The Sales Development
Methodology
Predictable Revenue =
Sales Development Principles
Sales Development Playbook
Want an actionable checklist to implement Sales Development at your organization?
Introduction
The core principles (the strategy) for creating Predictable Revenue are Positioning, Pace, and Practice. These principles form a chain-link system where overall performance is limited by its weakest link.(1)
The playbook (the tactics) for creating Predictable Revenue includes Targeting, Tools, Prospecting, Qualification, and Follow-Through.
Our first pass focused purely on the tactics of building a sales development team but as we applied it to real world situations we saw the need to bring in the strategic view. Adding in the strategic layer enables us to look at a revenue team as a system of parts instead of just as a singular playbook that exists in a vacuum.
For context, our experience comes from having a hand in building over a thousand sales development teams over the past 10 years, booking thousands of meetings ourselves, and conducting hundreds of internal and external customer research interviews for a variety of offerings including our now mostly-sunset sales engagement tool (RIP carb.io).
So, how does it fit together?
Positioning defines the market opportunity and context. Pace determines how much a company is willing to invest and how quickly they need to move. Practice is the measure how well the team is able to translate the high level strategy into tactics and into results. The playbook is the roadmap of how to do just that.
By providing these three lenses to view the performance of your sales development team and the blueprint for execution, our goal is to first show that they are deeply linked to one another, second, to offer helpful feedback loops, and, finally, to empower sales development leaders to build a successful outbound engine and achieve Predictable Revenue.
Sales Development Principles
Positioning
The strength of your offering in the market determines how effective your revenue efforts will be. Your company’s position in the market can be boiled down to three elements: what makes you unique, the value of that uniqueness, and how your market is structured.
- The strength of your differentiator
- The strength of your market position vs your competitors
- The age and makeup of the market (eg wide open vs commoditized)
Some will argue that product market fit is the only thing that matters and be done with it, and while we wholly agree with them we also found that it is an issue that’s largely out of a revenue leader’s hands. We also believe that product market fit exists on a continuum from weak to strong, with hypergrowth way out on the right hand side. By focusing on positioning, we accept the product as it is and choose to spend our energy finding the positioning for that product that will have the greatest impact. In many cases, what looks like a lack of product market fit is actually just poor positioning.
- Define your positioning
- Conduct competitor analysis. Who are your true competitors? What are they doing? What are people saying about them? How do you differentiate? What are your customers’ competitive alternatives? How tough is your market? How commoditized is your product/service?
- Draft your unique value proposition which encompasses your unique attributes, value, and proof. Which features and capabilities are unique to your solution? How does that make your customer’s life easier? How does it help them achieve their goals? How does that help their business? Think: we help X person achieve Y outcome through Z process.
- Define your targeting (Total Addressable Market (TAM), Serviceable Addressable Market (SAM), Serviceable Obtainable Market (SOM)) & segmentation
- What stage are you at? Problem-market fit or product-market fit?
- What are the defining factors of your Ideal Customer Profile (ICP)? What are the defining factors of each segment? How do they differ from one another?
- Which buyer personas should you target? How many people can you target within an account? Who makes up the buying committee? What are their titles?
The time to market is typically governed by your market opportunity (total size) and finance strategy (resources available). Some examples:
- Bootstrapped = low and slow (low cash burn and relatively slower time to market)
- VC backed = fast and flush (move as fast as possible, raise cash every 18 months)
- PE backed = rule of 40 (growth rate plus profitability must equal 40 each year)
Three critical pieces:
- Decide on your desired time to market
- Work out what you can profitably spend to acquire a customer
- Run experiments to determine which go-to-market (GTM) channels will be profitable
Your GTM process is linked to your positioning. It defines how and where you take your solution to your customers by considering ideal customer profile, customer acquisition cost (CAC), customer retention, market size, market insights, and how your customers like to be sold to. This process should produce successful customers both consistently and scalably. Outbound sales development is just one potential GTM channel. The right mix of customer acquisition channels turn consistent effort into predictable results.
