Why Does the SDR Role Exist?
Our book Predictable Revenue documents how Salesforce applied the specialized SDR role to their process, which was so impactful it added $100M in revenue in their first few years of operation.
The core idea is that companies should specialize their sales roles into prospector (SDR), closer (AE), and account manager to improve their sales team’s revenue efficiency.
One of the key reasons the SDR role exists is to address the issue of low or inadequate performance among full-cycle reps.
Full-cycle reps handle all aspects of prospecting, closing, and account management, which can be overwhelming and challenging to balance.
This often leads to a 2-month cycle in which the rep focuses on one responsibility per month while neglecting the other. For example, a sales rep might spend the first month focused on prospecting and the second month on closing, which causes the pipeline to dry up and forces them to start the cycle again, making it difficult to achieve consistent performance.
The second reason the SDR role exists is to prevent the mythical $1M rep from happening.
This refers to a situation where a rep has been in the full-cycle role for over 18 months, and has a book of accounts to manage, including renewals, upselling, and customer service.
The rep becomes overwhelmed and has little desire (due to the incoming commissions) or doesn’t have time to prospect for new business. It can lead to a situation where the rep manages $1M in recurring revenue but has no time to close new business or prospect for new leads.
To avoid this scenario, companies can hire SDRs to focus on prospecting and free up full-cycle reps to focus on closing and account management, although we recommend specializing the closing and account management roles, too.
The SDR role exists because it is a profitable specialization for a sales team!
The Power of Specializing Sales Roles
Although a few unicorn reps can perform exceptionally well in all aspects of the sales cycle, most face challenges in managing their time across all three stages and often have a particular part of the cycle they excel in.
Since the closing phase has a more significant impact on revenue, it may be advantageous for a company to have a top-performing representative concentrate solely on this task while other less experienced and less expensive reps tackle prospecting or managing accounts.
The benefits of specialization are two-fold.
First, it enables reps to focus on their strengths and perform their tasks more efficiently, which leads to higher-quality work and better results for the company. Second, it allows companies to save costs by assigning less experienced reps to less revenue-impacting tasks.
By understanding the value of specialization in sales roles, you can leverage the strengths of your sales team to achieve optimal results by identifying and cultivating talent that excels in specific areas of the sales process.
Check out our free field guide for surviving your first 90 days as an SDR, where you will find everything from understanding the role, mindset, and habits to the tactical steps to develop empathy for the customer, identifying the right accounts and prospects, and tons of resources on writing cold emails, cold calling, prospecting on LinkedIn, handling objections, finding buying triggers, and more!
How Specialization Optimizes the Sales Process for Added Revenue
Each specialized role can have its own set of best practices, tools, and technologies tailored to their specific responsibilities. For instance, a sales development representative may use different outreach methods compared to a customer success manager. By streamlining the sales process for each role, you can reduce waste and minimize costs associated with ineffective sales strategies.
Sales specialization can help identify and develop talent in specific sales areas more quickly, allowing them to build stronger teams to achieve better results with fewer resources. With a clear understanding of the different sales roles required, companies can hire and train sales professionals who are best suited to each role. This ensures that sales teams are highly effective and productive, resulting in lower employee turnover and recruitment costs.
Here’s how the rough math on how Specialization can play out.
In scenario 1, the company’s revenue is $455K from 3 full-cycle reps. In scenario 2, the company’s revenue is $63K with one prospector, one closer, and one account manager or $1.26M with one closer and two dedicated prospectors.
The SDR role was created to address the need for specialized roles in the sales process. The importance of SDRs in a sales team lies in their ability to focus on lead generation and prospecting, allowing sales reps to concentrate on closing deals and managing customer relationships.
Sales specialization helps optimize the sales process by dividing sales tasks into specialized roles, increasing efficiency, productivity, and reducing costs. This approach ensures that sales teams are highly effective and productive, resulting in better sales outcomes with fewer resources. Ultimately, the SDR role and sales specialization are critical in building stronger sales teams that can achieve better results and drive revenue growth.
If you need help building an outbound team from scratch or want to augment an existing one, click here to book a free discovery call. We can help you expand your team, build a playbook, craft sequences, and more!