The ultimate goal of Sales Operations in a SaaS (Software as a Service) company is to align the overall organization’s roadmap and build & execute on a successful Sales Strategy to create predictable growth in Revenue and New Business. What this involves is building a set of KPIs and Dashboards to drive insightful actions for each aspect of your organization across Marketing, Sales, and the Customer Success teams. At the very top of the funnel is driving “New Business”. There are three functional departments that have this responsibility – Marketing, Sales, & Sales Development. This post will focus solely on the ‘Sales Development’ department. Sales Development is the function of a company that is infamous for ‘cold calling’ or ‘cold emailing’, and the reps are commonly referred to as SDRs.
I’ve spoken with several colleagues that work in other SaaS companies that are thought leaders in this space, and have gathered the SDR Metrics that matter to them (thanks Jasmine, Stephen, Phil, & Brian!). This post is a summation of my conversations with them.
SDRs go by many different names in the software industry. They have been known as Business Development Reps, Sales Development Reps, Enterprise Business Reps, Lead Development Reps, Marketing Development Reps, Inside Sales Reps, etc. The goal of this role is to work on the outbound and inbound lead generation and qualification side of Sales, alongside Marketing’s alignment, to build the top end of the funnel. Whether the SDR team is solely focused on Inbound, a hybrid mixture of Inbound and Outbound, or focused completely on Outbound; their goal is drum up new business and move a lead/company through the qualification process; ultimately passing them off to Sales [the ‘Closers’, commonly known as Account Executives (AEs)], as a Sales Accepted Lead to continue moving the Prospect through sales cycle.
Being at the top end of the funnel, the SDR team is vital to meeting the overall company goals. Working backwards of the organization or business unit’s goals, and knowing the close rate of opportunities as well as the average deal size – you can figure out the quota that needs to be attained by your SDR team. What are the metrics that are important to measure to understand SDR effectiveness? I’ve broken these metrics down to three groupings – Activities, Outcomes of those Activities, and the Opportunities that are generated.
There are other metrics that are important, such as tracking the inbound leads that has been generated from Marketing, but I won’t address these ‘warm leads’ in this article. Typically these involve Service Level Agreements with Marketing on new pipeline delivered to the SDR, and the SDR tasks and actions on these leads. Metrics that are important are time between lead creation, conversion, and first call, etc.
Sales Development Metrics
Below are a few of the metrics that matter when understanding SDR KPIs.
SDR Metric #1: Activities
The first metric that is important to measure is the activities that are being done. Activities have a huge correlation with the the outcomes of the interactions, which ultimately lead to closed won deals. How many dials are the reps making a day? How many emails are they sending? What sort of social interactions are they having with the prospect?
Activities, and phone calls in particular, are correlated with success. By understanding the amount of dials, emails, and social touches a rep is making a day can influence how successful they are in their job. Moreover, if you’re using a sales enablement tool (Outreach, Salesloft, Tout, Mixmax, etc), you can automate the tracking of these activities into your CRM (such as Salesforce, Zoho, Dynamics, et al)
A few good reports to have are:
- Calls/Day
- Calls/Week
- Emails/Day
- Emails/Week
- Social Touches/Day
- Social Touches/week
You can then display these reports into a dashboard of the entire team for the manager & other executives of the organization to view. You might even have weekly SPIFs (Sales Performance Incentive Fund) that incentivize them to make their activities, such as a free lunch or giftcard during team meetings.
Other metrics that we want to include are also how quickly the sales development team is following up on inbound leads, or things that can be classified as ‘immediately actionable’. Items like these are ‘call me’ requests, ‘demo requests’ and pricing inquiries. These are segmented out from items such as white paper downloads or 3rd party uploads.
Metric #2: Outcomes
The second important metric to track are the outcomes of the activities that the SDR team is doing. How many connects is the SDR making – actually getting in touch with someone and having a conversation with them, not just leaving a voicemail? How many initial meetings are being booked by the SDR? What is the time it takes to move opportunities over as sales accepted leads? What are the percentages of initial meetings to sales accepted opportunities?
The outcomes of the activities that are performed are important as well. We want to be able to view what the outcome of these calls are (aka Call Dispositions). What sort of sequences, or the process of SDR follow up – are more effective than others? Can we A/B test these campaigns to optimize the correct follow up for the different personas of the organization?
Looking directly at emails, what are the rates of Opens, Clicks, & Responses each email is getting? Can we move the lever towards more conversation?
A few good reports to have are:
1. Call Connects/day
2. Call Connects/Week
3. Email Replies/Day
4. Email Replies/Week
5. Initial Appointments (meetings set)/Day
6. Initial Appointments (meetings set)/Week
By running tests on different cadences on different prospects can help refine your follow up strategy. Does the campaign that the prospect is going through have different email and dialing cadences? For example, are you reaching out too much or not enough? Is the content of the email resonating with the role of the person that is receiving it?
Metric #3: Opportunities
Opportunities are all about pipeline contribution. Based off of the number of opportunities and what stage they are in, we can predict what the total amount of closed bookings can be within the quarter by relating them to historical figures and conversion rates. The tracking of opportunities is vitally important to understand the effectiveness of the SDR team.
In this, we want to know – was the opportunity created by the SDR? What is the total number of opportunities that they are creating? When a prospect moves from a qualification stage and is passed over to the Account Executive, what was the amount of the of the deal?
With this information, we can get relevant insight into:
- How effective is the overall SDR team being?
- Where are there coaching opportunities to train the team?
- How can we move the needle on company objectives if we add another member to the team?
SDR KPIs that Matter
The goal of an SDR manager, Director, or VP is to create new business. One of my colleagues has a great visual he writes on the whiteboard for his SDR team. It describes the four quadrants that an SDR can fall into:
Thanks for sharing this with me, Stephen!
In the Top Left Corner, you can see that the SDR is making all activities and goals. In the eyes of the manager or director, the rep is golden & will not be micromanaged. Leadership should focus on the career-pathing of this SDR, and how they can grow within the company.
In the Top Right Corner, you will see that the SDR is making their goals, but not hitting their activity requirements. This is something that the manager will be curious about, and ask. The nagging question in the manager’s mind is – “could they do better?“.
On the bottom left corner, the SDR is making their activities and not their goals. Here is a great opportunity for coaching. What are they doing that is different from others on the team? How can the manager help the SDR improve their performance?
Finally, in the bottom right corner of this quadrant, the SDR is not making the activities or hitting their goals. In this area, the manager’s conversation with their employee will probably be around soul searching. Is this the right company for them? There may be a formal plan involved to have the SDR hit their goals or decide that they are n0ot a good fit for the role.
Hope you enjoyed this article, and thanks again for all my colleagues that contributed. Leave a comment and let me know what you think!
