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Welcome back to another episode of sales transformation brought to you by Ledium. In this episode, Colin is joined one more time by Ronan Peser to discuss how to build your SDR team. Ronan shares valuable insights on the financial considerations, talent assessment, and hiring strategies for building a successful sales development team. Colin, back to you.
Collin Mitchell:Alright. Welcome back to another episode of sales transformation brought to you by Ledium. I'm your host, Colin Mitchell, and we've got Ronen Pazar back on the show. Ronen, you wanna give people just a quick introduction and before we jump into a topic that I know you love talking about.
Ronen Pessar:Thanks, Colin. Great to be back. Ronen Pesar here. I do fractional sales development, meaning I build out your SDR team for you or help you optimize it. Cold call training, but also leadership development training.
Ronen Pessar:That's me.
Collin Mitchell:Short and sweet. Love it. Love it. We had run-in on recently, and we talked about a lot of great things about, lots of nuggets for first time leaders, that or even leaders that maybe have, you know, been around a while and are looking to improve culture. Lots of good nuggets in there of just sort of some things that you can do to have a better culture, as a leader, that really do impact results, especially for sales teams.
Collin Mitchell:And I can tell you a lot of the bad behaviors and, you know, the things that we talked about are pretty much kind of the norm for a lot of sales team environments. But today, we're gonna talk about, you know, how to build your SDR team, which is something that I know you're passionate about. Let's just talk about, you know, maybe for a first time leader or newer leader, what are some things that they need to be thinking about when they're maybe building a team for the first time?
Ronen Pessar:Yeah. This is something I'm passionate about because it it has so many moving parts. Get a few of them right, and you can see, like, wild success. But get a few of them wrong, and it's like, what did I do wrong? Why doesn't this work?
Ronen Pessar:I think when it comes to making this a little bit more specific, there there's 2 typical kinds of clients that I work with. So that helps paint the backdrop for, like, who this is for. The first one is the growing VC backed tech company, like the start up series a, series b. This is the kind of company that has already identified product market fit, and now they're looking to add another channel or 2 to increase their pipeline and then their revenue. Really typical strategy, by no means is it going away anytime soon.
Ronen Pessar:The second use case and kind of client that I work with is, typically a bootstrapped or already profitable organization that is now exploring new pipeline channels, and they have never done traditional sales development or outbound. So they already have maybe 15, 20 years, 10 years, something, but a a good chunk of time operating in their market. And they are profitable. They have a large organization, resources. I have a client just like that, a value added reseller in the hardware space.
Ronen Pessar:They they've been around for a while, and now they're just looking to add another layer on top of their go to market strategy. Either way, there's one thing that's true. Sales development is newer to them. When you're thinking about it, you gotta think big picture. So there's the finances of it.
Ronen Pessar:Do the numbers make sense? Then there's the talent component. Who are the people that make sense? Ultimately, marrying the 2 is gonna be the job of someone like myself. I call myself an integrator because I'm putting these two things together.
Ronen Pessar:And when it comes to the actual numbers, it's pretty straightforward. What you wanna look for is, do I know already what my back of napkin funnel looks like? What is the value of a new conversation? And if you can have that number figured out, you can model out a whole lot of things that you can then go test with a team. I can test if I know that the value of every new conversation to my company's revenue could be 15 or $20,000.
Ronen Pessar:Then I know if I go find a way to create another 100 of these I should be able to project out that pipeline. On the talent side, this is usually where people struggle because it's really hard to assess the right talent fit. But this comes back to the heart, the DNA, and the blood of the company. Like, what makes someone let's take Leadium. What makes someone at Leadium a Leadium person?
Ronen Pessar:What is gonna lead to someone's promotion at Leadium? There's gonna be something different there than what leads to someone's promotion at a company like Salesforce. They have different codes of conduct. What is considered good, bad? What's considered praiseworthy, promotion worthy, and fire worthy or, you know, discipline worthy?
Ronen Pessar:So those are the 2 big picture 10,000 foot view of, like, how I think about it before I get into, like, the details of it all.
Collin Mitchell:Yeah. Yeah. Well, I think the interesting thing is the first piece there. Right? Like, the the math, even the back of the napkin math, it always shocks me at how misinformed people are about their own sales map.
