Expert Insights on SDR and BDR Success
Expert Insights on SDR and BDR Success
Real-World Strategies from SDR Luminary, Lars Nilsson
I’m recently obsessed with SDRs. In part because I always avoid their calls (4 this morning), but marvel at how central they are to sales and marketing. In annual planning, most CEOs are making real trade-offs between hiring more SDRs and AEs vs. giving marketing more budget. Where do we get more pipeline? If I find SDR’s calls to me to be wasteful and irritating, how do I make this channel work better for my clients?
(BDR = Business Development Rep; SDR = Sales Development Rep. Their primary responsibility is to prospect to new people and book meetings for sales reps. These terms can often be used interchangeably or can indicate marketing or sales alignment. I’ll use SDR for this article, but lessons apply to both)
To learn more, I’ve gone deep with the expert — Lars Nilsson, VP of Global Sales Development at Snowflake. Most people move in and out of the SDR world (most SDRs only stay 12-18 months). But Lars has built a 35-year career there, building, managing, and growing some of the biggest and best SDR orgs in tech. He has more than 230 SDRs at Snowflake! I’ve listened to several podcasts interviewing Lars, including Secrets to a Successful SDR/BDR Organization with 6Sense, Office Hours with Tomasz Tunguz & Lars Nilsson, and SaaStr’s How to Manage 100+ SDRs Across 4 Continents.
“The hardest part of closing any deal… is finding it” ~ Lars Nilsson
Lars elevates a role that’s often the red-headed stepchild of any org. SDRs are frequently early-career folks who either succeed and quickly move on to roles in other departments or churn under the pressure. Marketing relies on them to work marketing leads and transform them into sales-accepted pipeline. Sales relies on them to book meetings and to do time-consuming, low-probability prospecting. It’s a hard job! But if done right, it can be one of the most cost-effective ways of progressing pipeline and working deals. Lars had five big points that transcended all three talks:
Personalization: The success of SDRs is in their ability to personalize outreach based on the target’s industry, role, interests, or any other information they can find and then use many different channels to reach them. Effective personalization creates better experiences and better results. In the SaaStr presentation, he told a story about how an SDR targeted him by sending him a Louisville Slugger baseball bat, then the next day sent a note saying he had listened to a presentation Lars had given where he mentioned that he coached his daughter’s softball team. The SDR was selling SDR software that was relevant enough for Lars to call HIM back and take the meeting. SDRs need to have the tools in place to personalize quickly and effectively.
Prioritization: It’s really critical to identify target accounts and the ideal customer profile. Lars has seen SDRs burn out trying to call every marketing lead from a conference — when 90% was waste: filled with students, competitors, and the wrong kind of companies. He focuses the SDRs on the accounts and people that sales and marketing have agreed will result in real closed-won revenue. Marketing can and should put folks who don’t qualify back in automated content nurture sequences. Marketing teams need to do better qualification and data traingulation to help the SDRs only work the right people.
Partnership with Account-Based Marketing: SDRs at Snowflake work accounts that have been nurtured by the account-based marketing sequences for three weeks or more. His SDR team even sits within the Demand Generation org instead of sales. As ABM continues to accelerate, we should be making SDRs more and more effective (a la Latane Conant’s book No Forms. No Spam. No Cold Calls.)
Training, enablement, and management: Lars drilled home the importance of training and enablement. How to prospect, how to objection handle, how the product works, what specific industries and profiles care about, how to work all of the SDR tech stack… this all needs to be taught to these junior employees. When Lars was a fresh SDR at the beginning of his career, he got 11 months of training at Xerox (of note, I got eight weeks as a new salesperson at UUNET). Times have changed, and few companies invest to that degree. But at Snowflake, they have a one-month onboarding of deeper training and then a 12 month program called Snowtrack where they hit certain gates to progress. Plus, Snowflake has professional, experienced managers to coach and train the SDRs day in and out. Startups have trouble making time to do proper training and often don’t have experienced managers for SDRs. It makes it hard to get great performance.
