We got another great survey from Bridge Group which looks at the SDR teams of 406 B2B businesses. The survey is dominated by SaaS companies, and while it’s well worth the read, our favorite findings are below:
The goal should be to fill calendars. Some SDR teams focus on setting introductory meetings for sales reps/account executives while others take it a step further and try to provide interested prospects, known as ‘qualified opportunities’. Bridge makes the point that the decision to provide one or the other should be based on how full the sales reps’ calendars are: if your sales reps have full calendars, then the SDR’s should focus on qualified opportunities until you can hire more sales reps. If the calendars are empty, then focus on getting sales reps less qualified introductory meetings as well as qualified opportunities. In other words, fill their calendars.
Separate inbound qualification and outbound prospecting if your flow is that strong. Only separate the SDR team if you’re getting enough inbound deal flow such that you need to staff at least two SDR’s on the task full time. Otherwise, the SDR team should handle both inbound and outbound deal flow. 49% of respondents have this hybrid style.
Report to sales. “Since 2012, we’ve found the vast majority of SDR teams reporting to Sales. This year the trend continues with 68% of groups sitting within the Sales organization. It’s worth mentioning that roughly half of all inbound teams report to Marketing. This makes inbound groups 1.4 times as likely to report to Marketing as specialized, hybrid, or outbound groups.”
The average ratio is 1 SDR for 2.6 account executives. Smaller companies tend to have a higher ratio of SDRs to AEs, meaning one SDR supports even fewer AE’s.
64% of SDRs are remote. “In 2018, 48% of companies reported reps in the same role working in different locations. Due to COVID/remote/WFH, that number increased to 64%. Note that 23% of companies report plans for “fully remote” SDR groups for the foreseeable future. That was nearly unthinkable just a few years ago.”
The typical SDR has only 1.2 years of experience. That number has declined every year since 2010 when the number was 2.5 years. Of course, the more complex the product and the higher the ACV, the more experienced the SDR needs to be. Average ramp time of an SDR is 3.1 months and the average tenure is only 1.8 years, so you get 17 months of full productivity. To improve these metrics, promote your SDR’s frequently (junior, associate, senior SDR) and give them the opportunity to become AE’s.
The base salary of an SDR is $50k and OTE is $76k. Bridge Group believes the pay is low and falling because companies are hiring less experienced reps. “We find median on-target earnings of $76K and a 65:35 (base:variable) split. Continuing a decade long trend, median OTE remains flat.”
The average quota of an SDR is 19 meetings set, 12.5 semi-qualified opportunities per month, and 10.5 fully qualified opportunities. Obviously quotas vary widely, based on ACV/deal size as well as whether your SDR’s are focused on outbound marketing or inbound cultivation, the size of company they’re calling on, maturity of the market, etc. Make sure quota is attainable, otherwise you’ll dis-incentivize reps and burn them out. On average, 68% of reps hit quota. “There has been remarkable consistency around this metric over the years. Two-thirds of reps achieving quota seems to be the natural equilibrium.”
On average, SDR’s make 40 dials per day and 40 emails per day, with 4.4 quality conversations. Obviously if your group is more email centric, dials come down. On average, SDR’s make 10.6 attempts per prospect. According to Bridge, 9 to 12 attempts is the sweet spot. “By definition, phone-centric groups average higher dials per day. Interestingly, they also report 2.1X as many average QCs per day.” Median raw pipeline generated per SDR is $3mm.
Use dialing technology. “We found the median sales tech stack consists of CRM plus 4.5 additional tools. High-Growth companies report one additional tool, on average, compared to Laggards.“ Groups using dialing technology reported 28% more dials and 30% more quality conversations per day. This is because dialing tech promotes efficient routing, sets a nice cadence, provides analytics, and can even gamify the process of outbounding. In regards to email, 86% of companies in the survey use some sort of email technology.
On average, 1 manager oversees 8 SDR’s. “The median number of SDRs reporting to a single first-line leader is 8. This is consistent with our findings from 2016 and 2020. As revenues increase, front-line leaders support more SDRs. “ The compensation of a manager is $128k.
Overall, this blog post doesn’t do the study justice. It’s well worth the read and can be downloaded at http://www.bridgegroupinc.com/. Thanks to Bridge Group for putting this together.
Visit us at blossomstreetventures.com and email me directly at email@example.com. All founders and funds welcome! We invest in companies with run rate revenue of $3mm to $30mm, with year over year growth of 20% to 50%+ depending on revenue. We lead or follow in growth rounds and special situations like inside rounds, small rounds, rushed rounds, corralling investors with our term sheet, bridges, inbetweeners, cap table clean up, and extensions. We can commit in 3 weeks and our check is $1mm to $4mm. Also visit https://blossomstreetventures.com/metrics/ for always up-to-date SaaS metrics.