeah. I have a lot of opinions. It starts with who is responsible for creating the revenue value of your pipeline in your company. If marketing owns most of that pipeline generation, then they often want to do both inbound marketing, where you need the SDRs to follow up on those leads. And by the way, side note, speed is incredibly important when you think of inbound. When someone is shopping around, someone is actively searching for a solution. They're typing in their query into Google and they fill out a form. Chances are, they're also filling out a form on another website of your competitor, right? They typically get a couple of search results, and they may actually, especially if they're in need, they may fill out a form with your competitor as well. And then whether the SDR actually gets back to them within minutes versus within hours, it actually really, really matters.
It's not just, conversion rates go up. Conversion rates are kind of binary at that point because the prospect might only want to do a demo, have a conversation with one company at a time. So if your SDR follows up within a couple of minutes and your competitor in a couple of hours, then the competitor might not even get the call, right. So just a side note, speed, speed, speed, and minutes versus hours is really... It's not just about within a day. I think that... Often people think, "Hey. If our SDRs get back to it in 24 hours, that's fine." No, not fine. Yeah.
Mike:
I've heard stories where people have actually just removed a solution from their list of consideration because someone else followed up faster.
Stijn:
Yeah.
Mike:
Because when somebody is looking, they're ready to move. They want to move right now and they're usually... They want to implement it as soon as possible. So if you can be the first to respond and get them through that process. The better for sure.
Stijn:
Yeah. And the more mature the category, the more important this becomes, right? Because there will be multiple solutions available, multiple vendors. The customer, the prospect, is already able to educate themselves pretty well. So they're at the point... They're much closer to the buying moment in the pipeline than in a less mature market. So anyways, speed is super-important.
So if marketing owns the funnel, the revenue of the generation of the funnel, they will own inbound, and they will care about having SDRs and controlling them so that that follow up happens fast. But they also maybe want to do outbound, right and outbound... Not to be confused with ABM, account based marketing. So account based marketing is about a very targeted effort to market to known accounts and people within those accounts that fit your ICP.
And what we do at Kalungi, that is often an out - We use outbound mechanics to go after those identified accounts, because a lot of our customers are in early stage growth and they're creating a category. So a lot of those ideal customers don't necessarily know about the problem that we're solving right at our customers. So we do a lot of outbound, but outbound and account-based marketing are different things. We often combine them, but you can do account based marketing in a completely inbound world as well. So I want to separate those.
But let's say you were the marketing leader and you want to do outbound. Then having control over those outbound resources, the BDR team, who's going to do the outbound emailing, social media outreach, calling sometimes, or even outbound at an event, right. Trying to find your ideal customer prospects where they are. That marketing wants to own that if they're held accountable for pipeline growth.
But there are a lot of companies where the pipeline accountability is spread out a little more evenly and where the marketing leader only owns for example, inbound. And there is a separate executive, maybe the sales leader who owns the sort of outbound prospecting part and they manage the BDR team. And there's nothing wrong with that, especially when you think of the BDRs as being your early stage talent development pool for account executives, then for that team to be owned by your sales leader is fine. I actually think that the SDR, BDR academy... Let's call it, that you could invest in as a company, is a great way to develop both sales talent, but also customer success managers potentially.
SDRs who do not maybe have a knack for proactive, outbound prospecting and doing maybe a little more of an aggressive sales conversation might be your ideal customer success manager candidates. So it's a great way to develop talent and in even things like partner managers or other roles in the marketing team could be fed from this team. So yeah, they can be managed by sales, by marketing depends totally on who owns the number that they're trying to contribute to.
Mike:
And in terms of holding a BDR team accountable for results, what are the kind of metrics that you look at? I know obviously you have the downstream, you have pipeline and new deals created and MQLs and things like that, but there's a lot of companies that try to systematize a BDR team. I've definitely had scenarios where clients are... They lean towards the direction of wanting to build out a large BDR team and kind of goal them on number of dials, number of emails, number of people they've reached out to. So I know that that's one way of doing it, but I'm wondering if you have any thoughts on how you would manage your BDR team in terms of results, weekly cadence, check-ins performance, reviews? Et cetera.
Stijn:
I'm going to insult a couple of people here, Mike. And I'm going to insult myself because I was sales leader at some point at Microsoft in the Netherlands, and I'm pretty lazy. And a lot of salespeople, I've discovered, are also very lazy. The best ones are the laziest. If you know that and you know that even when you hire relatively junior SDRs, BDRs, that the ones who are maybe seeking the path of least resistance are the ones who might be actually the most suited to do this job long-term because they're going to be really sharp and smart in how to get to the results you have at the least friction, right? With the least amount of effort.
Mike:
Sure. Fewest clicks.