Recruiting Pipeline - The reality of SDR land is that most only stay in their role for 12-18 months. Snowflake recognizes this and has a 3-month readiness program to help top SDRs transition into sales roles. Snowflake is graduating 10% of its SDR team to other roles in the company EVERY QUARTER! Of that 10%, 20% of SDRs move on to become Account Executives, 10% to Internal Partner Account managers, and 10% to Account-Based Marketers.
Fire in the belly is something I’ve never been able to teach. I can teach anyone to qualify, I can teach anyone to present… But I’ve never been able to teach how to get up in the morning with a great attitude and get after it. That is what we’re looking for. With that, you can do anything. ~ Lars Nilsson
What should BDRs work on?
SDRs generally have four different responsibilities:
Inbound - respond to people asking to talk to a sales rep - high probability
Inbound nurture - respond to people engaging with content or hitting a lead score qualifier
Outbound - reaching out to a new contact who hasn’t asked for engagement
Deal support - booking meetings with additional contacts within an opportunity
At Snowflake, the SDRs are primarily aligned to accounts. Prioritized, named accounts get attention from SDRs; everyone else goes into automated sequences. Lars recommends that after companies get to 5-10 SDRs, they can have them specialize in more inbound vs. outbound motions, but note that of the 230 Snowflake SDRs, only has (1) ONE! pure inbound SDR monitoring Drift, the rest of their inbound is routed to the SDRs working the relevant accounts.
According to Lars, a 1 : 3 ratio SDR : Sales ratio is best-in-class. This means one SDR fills the pipeline of 3 sales reps. Snowflake was at 1:8, now down to 1 : 3.4
How should they be measured?
A while back, I blogged about one of the most effective BDR Dashboards I’d seen, and have since been in many conversations about the key success metrics of BDRs.
Lars is very clear that the goal of BDRs is to BOOK MEETINGS. His BDRs are paid on the number of meetings they book and are completed. The sales rep is responsible for what happens after that; Snowflake doesn’t comp the rep on closed revenue. His team does, however, track a number of other metrics to help coach SDRs and keep them on track:
Number of dials, connects, sends, opens, and replies: This data is used to track BDR activity levels.
Conversion rates: This data is used to track how effective BDRs are at converting leads into meetings.
Pipeline velocity: This data is used to track how quickly BDRs are qualifying leads and moving them through the sales pipeline.
Customer satisfaction: This data is used to track how satisfied customers are with the BDRs they interact with.
One issue with SDRs is that because they don’t make as much as sales reps, they quickly want to move on. The CEO of SaaStr, Jason Lemkin, shared some interesting ideas about how startups might tie more bonus $$ to SDRs who achieve outsized revenue contribution. This could make the role more long-term for high-performing reps. Listen to his ideas here: 5:15 in this video
For Inbound Marketers and Companies, Velocity is Key
In discussing this article with Marino Fresch, Vice President of Marketing at Sprout Social, he said that First Time to Touch was the most important SDR success metric for his own focus. When sales say they “aren’t getting enough leads,” he digs into the average time-to-touch. If it’s days (or a week!), he focuses on getting it down to hours to drive up conversion and success vs. making it worse with more leads. He’s found it hard to get under 2 hours with people in meetings etc, but targets ASAP. He shared that Salesforce has a goal of 30 minutes! Sprout Social has grown through massive organic and inbound interest. His laser focus on getting first-time-to-touch as quickly as possible, especially for inbound interest like “contact me” and “request a demo,” has made a huge impact on the business.
(Among my bad BDR experiences was a recent email I received from a BDR about a conference I attended months ago. The BDR saw I had attended and wanted to meet ASAP this week… The follow-up time was out of touch with his urgency and his lack of any personalization or understanding about me made the whole email off-putting.)
Where should BDRs live?
As I wrote in my blog on BDR Dashboards, BDRs live in both sales and marketing. Often, this depends on which leader has more appetite and/or experience managing them. The advantage of living in sales is tighter alignment with the sales team and, potentially, easier path to promotion in the sales org. The advantage of BDRs in marketing is potentially greater alignment with Account-Based Marketing, potentially faster velocity to work inbound leads, and less cherry-picking of marketing leads as SDRs work both inbound and outbound. Either can work, but both teams need to be invested in the success of this critical hand-off in the business.