Collin Mitchell:Like, sometimes you talk to leaders, and they literally have no idea of the value of conversation or, you know, you start asking questions about certain sales conversions, and you get kind of a range or a around 20% to 30%. It's like understanding these numbers is kinda table stakes if you're a sales leader. Like, you have to know these things. Right? And and maybe, you know, it's a smaller company, and it's like you got founder kinda playing that sales leader role.
Collin Mitchell:Right? So that's understandable maybe. But even then, like, these things need to known. Right? So what are some things let's talk a little bit.
Collin Mitchell:I wanna dig into that a little bit. Like, what are some things that they need to look at inside of their organization to understand that back of the napkin sales math to be able to figure out, like, is this a viable option for us to go down building an SDR team?
Ronen Pessar:So, I'm always a little bit surprised like you when I'm speaking with really successful business people who know how important finance is. And finance is the language of business. Right? So they understand that, yet they don't have the language of sales down. It's just a sub part of finance, essentially.
Ronen Pessar:It's just another form of metrics to measure. I know all the people out there who are really into analytics are gonna geek out on this, but this is the kind of stuff that I that I'll do when I'm trying to assess with a potential client like, look, does it even make sense for you to invest? This isn't a cheap thing. This is going to be a sizable investment. You've got salaries and benefits.
Ronen Pessar:That's gonna be your biggest cost. Then you've got technology. Then you've got the time investment which is so underestimated how important the time part of it is just to see this thing work out. So you've got some numbers. When you think about it, you could work backwards.
Ronen Pessar:You could say, I have a revenue goal. Let's work back from that. How many deals do I need? Do I have ways of segmenting my deal? So for those of you who aren't familiar with this, most companies have stages to their deals if it's not like a 1 or 2 call close.
Ronen Pessar:If you're selling to a large another business, b to b space, you're selling larger deals, you're likely to break them down into stages. The most common setup that I've seen has something like first call, qualified opportunity, some sort of sometimes trial period or, analysis period, some negotiation periods and legal period, and then it's a customer. That's like the very standard setup that I've seen.
Collin Mitchell:Yeah. Yeah.
Ronen Pessar:Right there, you have your first funnel.
Collin Mitchell:And then and then I think the other thing that a lot of times is overlooked is people not considering all of the numbers, which is other, you know, basic finance thing here of what the fully loaded cost of an SDR is. Right? Like, it's not just the salary. It's the tech. It's the anybody managing them.
Collin Mitchell:It's, you know, all of these other factors of, like, you know, how do we so maybe it'd be helpful to break down when you're looking at, like, Hey, how many SDRs can we afford to start with? And how do we actually have that back of the napkin math of, like, what is the fully all in cost of, you know, hiring these folks?
Ronen Pessar:The big costs in the, like, pie the biggest one is salary for the person. They need benefits and tax. When you when you're thinking about tech, I think most, tech companies have a strange belief that everything has to be software. Like, so they end up buying way too much technology, way too many tools when especially in the world of sales development, you don't need a whole lot to get going. I mean, if you really wanna scrap it and be super, like, economical about it, you don't you just need a a phone, an email, and a way to get information about people you're gonna be, like, calling and reaching out to.
Ronen Pessar:But, typically, the last thing is location. Like, where are these people gonna sit? That will matter. There's a whole, growing space of, like, second I I don't know what they're it's offshore sales development, but it's it's folks in countries that are English speakers but don't live in America, so they require less. That is growing for a reason.
Ronen Pessar:You know, the cost of it is a lot lower than the cost of a a salaried employee in San Francisco. I I think in California, the minimum salary requirement is something like $64,000. So there's that cost adds up pretty fast. In addition to that, it's also like you just said. Who's gonna support this team?
Ronen Pessar:If this team is making phone calls, where are they gonna get that data from? Is there someone internally who's gonna help them set up the process of finding a new contact, getting that number into their dialer so they can make the call? Is there someone who's gonna set up the process for checking emails so that they don't bounce, so that SDR can go ahead and send the email without having deliverability issues. That's usually something that will be, like, chalked up to a a rev ops, sales ops person, but that's a whole another role. That's more cost associated and opportunity cost.
Ronen Pessar:What else that person could be working on? Ultimately, when it's, like, all in, in the US, I usually am looking at somewhere between a $100,120,000 per SDR as the all in cost. And that's that's been from experience, different types of companies, different industries, but, typically, that's the range that it ends up hitting.