Stijn:
Yeah. And that's what you want, that's actually where your best salespeople often come from, with that type of DNA. So that means that when you manage a team like that, you need to be aware that managing activities on a relatively short timeframe... Daily calls, meetings scheduled, emails sent out are actually helpful metrics to especially get relatively young junior resources in these roles to set them up for success, because it's not something they're going to do by themselves. It's a little bit of... It's where you, as a manager can help them the most to drive some of the discipline, a daily schedule like I set apart a couple of hours in the morning to do research, then I do a couple of hours in the morning to send out emails then…
And ideally of course they learn what are the times of the day that are most effective to do that in your category and depending on what category you're in, whether it's making phone calls, reaching out over social media. What days of the week are most effective to do some of those things. But holding them accountable at the activity level earlier in the funnel, I think is very helpful with these more junior sales resources.
Of course, you want revenue contribution, but it's going to be so hard for them to immediately impact that. That's sort of managing, even how often do they log into your CRM system? How many notes do they make into the CRM system? There's some fantastic tools these days to help you manage a lot of those things. Things like Gong where you get sales call analytics, and you can coach people, and these types of software gets so sophisticated now that it can listen for the use of certain words. How much is the salesperson talking versus the prospect? So I would go to a lot of those technical metrics, some provided by these tools to manage the team Mike. Speed a follow-up for SDRs is another one.
Mike:
Yeah. Absolutely. So there're some things in marketing that you can outsource, I think, right? Especially when you're just getting started, you can kind of get away with filling in the gaps a little bit here and there with design or paid search if you're just getting started. Eventually you want to bring those things in house if you're building a full team, as you're scaling out. How do you think about out scale or outsourcing a BDR or function? Does that work? Is that something that you've seen in the past?
Stijn:
It's really interesting for us as Kalungi to come across this situation because of course our clients have felt comfortable to outsource their marketing function to us, where we take accountability for marketing results. For sales, it's a little harder, actually. I think some of the... At the surface, a lot of the same challenges are there that you have at marketing agencies, right? Can you see results early enough to warrant the ROI so that's visible? And with Kalungi, we do a lot of work to make that tangible through OKRs and signing up for outcomes like MQL and lead volume.
For sales, it's harder to find agencies to do that. Most agencies that do outsourced sales support, BDR prospecting, also ask you to commit for six months, for a year. That's often a red flag or yellow flag at least like, "Hey. Why do I need to... Why can't they just prove in a couple of months that it's good ROI and then I can just renew?" It's like Zoominfo. All these list building tools that they went to sign up for a year. Why is that? Because probably after two or three months, you'll find out that you don't need it as much as you thought. So with outsourced sales, it's a little similar. So you got to be really clear on what you're trying to outsource.
In the case of outsourced prospecting or sales work, outbound sales activities, it is one of the following or a combination. You outsource the recruiting of great sales people, it's hard to find good salespeople. The best salespeople are not going to be available on the market right? They get paid the most money by your competitors. And it's going to be very hard to actually recruit good sales people. They're usually not available. If salespeople are looking for a job, there's a reason for that. And so that's one. Can you outsource the recruiting of good salespeople? There are agencies out there that do a really good job at this. They then make it their superpower to go into colleges, universities, to really find early stage sales talent and develop those. So that's the second thing, you’ve then outsourced the training part of training good SDRs, BDRs.
A lot of these skills are transferable between all the different industries that B2B SaaS companies target. So I think outsourcing the recruiting and training, and then the initial coaching of junior sales talent is a very solid option. Then when it comes to managing them ongoing and holding a sales team like that accountable for results, that gets a little trickier. I think it's good to outsource it if you don't know exactly how much capacity you need or you're testing a certain new segment or a new market so you're not ready to commit to full-time hires. But the moment you are when you know, "Hey. I do need this BDR function for the longterm or SDR." I don't believe there are really great outsourced options. I've tried a couple.
Mike:
Mm-hmm (affirmative).
Stijn:
We've not had much success with them. Some of them do the marketing side really well, the outbound emailing and the communication but that's not really what we're talking about here. We're talking about the actual individual, the people to do to follow up on the sales calls. I've not seen that really being outsourced very well. Because I think when you have really good talent that some of these agencies would hire and develop. Those, because they're lazy salespeople, they want to optimize their own earnings. So the moment they get some form of success they're out of there and they apply for jobs with the companies where they can make the most commission. And of course, that's always going to be better if they work direct for these companies, because then there's no agency roaming off 10, 20, 30% of that.
Mike:
I also imagine that there's a lot to be said about it. If you're not internal, you don't get a really great understanding of the product and really learn the customers and understand the use cases and the pains and things like that. And I think that so much of that, the sales process is predicated on truly understanding it and having those conversations with customers. Seeing how they use the product, seeing where they struggle and being a part of the marketing customer success product ecosystem, or I just don't think... I mean, I'm skeptical of outsourcing a BDR for that reason, unless you have a really good playbook. Not one that's, "Here's our messaging framework." Build a couple of emails, but almost if you have a very clear checklist of things that they could do when they're prospecting...
