Bryan: Hey, everyone. Bryan Whittington with this week’s Talent, Sales and Scale show. I have a real treat for you today. We have Kyle Smith from the Bridge Group. We’re going to be beating up the Periodic Table. No, not of elements, not the chart, but the Periodic table of inside sales metrics. And back on Episode 3 with Ryan Reissert we talked about the math of sales. Or back in my Sandler days, whenever we talked about cook book, how do you know that your activity is to drive revenue and to drive opportunities? This is really why this brings this to the table. So Kyle is with the Bridge Group that does play book development. And a lot of analytics, (and I didn’t realize this until Kyle told me), these analytics are just value add, here you go, but unbelievably good stuff. So this should be a great show. So Kyle, I can’t thank you enough for coming on board today. Welcome!
Kyle: Thanks, Bryan. I’m really excited to be here. Metrics are near and dear to my heart. So I’m excited to dive in and talk through some of the research that we’ve done and see if we can help people out.
Bryan: Yes. So now, one of the key things that I always like to ask, the first question, is okay. Everybody has data. I have HubSpot sending out stuff. I’ve got data all over the place. I’ve got people talking about play books all over the place. So Kyle, why in the world should we listen to you and believe your Periodic Table of inside sales metrics?
Kyle: Yeah. That really comes down to an individual, MattPetruzzi. He’s our head of research. He’s on our team. He put in the hours to get his data-signed certification. So all the research that we do is very heavily scrutinized by him. I think the number one reason is that there’s no vested interest on our part. Any outcome from the data doesn’t lead somebody to want to partner with the Bridge Group. So the data is what it is, and it’s presented as the reality of the information that we’re able to aggregate from all the takers of our surveys. And again, MattPetruzzi is who I’ll hang my hat on, and just say that he does a fantastic job pulling this information together, presenting it in a way that’s unbiased, and just giving people benchmarks for where they should be, or how to compare themselves against like companies.
Bryan: Okay. So now, let’s talk through that. So it’s critically important to get the right information, right? And so we appreciate the work that Matt is doing. But how important are these numbers? Because you might hear from a lot of people, “Listen, it’s sales. I mean, you just have to know how to do it or not,” right? So why are numbers so important? Why should we care about this?
Kyle: Because we have to set expectations for what we can expect to get as a result of investment in the human capital. So when we do strategic assessments—and we work with primarily technology companies, a lot of companies and staffs—and they’re almost all looking to grow or scale. And most of them have money to invest. But how do you decide where to put it? And what should you expect in terms of results going forward?
And if you don’t have base line metrics like some of the research that we’ve pulled together, then you can’t effectively say, “Okay, if I spend a million dollars on developing a sales development function, does that make the most sense? Or should I dump another million into marketing to get the most possible pipeline generated? And I don’t know how to set quotas appropriately, to compensate people in a competitive way.” So really it just gives you a starting point if you don’t already have the foundational knowledge of an existing team to know where you should invest, what you should expect to get from that human capital investment, and how you goal and compensate people appropriately.
Bryan: Yes. And there’s a lot there, right? So if I’m looking at this metric, what I’m looking at here, and let me do this. So whenever you’re checking us out on YouTube, I’ll share the screen here so you can see this. But you’re absolutely able to download this. If you go to the Bridge Group on LinkedIn, they have this. So let’s talk about some of these numbers that you have here.
So sales development. I don’t know how many people out there would have thought this and of this is still up to date. But the SDR group, the sales development group, those that are out doing the active demand generation outbound attempts, 65% of those are reporting the sales, and the other 35%, I’m guessing that all of them are reporting the marketing, right?
Bryan: All right. Now has that changed at all? Have you seen any difference there? Talk to us a little bit about that column, right? So 65% of the SDR groups are reporting the sales. There’s a 1- to 2.6 ratio of SDRs to direct reps. So there’s one SDR to 2&1/2 AEs, correct?
Kyle: Correct, yeah. And so it hasn’t been published yet. But we actually actively have these. And we are still in the process of collecting data for the 2020 report.