Scalable customer acquisition channels bring in customers at a cost that makes sense to the business. The price of your product dictates how much money you should spend to profitably acquire a customer. This will dictate the sales development styles you can afford to implement. Companies with smaller annual contract values, for instance, typically find it more profitable to grow through inbound marketing. Outbound sales development tends to be more profitable for companies with annual contract values (ACV) of $15,000 USD and higher because opportunity costs are much higher. If your deal size varies above and below the $15k benchmark, you should consider setting a minimum outbound deal size. Without minimum deal sizes, sales reps can waste time sourcing and working deals that are too small to be profitable for your company.
- Conduct market research. Read industry reports, learn about trends, developments, and innovation. Figure out where these customers consume and create content, what channels they use for communication, and how they like to be sold to.
- Conduct company research. Learn about the types
- Conduct persona research. Look at job postings, LinkedIn job descriptions and about sections, and articles and blog posts authored by your target persona to understand what they care about, the goals they are trying to achieve, and the language they use.
- How does my ICP like to do business?
- What is my ideal CAC? How much can I reasonably spend on customer acquisition?
- What is my current ACV? Should I set an outbound minimum deal size?
- What prospecting style (if any) makes sense for my ICP & CAC: account-based, persona-based, use-case-based?
Practice
This is where the high level strategy is translated into tactics and executed by the team. This includes:
- Getting support from the entire organization
- Cultivating a culture of experimentation and feedback
- Hiring the team
- Building and running the playbook
You’ll notice that Sales Development is just one channel that fits in this section and while some of the ideas here will apply to other channels, there are likely very notable differences.
Getting Support from the Entire Organization
Building your sales development processes and playbooks can be messy – from honing your ICP to list building, to building your sales development team and testing different messaging, there is a lot to learn. Make sure that all stakeholders understand the timelines and are willing to invest the time, energy, and resources to do it right the first time. Creating an outbound program from scratch into a consistent producer of pipeline can take 4-6 months even if everything goes relatively smoothly and, depending on your sales cycle, it can take another 8-18 months to see the beginnings of predictable revenue.
Sales development is a part of the revenue team and cannot be successful without the buy in and support of other revenue leaders. There are simple but core pieces of marketing and sales collateral that your sales development team will need if you want them to be successful. They include an up to date website, content for customers in the top/middle/bottom of the funnel, and case studies or customer stories for each customer segment or use-case.
Culture of Experimentation & Feedback
Your GTM process is a living, breathing, constant thing. For every GTM action, there is an equal and opposite reaction and everyone who touches the customer must not only have their ear to the ground to perceive what those reactions are but must have a feedback loop in place to both communicate the information and put it to use.
This includes everyone on the front lines: marketing, sales, and customer success. Feedback loops will inform the changes that need to be made to the sales development process. You will get feedback from your prospects through your front-line sales reps, cold emails/calls/social touches, are-we-a-fit (AWAF) calls, discovery calls, and demos. You will get feedback from customers through your customer success team, customer satisfaction (CSAT) scores, surveys, Voice of the Customer interviews, and exit interviews. You will get feedback on your own strategies, processes, and solutions, from your people.
This feedback must be encouraged, utilized, and actively sought out. You will close the loop on your target market by keeping tabs on changes, trends, events, your competitors, and thought leadership in your/your customers’ industries. You can also close the loop by learning benchmarks, innovative new ideas, and what works and doesn’t work from your network, your peers, and other companies in your space. Always be consuming, always be experimenting, and always be documenting what you learn.
Team
The first version of your sales development team and where you end up will tend to look very different. For companies looking to build their first team, we generally recommend hiring two SDRs and making sure that there is one manager with at least 50% of their time to dedicate to the program. Ideally, you’d be able to hire a dedicated manager but we understand that not every company will have the cash to invest in that upfront. As the team grows, it’s helpful to start thinking about hiring someone to take care of the sales operations and data (contact/account list) quality.
However you choose to construct your team, you’ll need clear roles and responsibilities for your employees, starting from the hiring process. Map out the tasks you want an employee to take on, the skills they need to do the tasks well, and understand the behaviours best suited to the job. We’ve modelled our internal hiring process off of The Who Method (2) and while you can check out our blog post on how it works internally, we highly recommend you buy the book.