Collin Mitchell:Okay. And let's pivot a little bit here, now that I think people understand, like, hey. How do we actually look like from both sides? Does the math make sense? But then how do we pick the right people?
Collin Mitchell:Right? Because there's things I mean, one thing I'll add to that too is you got to factor in ramp time, like reasonable ramp time. Right. You can't expect somebody's gonna get in the seat in the first 30, 45 days. They're gonna be, you know, 100% of quota.
Collin Mitchell:You know, that's very unlikely. Right? So even if they're experienced, I think a lot of times people think, think, oh, they've done this before. Like, they should ramp faster, but new market, new value prop, probably even working on some hypothesis of, like, who the best target is, what the best messaging is. So definitely factor in a reasonable ramp time there.
Collin Mitchell:But then how do we get the right people on the team? Are some things that we need to look for? What are some things that we need to consider when hiring?
Ronen Pessar:So, a few quick tips for anyone doing hiring, to find good talent. First one is, you wanna play a little bit of a numbers game, which is you want the most amount of qualified candidates to be able to look at, But you don't wanna spend a ton of time with all of them because otherwise, you're gonna be, like, buried. I've I've done that. Right? Like, where I'm spending time reading through every resume, something like that.
Ronen Pessar:So here's here's one first quick hack. I'm a huge fan of using asynchronous communication in the interview process. Video. As the first stage of any interview process I'm going to run, I'm gonna have the candidate answer the typical first five questions that I would ask in an interview over video and then send it into me. There's, by the way, a company that's built around this alone, where they just help organize all that.
Ronen Pessar:And what I'm asking is the basic questions of, like, give me your your highlights reel. Tell me what you want me to know about your your history, your background. I like to know, hey. Why are you leaving your current role? Or if you're not currently employed, what's going on?
Ronen Pessar:So I asked them to answer those two things. I do like the question of, like, why this role at this company? Like, tell me a little bit more about what it what that means to you. And And that's an opportunity for them to really shine and and tell me, like, their x factor. And then, of course, I like the future oriented, like, tell me where you're heading.
Ronen Pessar:This is a indicator if anyone's listening to this and I'm interviewing you, here's the answer. It's I'm looking for you to say something that sounds like it's gonna fit in with where this role can take you. So if you say, in 3 to 5 years, I'm gonna be a top performing account executive at this company. I'm gonna be selling. Great.
Ronen Pessar:Sales development's a great start. I'm gonna be, a wildly beloved and successful sales development manager. Great. This is a wonderful role for you. Something that makes sense as a transition from this role into the next.
Collin Mitchell:Yeah. There's there's a few things I love about this, because I I've I've used a similar process in the past many times. And number 1, you're gonna weed out a lot of people that never reply. It was like, hey, they clearly don't get
Ronen Pessar:this job. Yep.
Collin Mitchell:The other thing is you now have them on camera. You can see, you know, how they conduct themselves, which is something that's important. And I I think that, the the thing that is important there is you can see the type of answers that they give you because you can see, are they just feeding me answers that they think I wanna hear? Or you know? And you can pick up on cues like, are they are they looking away when they're speaking?
Collin Mitchell:Are they making good eye contact? A little bit hard on camera, you know, rather than in person, but you can start to pick up if you think they're being truthful, for the most part. Those are things that I look for. Of course, I care what they're answering, but I'm also seeing how they're answering and what those answers are. Do they seem genuine, or do they seem like they're just great interviews or interviews, and they're, telling me exactly what I wanna hear?
Ronen Pessar:One fun thing I like to do, and I've any manager that I've had the fortune of of training and and getting into leadership, I've I've taught them this approach. I play a game where because especially in in tech companies that are growing, there's a lot of hiring, so there's even more interviewing. I play a game of, like, score the candidate. And then 3 months, 6 months into the role, see if your scoring was in line with what you thought. So I'd I'd like to play this game of, like, try to predict if this person is get where they're gonna be in their performance in 3 to 6 months.
Ronen Pessar:What that does is even though it takes time to develop that, it allows the manager to see what they missed and learn the lesson that they needed to learn. So the next time they're doing interviewing, which is almost always happening, you're able to be more aware of those pitfalls. So one thing that I learned once was for someone who is a really good interviewer. Really good. She had all the experience, on paper looked perfect.