Kyle: As you would imagine. So there has been some COVID impact. And so some of these have started to shift a little bit. So in terms of the group’s reporting structure, it’s closer to a 50-50 split now. So insoles it isn’t a trend line so much. I would say that, starting back in 2012, when the research started getting a little more serious, when we started investing heavily in it, we see a swing.
Kyle: It just goes back and forth. It’s not like a consistent trend, where they used to report to marketing and over time a greater and greater percentage is reporting to sales. Every couple of years we see these swings back in forth in terms of where sales development reports. But right now it’s a fairly even split.
And one additional thing I would say is that most often when we see sales developing groups reporting up to marketing, this is when those individuals are heavily focused on inbound lead follow-up. And so if marketing is sourcing MQLs, and the sales development function is following up on those MQLs, oftentimes it makes sense to align sales development to the marketing function, versus if they’re doing strategic account prospecting or just straight out outbound. Then in those instances it’s more likely that they’re going to report to the sales function.
Bryan: Okay, that’s really interesting. So my go-to-market strategy is really going to depend on whether or not I’m reporting to marketing or to the sales team. So with sales I’m doing the lead generation, demand generation, whereas if I’m reporting to marketing so marketing can ensure that they’re seeing that RLI from the marketing spend, there’s not that age-old “Your leads ****!”
“No, you ****!”, right?
Kyle: Yeah, yeah.
Bryan: They’re fighting back and forth. So that way in marketing we make sure that we do this. Now I don’t know if you have these because I didn’t see it on here. But I don’t know if the old numbers are still true or not, but you know, you might try that inbound lead, that marketing-generated lead maybe three to five times. And then that just goes to the wastebasket. I don’t know if you have numbers on that, or if that’s still valid.
Kyle: Yeah. We don’t poll that data as part of our research, so I’m not sure. But that’s still an issue. So in terms of just direct experience, working with reps, we know that’s a problem. And either low touches or cherry picking, some of those opportunities is what leads to the lower count of attempts per lead. And really, the way that we see that improve most often is by dialing in the lead scoring, right? So these leads aren’t good; they don’t fit our ideal customer profile; they’re the wrong buyers, whatever. That’s where we really see that issue start to happen. So if you get the lead scoring dialed in, and it’s not so heavily reliant on just the activity, but you have some of that firmographic or demographic information factored into the lead score to make sure it’s the right people, that’s where we start to see that to be less and less of an issue. And people really care a lot about those leads. And if anything we have to back them off of them. It’s not a three-to-five anymore, but we’re like a twenty. We won’t give up on them because they’re like “Oh, this thing is so perfect!” And reps get married to them and don’t know when to let go.
Bryan: Interesting. So there are going to be two parts off of that—lead scoring, and when to close a file, if you will. Let’s talk a little about lead scoring. What may be some best practices on leading scoring, whether from a technology perspective or the how-to perspective, or anything else that would go along into it? So can you talk a little bit about lead scoring—the dos, don’ts and what-fors?
Kyle: Yeah. The only don’t that I would say is to have the lead score be 100% reliant on activity.
Bryan: Okay. Can you give me a couple of examples there?
Kyle: Yeah, yeah. So if somebody downloads a white paper and registers for a Web&R and then maybe checks out an eBook, those are three activities, three on-value activities for most organizations. And so we don’t want them to instantly skyrocket. Let’s say your lead score is 0 to 100. We don’t instantly want them to jump over that hundred mark and MQL, like this is a hot lead. And that individual could easily be an intern, a student. And those are the worst two titles I can think of. (Laughter) But lower-level people are typically the ones consuming the most content, right? So that’s just the reality of any leads-marketing organization out there that I’ve worked with. And so we don’t want to get hyper-focused on people just interacting with your content, or form filling. We want to also consider the component of who these people are and what organization they work for.
So does their company match our ideal customer profile? If you sell to $20- to $100-million software companies, and they’re a two-person start-up with no revenue yet, maybe that’s not the best lead. And if you sell to VPs of sales and this individual is whatever, a director of IT for whatever reason, maybe that’s not the best fit. So just including some of that information as part of the lead score, I’ve seen people do a letter and number. The letter is the profile information. So are they the right title or the right type of company? So A-F may be great at being that.