Once you have someone in the seat, make sure their job description remains clear. Ensure they have support and a direct line of communication to other sales development stakeholders for feedback loops. Finally, you must design the right compensation package that incentivizes good behaviours and drives all sales development employees towards the same goal: predictable revenue.
Playbook
The last step in executing a successful outbound motion is the creation and execution of the sales development playbook itself.
- Align on mindset.
- Are all senior leaders and sales development stakeholders aligned when it comes to positioning, GTM process, mindset, timelines, resources required to get sales development right the first time?
- Align the revenue team
- Compile/create your minimal viable marketing and sales assets.
- Is your website useful? Can visitors understand what you do in 8 seconds or less? Can they navigate easily to customer testimonials, solutions by industries, use-cases, press, resources, etc? Can they find where to contact you?
- Do your customer stories/testimonials/case studies clearly present the problem, solution, result for your customers? Can you hear the Voice of the Customer through them? Is this done in a way that aligns with your positioning and the way your ICP likes to do business?
- Do your customers want/need one-pagers?
- Compile/create your minimal viable marketing and sales assets.
- Is your website useful? Can visitors understand what you do in 8 seconds or less? Can they navigate easily to customer testimonials, solutions by industries, use-cases, press, resources, etc? Can they find where to contact you?
- Do your customer stories/testimonials/case studies clearly present the problem, solution, result for your customers? Can you hear the Voice of the Customer through them? Is this done in a way that aligns with your positioning and the way your ICP likes to do business?
- Do your customers want/need one-pagers?
- Create feedback loops.
- Do you have feedback loops that will indicate if part of the strategy is not working? Does every employee understand to whom they should bring potentially issues/challenges? Do leaders encourage constructive criticism and innovation from their employees? How is feedback incentivized or deterred?
- Build a team.
- Define the tasks you need employees to complete. Are they going to be making cold calls? Crafting LinkedIn messages? Writing emails? Building long-lasting relationships with lifelong customers? Building sales playbooks? Setting up and optimizing your tech stack? Onboarding customers? What else?
- Document the skills required to complete these tasks successfully. Do you need someone tech-savvy? A strong communicator? Someone with experience or transferable experience copywriting or cold calling?
- Decide on the behaviours or soft skills your employees need to get their tasks complete and to fit into the culture of your company. Do you need someone fearless, persistent, tenacious, driven, creative? Do you need someone empathetic, understanding, thoughtful, reflective? Do you need someone steadfast, analytical, and organized?
- Build a team that suits your needs and budget. Do you need full cycle salespeople? Dedicated prospectors and closers? How many of each? What ratio? Do you need both customer success and account management people? Do you need sales enablement, sales management, team leads?
Sales Development Playbook
The core playbook for creating Predictable Revenue includes Targeting, Tools, Prospecting, Qualification, and Follow-Through. It is designed to help you assemble a sales development playbook one building block at a time.
Your playbook should contain, at a minimum, documentation around ICP and buyer personas, market research, competitor analysis, best-performing sequences, email templates, social touches, cold call and AWAF scripts, objection handling, qualification criteria, and ongoing experimentation and iteration. Your playbook is an ever-evolving document and, much like building a team, you don’t have to complete the whole thing at once.
As Justin Michael says, split test everything(3) .
The best way to learn what works and what doesn’t is to test and make incremental changes based on what performs best. Document in your playbook as you go so you don’t waste time on tactics you’ve already disproven and so that you can make data-backed decisions.
This process forms another chain-link system where overall performance is limited by its weakest link.
Now that you’re ready to launch your sales development program, you need to translate your ICP and buyer personas into accounts and contacts. Depending on which prospecting style makes sense, this may mean identifying named accounts with large buying committees in a certain territory, industry, or segment. Or you could be just fine with lists of contacts from companies within your ICP. Sourcing accurate, up-to-date contacts complete with full name, title, company name, work email address, direct phone number, and any other specific information you need can be a challenge both logistically and financially. Data-as-a-service subscriptions can have a hefty price tag which drives up your CAC and though they offer the largest data sets on the market, they may not have data on your ICP. Having your reps build their own lists, though light on up-front costs, takes valuable time away from prospecting. You need to find a consistent and reliable data source that makes sense for your business.