Sorry, this is a little bit tangential, but for example, I get a lot of cold emails. I'm sure you do too. I'd say 95% of them feel like templated emails where it's just regurgitating things and I can tell that somebody just kind of copied off of a messaging framework or something that was canned for them.
There are a couple that really stand out and those are the ones where they actually add value. And they show me something that is not necessarily their product, but they teach me something. So here's an example. Someone reached out to me last week, they're a podcast agency. The founder... It didn't need to be the founder. It could have been anybody, but he sent me an email and in the email was a three-minute Loom video. And he clicked through our profile on Spotify and went through a few things and pointed out specific areas where we can be doing better. He's giving me learnings, things that I can take away right now and then on top of that, he's then saying, "I have a few more. Take a call with me and I'm happy to share those with you." And the service obviously is a podcast growth agency.
So that was one where I really felt like... I remember that one and... He lives rent-free in my head right now. And I don't think that you can do an outsourced BDR function, unless you can give somebody a very specific set of things to go click through, and they really understand the dynamics of how the product could add value to somebody, and you give value first. And I just don't know if you can do that with someone who isn't internal, if that makes... I almost see it as like... It's kind of like content marketing when you outsource content. I think there's a lot of content agencies that will give you very generic things that are geared more towards SEO than actually adding value. So you have to be careful about that one and I see this in a similar vein.
Stijn:
That's the ultimate goal, Mike. To find a BDR who can live inside your head.
Mike:
There you go.
Stijn:
You're right. I think with marketing, there are a lot of one-off tasks that need to be done for a company so outsourcing that makes a ton of sense. But with a BDR, especially when you want someone to become maybe your best account executive over time, building up domain knowledge, understanding your customer sort of segment and learning to speak their language is invaluable, right? Yeah. As soon as you outsource some of that, you'll get more of a vanilla approach. And sometimes that's fine. If you just need a quick blitz, you need capacity, your leads are not being followed up at all. And you need just some people to make sure that that happens. You hit those SDR response times, then it might be good to outsource it.
Mike:
Sure.
Stijn:
But also find agencies who will do pay for performance, I've not found any in the world of BDR or sales outsourcing because... It's just like with marketing agencies, right? It's hard to control all the variables. Do they control if you have product market fit or not, right. If the segment you're in is... How much is that segment? How easy is it to sell if there's a competition? But for marketing, if you actually control some of those things like positioning, we do sign up for results but for sales, it's much harder.
I believe that the content marketing analogy that you make is good. It's funny, you see now, there are reverse... Like a reverse of the Google search engine, there are content marketing tools that allow you to just put in a couple of keywords and the tool will generate the content, right? And with artificial intelligence and the quality of that is actually getting better and better really, really fast. So I can imagine that tools like Gong and other tools who do sales conversation, coaching, and use AI, artificial intelligence to analyze those calls. Soon, we'll maybe be ready to have a robots version of a BDR and SDR. And those will be fine maybe to do some quick followup, to just allow someone who's not able to get the answers to their questions. And to do it more like a chat bot almost, a BDR, SDR in the chat bot type of format. Some prospects actually might prefer that over a human being.
Mike:
Yeah. Sure.
Stijn:
But that can only be one part of your mix. You need those individuals, the real people who learn your category, understand you, who can do the research that you mention and to be very thoughtful in their outreach. Yeah, and that's a very different job.
Mike:
Yeah. Anything else that you wanted to add on BDRs, SDRs?
Stijn:
It's all about good talent development. We talk about a lot when we have our sales manage young marketing teams about situational leadership. By using the right leadership style to manage people who are doing something for the first time. S1, S2 for people who are doing a task for the first time and need a lot of instruction. And handholding versus delegating to team members who are very confident and capable of doing a certain task. That is extremely applicable for a young SDR, BDR team. And I always like to coach... When I have to function in my marketing organization, to coach to the team with very specific instructions with a BDR playbook that has voicemail scripts, cold guides, objection handling sheets, all those things. And it's cool, if you do this from the marketing perspective, it really allows you to do a lot of message testing to confirm your positioning, to learn from that, to see what works when your BDRs and SDRs have these conversations. What is the messaging that maybe is not that helpful and use that also to improve your messaging framework. Maybe that’s kind of a final thought.
Be very aware of the type of management style, leadership style you use with junior resources. Be ready to give them a lot of tools, implement templates and learn from those also by testing your marketing assets and lead magnets.
Mike:
Yeah.
Stijn:
You should invest in an SDR, BDR team. Maybe it's the last comment. Because it's a great way to develop good talent for your full commercial organization.