And then the number as well. So an A-100 is a perfect person, and they’re interacting with a ton of our stuff. That is how you can prioritize your efforts. And an F-1 is probably not even going to get called.
Bryan: Yes. That’s a bad tornado and even worse. (Laughter) Okay. So I really like that. I’m going off on a little bit of a pivot here. But let’s pretend that we did that number segmentation. Are you seeing people do this with strategic account management as well—lead scoring off of current customers differing from new customers?
Kyle: Yeah. So I’ve put those in two buckets. So on the net new side, people are hopefully tiering their accounts. So the most common that I see are letters—A’s, B’s, C’s and D’s. And so you’re a. accounts are those top-tier strategic accounts. Those are the ones that you’re going to always invest the most into if you’re using any type of ABM strategy. Or you’re going to use more senior individuals to go and reach out executive to executive, that type of strategy.
So your top ten go into the A. category. B.’s are like the bread and butters. Those are the ones that are probably going to be the majority of your total addressable market. There may be 100 accounts in that range. And you ideally have to use historical data to say that look-alike type information. Who historically has been the best profile of accounts for us? Who can we close effectively? Where do we see the greatest lifetime value? Those are those bread-and-butter accounts.
C.’s are the ones that you want to de-emphasize. They are still close to the ideal customer profile. But you don’t necessarily want to invest really heavily in those. And D.’s are ones that you really shouldn’t be focusing sales efforts on. Maybe they go into marketing nurture programs to see if there are ways to elevate them on that list. But people typically segment into those four main buckets when they think about all the accounts in a given territory.
Bryan: Okay. Now that’s on New for prospects.
Bryan: Now how are they segmenting for current clients? I mean, do you see that at all? Are they lead scoring off of current clients, or are they just relying on account executives or maybe account managers, or customer success managers to do that cross-selling, up-selling from that? They’re really not looking at marketing and scoring. They‘re just doing off of those relationships and strategic account management campaigns.
Kyle: Yeah. So on the customer side I think that there is not a ton of consistency. That’s what I would say.
Kyle: So I think everyone does it a little bit differently. In terms of my client base and the individuals we interact with, I’ll give you the main two.
The main two ways that people are typically segmenting customers are just at the account level, based on employee count or revenue. So anything over $250 million in revenue goes to the enterprise team.
Kyle: And then $50 to $250 goes to the commercial team. Maybe sub-$50 doesn’t get any existing business support, right? So there are three tiers based on revenue. Or they’ll do it based on ARR—annual recurring revenue. So anyone who spends over 100K per year with us goes to that strategic team.
But really, in my opinion, the best way to segment it is based on potential. So how much do we have in terms of shared wallet? So let’s say that we close a $50,000 deal. Maybe that looks like a good deal. But how much more growth potential is there within that account?
I’m going to use GE just because they have a ridiculous employee count. So we sell a $50,000 deal to GE. Maybe that doesn’t cross the threshold to go over to the most strategic reps because it’s not 100K over, and that’s where we drew the line. But there’s massive growth potential there. We could sell to fifteen more divisions or different regions, different departments, whatever. So that should really be treated as a top-tier strategic account because of the growth potential.
Bryan: Yeah. And I’m so glad that you brought that up, Kyle, because I think that’s where most people fall down. They don’t take that into account, right?
So it might be, let’s call it a C. level from an account base that’s based on revenue, or whatever the case may be. But if I can expand that out then maybe I devote the time of an A. level.
Bryan: So that gets to be a really good point. Okay. So I wasn’t expecting to go down that path. But that is some really good stuff, gang. I mean, if you don’t have this lead-scoring mechanism set up, we’re really going to encourage you to do that. So let’s talk through the how-to’s to do that. Do we suggest any technologies to do that? Is it a spread sheet? Talk to me a little bit about some best practices there.