- What is your ideal customer profile? What criteria do companies need to meet in order to be a strong fit for your solution? What headcount, what revenue, what tools must they be using, etc?
- Who is your ideal buyer persona? What is their title? Their seniority level? Department?
- Who else might you prospect? Who makes up the buying committee? Who could influence your buyer, who could be a detractor, who could be a champion?
- How can you segment your lists into smaller groups of like users so that you can target with a 1:many approach that is timely and relevant and feels 1:1? What are the jobs-to-be-done, pain points, and aspirations for buyers in each segment? What differentiates one segment from another?
- Where can you reliably and affordably source contact information for these prospects? Is this information on websites, in online directories, or available for purchase through large or boutique data providers? Should you outsource your list-building or hire a researcher in-house? Should your prospectors build their own lists?
- What information do you need to have about a prospect before you can effectively reach out?
There is a minimum tool stack required to get started with sales development. It consists of customer relationship management software (a CRM), a sales engagement platform with a dialler for automating and organizing multi-channel outreach, social profiles, video conferencing software, and at least 1 alias email address per prospector. You’ll also need a basic understanding of how these tools work optimally and integrate to create a complete picture of your customer journey and revenue-generating organization. If there is no one with this skillset at your company, you may have to hire an employee or work with a consultant on a fractional basis. These tools will also play a vital role in reporting, so make sure you understand what you should be measuring, from outbound key performance indicators (KPIs) to pipeline metrics and conversion rates.
You’ll also need an understanding of email authentication and deliverability so that your prospectors can reach out to contacts via email without landing in spam or blacklisting your company domain.
An advanced tool stack can start to incorporate parallel assisted diallers, conversation analytics tools, intent data, workflow automation, sentiment analysis, etc, etc, etc.
- What are the basic tools that you need to get started? What kind of budget do you have for tool stack? Which tools suit your needs best? Should we buy a separate CRM and engagement tool so that reporting is easier and data is more accessible, or do we need a less expensive tool that combines the two functions?
- How much are you going to automate in your outreach? What can you automate? What volume of outreach do you need your prospectors to do to meet your opportunity and revenue goals? What tools will help you do that?
- Where do your prospects spend their time? How do they like to be prospected? How do they like to do business? Which channels will you use to reach your prospects? What tools will help you do that?
Your prospecting strategy must take into account your targeting, tools, goals, and how your prospects like to do business. In your playbook you must document the success (reply rates, meetings booked, opportunities created) of your sequences and detail length of sequence, types of touches, and frequency of touches. You need to include best performing email templates and frameworks for creating new emails complete with open, reply, response, and conversion rates. Conversely, you must include the same level of detail about what works and what doesn’t via social media, phone, video prospecting, and any other prospecting methods you employ. Be sure to include information on common objections and how to handle them, sales collateral to share with prospects, and data on best days and times to execute calls, emails, and social touches. Finally, you must outline best practices for ongoing experimentation, iteration, and optimization so that your reps are encouraged to be critical of their own approaches and seek out new ones, and so that no critical information on your prospecting playbook is ever lost.
- Which channels are you using to reach your prospects?
- What type of language do your prospects use? Are they technically inclined, creative, analytical? How can you leverage this into your outreach?
- How the research you’ve done on industries/markets/companies/personas/competitors inform your outreach?
- What benchmarks must you try to surpass with your outreach? What is the minimum open rate, reply rate, conversion rate, etc that a touch point must meet before you reassess and try something else?
- What is the best process for experimentation? Who is in charge of experimentation? How do you make sure data is clean and learnings are captured? How do you document learnings? Who documents learnings? How do you disseminate learnings amongst the team? What are other prospectors in your industry doing that works?
You must define clear and objective qualification criteria that a meeting booked with a closer must meet before it is considered an opportunity. At a minimum, qualification criteria state that a prospect is the right type of person at the right type of company. If these qualification criteria cannot be satisfied through email or on a cold call, a prospector must schedule an AWAF call with the prospect before booking a meeting for the closer.