What does a good dashboard look like?
I shared 6sense’s in my blog on one of the most effective BDR Dashboards I’d seen. I’m on the hunt for more! Please Share. I’m hoping I can get Lars to share one…
Random Success Tips
BDRs should be on every call they set up for the AEs to learn
BDRs need a professional front-line manager and leader to care about them and coach them, someone who has done the role before (After you have 3-4 SDRs)
Lars goes through aspects of his tech stack and recommendations for different vendors in his SaaStr session.
Does Lars Advise? YES!
I’m such a Lars fangirl now. I wish I had time to listen to all of his sessions and learn more. As a corporate leader, I really just want to hire him to come in and put the right pieces in place. Turns out, he has a consultancy, SalesSource which, according to late-breaking confirmation is alive and well. I am in no way affiliated with nor a client (yet!), but this man has more experience with SDRs than anyone I’ve ever met. Hoping I can learn more from him or have him help my clients over the years to come.
P.S. Insights on what he measures and why
I received this detail from Lars after I wrote this article, but found it so helpful I thought I should add it in!
“Here's a recent write-up I sent out to a vendor that reached out and asked what KPI’s I was using and also how I you use them to diagnose what’s working/what’s not working...:
We usually look at 3 kinds of metrics to run the business: outputs > efficiency > inputs, in that order. It's incredibly important to keep your output metrics well aligned to the strategic goals of the business (new logo acquisition or customer expansion? cost efficiency or topline growth?) and to keep your eyes trained on those outputs as a leader. These metrics are pretty straightforward though and do not require a ton of time to monitor: total pipeline % contributed, total pipeline $s, # of meetings, and sometimes, closed won bookings. As with all metrics, they should be aligned down to multiple levels of the organization and across your unique geographies/segments/lines of business.
What I spend a bit more time on, especially with my operations team, is looking at the efficiency metrics. If you are blowing out your results in every dimension of your business, you may not have set your targets high enough. Typically there will be softness in some team, in some geography, or with some individual. That's where efficiency metrics come in. Key efficiency metrics include: account-to-meeting rate (# of accounts with a meeting divided by # of accounts worked), prospect-to-meeting and lead-to-meeting rates, positive email reply rate, conversation to meeting booked rate (# meetings booked over the phone divided by phone convos with intended prospect), meeting held rate, and meeting-to-opportunity rate. You will spend more time here than on results metrics, particularly when experimenting with new campaigns, enablement efforts, and tech stack investments. It's the quick feedback loop to determine if your changes are adding leverage into the business.
Finally, you have input metrics. Think about this as the realm of what SDRs can directly control as a product of their behaviors. Key input metrics include # of prospects added to sequence, # of accounts worked, # of phone calls made, # of emails sent, # of social touches made, and potentially # of contacts or accounts created (depending on your business process). # of prospects added to sequence has really become the golden metric in SDR-land due to the power of sequences (for good and bad), advancing email deliverability hurdles, and the rise of account-based motions. If your SDRs add too many prospects to sequences too quickly, they will fall out of rhythm with all of your proven plays and falter on the three important points I just mentioned. If they add too few prospects to sequence too slowly, they will fail to fully utilize their capacity and risk missing their number. Ultimately these are the metrics, and associated behaviors, that your frontline management team should be living and breathing every week with their teams. As Kevin Dorsey would say, that doesn't mean Slacking out "make more dials!" it means dissecting and coaching to all of the behaviors that will result in more dials on a rep-by-rep basis: intentional time blocking on the calendar, thoughtfully preparing lead lists, constantly role playing to build confidence, correctly dispositioning prospects for bad contact information, using data provider tools efficiently. The list goes on.
How to determine what's working and what's not? 2 ways. Make a relative comparison within your business or benchmark it to those outside your business. I prefer the first specifically looking at your historical data for the top 10% of SDRs for that metric. I am a big fan of cataloging "what good looks like" and managing to the actual metrics of those who do it best.”