Kyle: Yeah. I love to nerd out and I do Excel modeling. But that is not the way to handle this. (Laughter) There are so many different technologies that you can leverage to do this, right? So depending on the size of your organization and the sophistication of your sales function or your customer success team or expansion team, or whatever you call it, I think that’s going to depend on how heavily you want to invest.
So on the sales side, Sales Force is the elephant.
Kyle: So you should be using Sales Force. But really it’s not just having it. I would invest heavily in revenue operations in particular, like .Function—somebody to own that sales and marketing tech stack, and make sure that it’s working for you. And it doesn‘t end up becoming just another glorified Excel spread sheet, with people just dumping information in, but no way to pull meaningful data out of it.
And on the marketing side I don’t know if you’ve seen it. But I think the Martech Info graphic has seven thousand vendors, or something in that space. So the marketing technology space is super crowded. I mean, the most common ones that we see are still the HubSpots, the Marketos of the world. And I’m sure I’m leaving some key players off the list. But those are the ones that come to my mind from a marketing/automation standpoint that help to do the lead scoring and push the MQLs into Sales Force.
And then in terms of segmenting the customer base I see a lot of customers actually using their own platforms to pull information out of. It’s the customer base, because the customers are users. They’re in there using the platform. And they gather and aggregate a lot of data from their own platforms. We could learn more about those customers. Some of them dump them into a BI tool, like a Tableau or something like that. But those would be the big three—Market Animation, HubSpot, Marketo, whoever. CRM, Sales Force, and on the back end maybe some BI or your own platform is what I see people using.
Bryan: Got it. Okay. I’m guessing that this is going to be all over the place, right? But I mean, any sense as to size of companies that could start to get sophisticated with those three that you mentioned? And if I’m not that sophisticated, how do I even start to dabble in this? Let’s say that I’m the founder, right? I’m just kicking this thing off. How do I start to just get things moving, because maybe I don’t have the capital to throw all of these cool tools?
Kyle: Yeah. As a starting point I would start with Sales Force. So if you start with Sales Force, that’s the one that can go the farthest in terms of your sales process.
Kyle: And Sales Force has part of that. That’s the other big one. I missed the Sales Force marketing crowd. But I would start with Sales Force as a starting point. If you’re a founder, just getting going, just get your information from Sales Force. You’ve got to end up there eventually in most instances. And so having a wealth of data that starts to build up, and getting your work flows dialed in,. making sure you have your page layouts all figured out early on is helpful in being able to report in a meaningful way on the data.
And Sales Force from an investment standpoint is a per user per month licensing model, so it’s not extremely overwhelming. And with the implementation you can get pretty gritty and do it yourself. Go take Trail Head classes. Figure out which are free so you can figure out at least how to at least get a halfway decent button click, admin-type level of skill set. But then from there I don’t know. There isn’t a logical tipping point from what I’ve seen. Maybe it’s because I don’t have a ton of experience working with those super early-stage companies, or when it starts to make sense to invest in the marketing automation solution. I don’t know what that tipping point is.
Bryan: Yeah. But I’ll tell you why. You know, if I can really encourage the listeners out there, heed Kyle’s advice, because if you don’t get Sales Force set up properly from the get-go, and you don’t have that data clean, it is a real nightmare to go back and fix. So yes, definitely take the extra time to get that done right.
Okay, then. So as I’m going out there, so now I have this sales development rep close to 50-50, between reporting to sales and reporting to marketing. Now have you seen much of a change as you’re coming out with these 2020 numbers, just giving us a little bit of an example? So last year in 2019 we were about a $48- or $50,000 base salary, $75,000 total com, with bonus and bla-bla-bla. Have you seen that start to come down? Yes, because the COVID shutdown was back in March.
Bryan: So have you started to see that come down? Where do things stand today?
Kyle: Top is flat. So it’s been in that 75-76 rangefor a while. Obviously the biggest variable that moves that up or down are those two: tenure and hire. So are you willing to take the recent college grad profile? Or are you requiring six months, one year of sales experience or just professional experience? That moves the needle a lot. That 75 average is just over a year of average experience of hire.