The goal of the outbound AWAF call is to determine if there is a true fit between your solution and the prospect’s company. This call will start building trust and a relationship, and educate the prospect on how they might be able to solve their problems and achieve their goals (provide value). AWAF calls are important because they help us to disqualify prospects early – meaning that closers won’t waste time with prospects who won’t buy, who are too small, or are just not the right fit.
- What baseline criteria must a prospect meet before they are considered an opportunity? What do I need to know about the company they work for, potential use-cases or projects, the technology they use that you integrate with, their pain points and priorities?
- How can you create an AWAF call script that blends your AWAF questions naturally into the conversation?
- How can you reduce no show rate? How can you increase opportunity quality? If an opportunity falls outside of the usual qualification criteria but might still be a great opportunity, who makes the final call?
Once the qualification criteria have been met, a prospector can hand off a meeting to a closer and can create an opportunity in your CRM. But, there must be a predefined process to hand off customers thoughtfully and set their expectations appropriately.
A prospector should introduce the idea of the closer as a subject matter or technical expert while on the call with the prospect, and give them a taste of the type of learnings and value they will take away from their next meeting. The prospector should then schedule the discovery or demo meeting for the closer while live on the call and, if possible, wait for the prospect to accept the invite before letting them go. As soon as the prospector is off the line, they should send an email to the prospect, officially introducing the closer and reiterating the purpose as well as confirming the day and time of the next meeting.
After the email is sent, the prospector should update the CRM with any and all relevant information so that the closer is prepared for their meeting with the prospect. The closer should also reply to the email sent by the prospector as soon as possible to acknowledge the introduction and make a good impression. Sam McKenna recommends treating the introduction like a precious referral and doing some quick research on the prospect’s LinkedIn to send a few personalized lines before taking the opportunity to reiterate the value of the upcoming meeting and reconfirm the day and time(4) .
As soon as the qualified prospect joins the next meeting, the opportunity belongs to the closer. It is their responsibility to work this opportunity to the best of their ability. This includes using the information provided in the CRM notes as well as doing additional research on the prospect, their company, and their market to lead a tailored and relevant demo or discovery conversation.
If the prospect no-shows the meeting or is unqualified, the closer should hand the opportunity back to the prospector to pursue.
- What templates and scripts can you create to make the hand off process more frictionless and standardized? What information needs to be filled in in the CRM?
- How and why are opportunities accepted/rejected? How is feedback given on opportunity quality?
- What happens after an opportunity is qualified to ensure it makes it through the pipeline?
This two-part methodology is designed to help companies build their go-to-market plan (the principles) and then go out and execute it (the playbook), all with the goal of achieving Predictable Revenue. While our first pass at the Predictable Revenue Methodology focused entirely on the tactics of building a sales development team, feedback from testing it in the wild showed us that some principles were missing. With their addition, we can look at a revenue team as a system of interlaced parts instead of a series of isolated steps in a prescriptive playbook.
The three core principles of the Sales Development Methodology are three lenses through which to view the performance of your sales development team: Positioning, Pace, and Practice. Positioning defines the market opportunity and context. Pace determines how much a company is willing to invest and how quickly they need to move. Practice is the measure how well the team is able to translate the high level strategy into tactics and into results. These three elements form a chain-link system where overall performance is limited by its weakest link.
The playbook – a subset of the Practice principle – is the tactical blueprint for building the outbound engine. It contains step by step instructions for Targeting, Tools, Prospecting, Qualification, and Follow-Through.
This methodology was built and battle-tested over the past 10 years as we helped thousands of companies build their sales development teams, booked thousands of meetings, and conducted hundreds of internal and external customer research interviews. We hope it serves you as well as it has served – and continues to serve – us.
Can I use sales development if I don’t have any customers?
Absolutely. And, absolutely not.