Ronen Pessar:Kinda answered all my questions well, but I always I had this gut feeling about her that wasn't great. But for some reason, everything lined up, so I was like, I'm gonna give her the shot. Floundered, struggled, didn't show up, had to let her go like 4 months into the role. What I learned in hindsight when I reviewed my notes was to trust my intuition when something feels off. Yeah.
Ronen Pessar:I was blinded by her previous experience that looked really good from a company that was a really good company logo. I was so blinded by that that I was willing to ignore my intuition of, like, she seems kind of afraid of like a little timid. And she doesn't seem to be, like, really wanting this role, but she says she does. So something feels off here, but, whatever. Like, she's from a great has a great background.
Ronen Pessar:Like, let's just go for it.
Collin Mitchell:Yeah. 2 so 2 things 2 things for that. 1, trust your intuition. I think you're spot on. Another hack is, like, don't die don't do deep dive into their experience before that first call.
Collin Mitchell:Like, a quick scan of their LinkedIn profile these days is sufficient. If they reply, you know, quick scan of their LinkedIn profile to see if you even wanna send them those video questions. And then once they send those video questions, you decide if you wanna meet them.
Ronen Pessar:Yeah. And at
Collin Mitchell:that point, you really haven't done a deep dive and looked at resume and all that other stuff because, you know, I think that can make a big difference.
Ronen Pessar:Oh, for sure. I had a a former CRO who said to me, you need to always have a bench. Always have a bench of people you can hire. And what I learned about what he was trying to tell me, which is very valuable, is when you have people that are ready to go or people that you've pre vetted and you like, you feel a lot less of an attachment to low performers who have to go. You're ready to move on from them because you know you can backfill them.
Ronen Pessar:Or in the case of like, in my previous job, we were growing so fast, I actually sometimes needed to find 3 people overnight. And if I liked someone from previous interview, and they went through the process, I would say this to every candidate and people who've interviewed with me have probably heard this. It's like, hey. Sorry. We we can't give you the offer now.
Ronen Pessar:If it's alright with you, I'd love to stay in touch. And if we have an opening again, I will actually reach out to you first because it'll save me time. I won't have to go interview. And if you're still open to it, we'd love to give you the offer then. Is it alright if I stay in touch with you?
Ronen Pessar:And I've hired at least 5 or 6 people that way. Yeah. Save me a whole a whole cycle not having to go through it. But, like, yeah. Also, the interview the video is a a great hack.
Ronen Pessar:One thing to just be aware of is is a form of interviewing called structured interviewing. And the idea is just to have, a very similar approach to every candidate in order to have a fair comparison. There there is some stuff around, like, implicit bias that goes into this which is important to be aware of, but I'm a big fan of structured interviewing for a different reason. You know the scoreboard. It's like a game.
Ronen Pessar:Imagine if you're playing, like, a game of football, but there's 2 different rules for for, like, both teams. The score is gonna be really weird. So when it comes to interviewing, make sure you sit down with, like, 2 or 3 other people to think about what is the structure we want to have and why. Mhmm. You know, knowing exactly what you're looking for at which point in the phase.
Ronen Pessar:And the last thing here is use role plays. Stress test the skills. If you're okay with someone without experience, can you stress test the underlying character trait that leads to success in that skill? Classic example. I'm gonna have my SDR cold call.
Ronen Pessar:You've never cold call before? No problem. How do you handle getting objections on a call? Are you gonna just try to push through it or are you gonna fold? Because I want the people who naturally wanna keep pushing through.
Collin Mitchell:Yeah. Yeah. I love that. Ronan, it's been awesome having you back on the show. Really appreciate it.
Collin Mitchell:Any final thoughts, and where's the best place for people to connect with you?
Ronen Pessar:I could get got on this stuff all day. So if you wanna chat some more about, best practices around hiring or even just managing a team, come find me on LinkedIn, Ronen Pesar. I'd be more than happy to connect, especially if you're newer to leadership and and you're really hell bent on building a high performance team.
Collin Mitchell:Awesome. Appreciate it. We'll drop it in the show notes there. We'll also link the last episode. Ronan was on as well because there's tons of nuggets in there for sales leaders.
Collin Mitchell:And if you enjoy today's episode, please write us a review, share the show with your friends so we can help more sellers and sales leaders transform the way that they sell.