And then the other thing is region, right?—the cost of living. It’s the reality of the situation. So if you’re in San Francisco you’re going to pay more than somebody in Oklahoma, right?
Kyle: That’s just the reality of the situation. In San Francisco we see these creeping up 90 to 100, even for the recent college grad profile. That’s some serious earning potential for sure. And we see more people creating remote offices, secondary locations outside of the major hubs, just to bring down that total cost if the team size is going to be large enough. It starts to become a lot more appealing to go to a secondary market, where maybe you can get well under the 75K average down into the 60-65 per head, if the team size is large enough. Obviously that starts to become material.
Bryan: I see a lot of movement in sales development reps, especially if you listen to a number of the different podcasts, if you watch it on LinkedIn. You know, there are a lot of people throwing out some really good content. They seem to be getting a little bit more sophisticated, because with all of the sales enablement tools, with all of the information coming in, it doesn’t seem like this is your grandfather’s inside sales team anymore. It seems like you have to be somewhat sophisticated. An I all wrong on that? Or have you seen any changes coming down the pike with that area?
Kyle: Yeah. I mean, I would say that these teams have been extremely sophisticated. In the last five years I can see how much this has changed. I think a lot of it has to do with the level of investment in the technology. That helps to support these functions specifically, like you mentioned—sales engagement platforms like your Outreaches, Sales Labs, Sales Forces, High Velocity Sales platforms. They allow this team to be more strategic and using even a lot more data.
Kyle: So we talk about the art and science of sales all the time. That sales development function can be so heavily reliant on the science, the drive outcomes, because getting to the conversation is a science. And so executing your cadence, knowing what messaging to put in it, how to tweak those levers, we can use a lot of the data that a sales engagement platform like Sales Lab and Outreach can provide for us to really dial that in and increase the level of sophistication on those teams.
But I think I probably missed the days of where it was like “Here’s your list; power it down and make dials.” And when I came into it eight years ago I was fortunate enough to work for a company which already had a pretty strategic approach, even before we got access to the sales engagement platforms we have today.
Bryan: Yes, because it surprises me that even today, in 2020, how many people say, “Here’s a list, kid; go get it,” right? “Just pound the phones.” (Laughter) “Hey, just shoot an email. I’m not going to help you with the lead source. Go ahead and do your own.” It’s really shocking.
Now another shocking thing is that I’m looking at this Periodic Table. Again, if you go to our YouTube page, I’m sharing the screen with this. Or go to the Bridge Group and you can download this; it’s right on their site. 1.5 years average tenure. That’s kind of shocking to me because there’s just a ridiculous amount of turnover in that SDR world. How is it 1.5? Is it that if they make it past a month they’re in for a year-and-a-half or two years or three years? Help me through that, because there’s so much turnover in that area.
Kyle: Yeah. This really depends on average scale size. So organizations that sell high-ticket price items typically can afford to pay the reps more. And they stay in seat longer.
Kyle: If you can find a profile who does strategic account prospecting. Where we see a ton of turnover is in those more transactional sales, mainly because the barrier to go from SDR to AE is potentially a little bit lower. If you’re selling a $10-million ERP deal, a one-and-a-half tenured SDR is not going to go be a strategic field rep who is going to go and sell ERP effectively.
Kyle: And that gap is just so much greater. But if you’re going to close a $12,000 annually recurring SAS deal, maybe somebody with a year or a year-and-a-half of sales development experience can give that a go, and go get you 750K a year in revenue. So they’re eager to make that jump. We’ve seen it happen so much.
But really, I think the large deal sized strategic enterprise companies are what push that average up.
Kyle: Meaning that we urge our clients to use these. Sales Lab did a blog. I think it was five years ago. They were early on this Achieve to Advance promotion path, or Micro-Promotions. And so it’s like simple SDR 1, 2 and 3. Or Associate Senior Principle, or whatever you want to brand them. But basically they are tiered levels within the sales development function so that they get excited and feel like they’re advancing, and that they have control over their own professional development. That’s how we get people and keep them in seat longer. If it‘s just flat there’s one version of an SDR. And the only way to move up is to get to account executive. We see that this typically leads to faster burnout, to people getting a little bit more eager.