Our wheelhouse is sales development so if you’ll permit us to step outside for a moment then we’ll elaborate based on Collin’s experience (Our CEO & Co-Founder). For context, he’s 10 years into his journey as an entrepreneur and spent 10 years in B2B sales before starting the company that eventually became Predictable Revenue. In these 10 years, his track record looks like this:
- 2 unsuccessful software startups; voltageCRM < $100k total revenue and Carb.io < $1m total revenue
- 2 unsuccessful services: Market Validation and LinkedIn Prospecting both < $500k total revenue
- 2 successful services: Remote SDRs and Sales Development Coaching both > $10m total revenue and showing strong year over year growth
When you’re trying to find your first customers anything goes (5) and it doesn’t matter what any expert with a book to sell tries to tell you, including us. It’s the wild west and there are no rules so do whatever you can to make something happen. While that may be nice to hear, it’s probably not very useful tactical advice so first we’ll share what we’ve learned about how to build a company and then layer in where your first customers will generally come from. If you disagree, please refer to the first sentence in this paragraph.
Step one, find a problem you’re passionate about. Building something takes time and energy and if you don’t absolutely love the problem space you’re working in then it’ll be even more challenging to stick through the tough times.
Step two, make sure the market opportunity is big enough to justify the effort of solving it.
Step three, conduct day in the life interviews (6) to see if people feel the pain and value solving it.
Step four, build in small increments and get feedback from the people you interviewed at each step. If you do this right and the pain is big enough then people will demand to use your solution. Listen for something that sounds like, “really? You can do that?!”.
Each step should produce learnings that you can use to feedback into your model and enable you to adjust.
Your first 10 customers should come from the people you interviewed and if you aren’t seeing that, then you either don’t have product market fit (7) or didn’t talk to enough people.
If you are solving a problem in a new, unique, and valuable way then those first 10 customers will stick around and refer you to their friends and colleagues. This is where your next 10-100 customers should come from.
- If 95% of your customers aren’t sticking around past the first year then you may not have product market fit. You might have a product and be able to sell it but the true measure is long term customer success. Don’t let this discourage you, you very well could be close. Especially if you can sell it.
- If your first 10 customers are not sending you referrals then you likely don’t have product market fit. The reason to create a company is to enable our customers to solve a valuable problem they’ve never been able to solve before. If you really are doing this, they’ll tell their friends.
Depending on how much your product sells for you should now have 20-100 customers and be somewhere between $500k and $1m in revenue (assuming your offering is B2B).
Now that you have validated product market fit (95% of customers recurring & sending referrals) you are ready to start adding customer acquisition channels.
But you said that I could use sales development!
We did. If you, like Collin when he was launching his first startup, don’t have any connections in the industry, then you can absolutely use sales development tactics to find people to interview. Just remember, this is a customer development motion and your messaging should be geared towards interviewing people, asking questions, and learning as much as you can.
Collin used sales development tactics to book meetings with 50 VPs of Sales when he was validating the market for voltageCRM. Unfortunately, he didn’t actually listen to what they were telling him and pivoted to Carb.io (a sales engagement tool like Outreach or Salesloft) too late. Predictable Revenue has also helped a number of companies that needed help booking customer development interviews.
We generally don’t recommend using an outsourced partner for these types of activities because it can be expensive (though not as expensive as failing) and there isn’t an immediate ROI. If you’re searching for product market fit, prospecting like this puts you in closer contact with the customer and can provide great learning opportunities.
- “A system has a chain-link logic when its performance is limited by its weakest subunit, or ‘link.’ When there is a link, a chain is not made stronger by strengthening the other parts.” Richard P Rumelt, Good Strategy Bad Strategy
- WHO The Book
- Tech-Powered Sales by Justin Michael
- How to Win the Referral with Sam McKenna
- Paul Graham – do things that don’t scale
- Michel Feaster – how to build a category
- Marc Andreessen – the only thing that matters
- ACV – annual contract values
- AWAF – are we a fit calls
- BDR – business development representative
- CAC – customer acquisition cost
- CRM – customer relationship management software
- CSAT – customer satisfaction scores
- GTM – go-to market
- ICP – ideal customer profile
- KPI – key performance indicators
- PE – private equity
- SAM – serviceable addressable market
- SDR – sales development representative
- SOM – serviceable obtainable market
- TAM – total addressable market
- VC – venture capital