And there’s also a lot of competition for talent. I know COVID has impacted that somewhat. But there are so many people and there is so much demand for the sales development function at this point. When you get to six months of experience you shouldn’t, but some people do jump and leave their companies because someone will give them an AE role.
Bryan: Yeah. And that’s curious, right? So do you see this SDR becoming a hybrid of SDR/AE, like a virtual sales rep because they get some experience? They can go further down on the pipeline. Do you see anything changing from there? Are you hearing anything about that?
Kyle: Yeah. People try it. I wouldn’t do that. (Laughter) I think that role specialization has added so much efficiency to the sales process. And if you try to take a junior SDR, (I’ll use myself as a perfect example), I was an SDR. I was booking meetings for customers. And then the company I was working for gave me an opportunity to close some deals for that organization.
The second they told me that I could close I stopped paying all attention to being a sales development rep for anyone else, because you’ve never done it before. You’re really, really excited about it. You know that’s what is going to get you to a super-high earning potential. That’s the next step in your career. So as soon as you open the door to say that you can start closing some smaller deals, or whatever,--you can take some of your own appointments through to close,--the amount of attention and effort paid to the sales development aspect of their job completely goes away. All they want to do is close at that point.
Bryan: Interesting; okay. So okay, let’s face it. The sales development top of the funnel outreach is likely one of the most difficult things to do because let’s face it. It is oftentimes not a pleasant experience.
Kyle: You take in every single day.
Bryan: Oh, every day. And unfortunately it’s not like coding, right? I can’t put in the proper code. Even if I have the right message on the right platform at the right time, if that person is in a bad mood that day, you know, it is just not a pleasant experience. So it can be a bit challenging. So I can see why they do that.
Okay. Now let’s talk about this next one, because this next one is heart-stopping. 3.2 months to an average ramp time.
Kyle: Yeah; that’s flat.
Bryan: Oh! So how in the world can we shorten that down? Because I’ve seen shorter tenure. I can’t remember the study about shorter tenure. But if they’re 1&1/2 years—and that’s more on the enterprise space,--so if I’m at a smaller transactional, do you have any sense of what a tenure would be on that smaller transactional stuff?
Kyle: Yes, nine or ten months.
Kyle: And so what we start to measure is exactly where you’re heading towards. It’s the months of productivity.
Kyle: That’s the number one metric we look at. So if you zoom out, and you’re not evaluating the performance of an individual SDR, but you’re evaluating the performance of your sales development function—your whole team, however many people that is,--the month of productivity is the number one thing that typically says whether this team is successful or not. So 1/&1/2 years of tenure minus three months of ramp, as we call it, means that you get one year of productivity for every SDR. And so if you can find ways to make sure that stays at a year, or maybe goes to 13 or 14 months, all of a sudden (the how or why) of your sales function as a whole really starts to dramatically increase.
If you promote at six months, which a lot of companies do, that means that you may get three months of full productivity out of that individual, and you’re just constantly ramping people, the how or why of sales development becomes a lot more difficult to realize when that starts to creep down.
Bryan: Interesting. So I’ve always couched this to average sale, right?
Bryan: Because it looks at profitability—average sale, the average lifetime value of the customer. So you’re saying that not only should we look at that, which is important, but then really look at the tenure of that team member, because if you start to see a lot of turnover, you’re never going to see full productivity and then full optimization.
Kyle: Yeah. Say I have an eight-person team.
Kyle: If one to one-and-a-half—whatever—one to two people on my team are basically constantly in ramp, and producing twenty, forty, sixty per cent of a fully ramped person, it’s going to be really difficult over the course of a whole year for that sales development function to produce what they should. The average is tow-and-a-hall million in a sourced pipeline per SDR per year.
Kyle: So if I’m trying to get my team to be at that average, but I’m just constantly ramping people, and my legs are being cut up from under me by my own company because they just keep poaching my best,-- And the other thing is that it’s the best SDRs who get promoted, right?
Kyle: And so as soon as I get somebody to the point of like yes! This person is going to get the team as a whole to the number, boom! They get plugged. And now I have a junior person to replace them. So just like that I went from the best person who is getting me the most meetings and sourcing the most pipeline, and the person who comes up behind him who just got hired. So there’s a huge gulf there in productivity between those two, which makes it really difficult.
So this can’t be controlled by sales development alone, because you just don’t have the control. It has to be the whole sales function. So you have to make sure that you have protections in place. That’s where that Achieve to Advance model works really, really well. The AE leadership team, whoever is that next level up from you, is in agreement with the sales development leadership team on minimum requirements to actually start plucking from sales development. So you can’t just take people the second you think they’re good, or you like them, or when you think they have good months. You can’t just take them at that point.
And then it’s the same thing on the recruiting side. The code changes a little bit. Those are really, really hard to attract the best SDRs because there’s so much competition for that talent. And so what started being really popular in introducing job descriptions was, “We will promote you really fast.”
And that’s a great sales pitch. I want to go work for that company. I’m only going to have to do this SDR job for a little bit. And then they’re going to put me in an AE seat. And that’s how recruiting teams have written that in job descriptions. It’s how people had their expectations set in the early stages of the recruiting process.
So then I’m sitting there. I’m six months in the role and I’m ready to be promoted; this is why I took the job here. You said I was going to get promoted fast. And then we have all that tension. So it’s not just sales development. It’s recruiting—setting appropriate expectations on the front end—investing in the team, making sure you have a tiered model, that you have the enablement to train them and make them feel like they’re growing. And you have a sales team who is on board with your goal to keep them in their seat for a year or a year-and-a-half.
Bryan: Okay; got it. So you do everything to keep them there a year or a year-and-a-half. Now this is another piece that just boggles my head. Forty-five dials a day! I’m going on the far right—top challenges, productivity and performance, yes. Forty-five dials in a day; oh, my gosh!, right? So is that consistent? I mean, there’s so much stuff out there right now where I can ramp that sucker up. I mean, are we still seeing that forty-five? Is it improving? Is it getting worse?
Kyle: That being said, forty-five is the average, and still is now; I think that maybe it’s forty-six. Same thing.
Kyle: And so that makes up roughly 50% of the total activity. So total activity is still up in that 90 range.
But that being said, I have customers right now whose reps are in the 120-130 total activity count per day. I have reps who are doing thirty activities a day.
Kyle: And so it’s all over the map. Forty-five is still the average. Yes, they have sales engagement technology. But what they have to put into their messages has also dramatically changed.
So when I first started eight years ago it was still very much, at least with the methodology of the company I was working for, was basically dial for dollars. The activity has to be there.
Now, even with all the activity being there, you just don’t get the same pop coming back to you, because there’s so much noise. I looked at some HubSpot data recently, out of their CRM, their email volume. So total center volume has doubled since COVID. And I don’t know about you, but I’m feeling it in my inbox. So I see how much that email volume has increased. I think I’ve seen researchers that say that the average executive gets 257 emails per day. So there’s just so much noise out there that it’s difficult to break through to get someone to listen to you, which means that now, if you’re a sales rep, I’m adding a human element to the process.
So your only value ad is some level of personalization and customization of that message, which limits how much you can do on a given day if you’re personalizing your voice mails, your social touches and your emails. So in my opinion that’s what’s keeping it down to that forty-five number.
Bryan: Got it. Okay, so that forty-five number is high customization, high relevancy. And I have this up on my screen here. So again, if you’re on the YouTube channel, or you can check it out through HubSpot. Just give a little HubSpot COVID data. This right here, Kyle, is what you’ve been talking about. I mean September 14, that week it was 98% above the pre-COVID era. And one thing that was kind of surprising me is that you’re starting to see these outbound attempts on dialing; it’s starting to pop up. So you’re up 20% the week of 9/21, versus pre-COVID. So it’s starting to come up a little bit, because nobody is answering their emails anymore because we’re just getting overwhelmed.
And I can’t remember who I was talking to. But you know, even LinkedIn is getting pretty spammy from a prospecting approach. I mean, with all of this AI I had to put in what-do-you-call-it?, imogies in my name so I know whenever something is AI in me, versus somebody reaching me cold or reaching me specifically. But forty-five dials, though. So you’re saying that even with that low count they’re averaging twenty-one appointments a month. Is that quota? Oh, that’s quota; that’s not actual. What’s the likelihood of them hitting that?
Kyle: High 60% of reps—67, 68% of reps will achieve quota.
Kyle: Twenty-one is an average based off of companies which use an introductory meeting model.
Kyle: They’re able to find introductory meetings, which would be the right person and the right company willing to take a call.
Kyle: A real low bar for the meeting. That’s where we see that number going to that twenty-one range. And that’s basically one a day; they book a meeting a day.
Bryan: Exactly. And now even with all of this automation, even with the different tools, that one a day should be expected?
Kyle: So if I was a company setting goals for my team I would work backwards off of pipeline. So I would start with the $2.5 million in pipeline. Consider what that means in terms of your average deal size so that you know how many actual opportunities you need. And then think about what your meeting-to-opt conversion rate is likely to be. I think that’s 50 to 60%. That’s probably a fairly reasonable number. Then start to work backwards to get to how many meetings that would be on a monthly basis, to get you back down to that $2&1/2 million in pipeline per SDR per year, having started with the meeting count. Some of that is easier to do. But it’s really utterly dependent on your average sale size.
If you have a 100K average ticket price, you’re very unlikely to book twenty-one meetings a day. So maybe your number is closer to that eight-to-ten range. But if you have a $10,000 ARR product, maybe your number is 28. So I think you really need to think about what the pipeline expectation is, and start to work your way up from there.
Bryan: Interesting, okay. And so by the way, if you’d like, we have a whole, entire calculator. Feel free to reach out to me and we can kick that calculator over to you so you can reverse engineer, like Kyle said. What’s the outreach—the number of engagements and conversations—conversations to booked meetings, kept meetings to pipeline opportunities, and then pipeline opportunities to a closed 1. So if you’re able to reverse engineer that, and I say, “Hey, I need --- closed ones in a month,” well, I just reverse engineer my activity level. So that way I know how many meetings booked and kept that I need. Therefore I know how much outreach that I need to do. Therefore I know the size of the team. And I can just use all of these numbers and statistics that you’ve given me to build up my whole entire sales structure. I mean, that’s really what you guys are doing.
Kyle: Yeah. And so I’m going to go back to one of the first questions you asked. Why and how do people use this? And so what you just outlined is so important. It’s knowing the metrics from top to bottom.
So how do we get from forty-five dials down to revenue, and all the different check points in between? What this data does is that it allows you to decide just where you need to focus and put emphasis, because the answer can’t always be “just do more.” So if the answer to improving how much revenue you’re realizing from both efforts, SDR or AE, is just to make more calls, that’s not going to be well received by your team for very long.
Bryan: Right. (Laughter)
Kyle: You may be fatigued if you’re just up there cracking the whip. But what you can do is understand which of those conversion rates. Do I have a connect/rate problem? Because you have at least an idea for what an average connector would be based on this data. Do you have a meeting held rate problem? Do you have a conversion of needs opt problem? Where is your biggest issue when you look at that full funnel of conversion metrics as compared to bench marks? So then you can, as a front line leader or directoral type person, double-click in to say, “How do I now fix this?” And so I think this is what that data provides. It lets you know where you should focus, because it lets you know where other people are against where you’re at.
Bryan: Yes. Now forgive me. Where do you have the conversion rate of outreach?
Kyle: It’s not on the Periodic Table. What it is then is that it’s the SDR Metrics and Compensation Report.
Kyle: It’s long. (Laughter) But there’s a lot of data in there. But what I would say is—and I haven’t seen the 2020 data yet,--but just from working with my clients, as you would imagine, the connect rate is not so good right now.
Kyle: With everyone working, with that email increase, everything that we just talked about, with connect rate right now we’re still struggling to get four to six per cent. Historically, a seven to ten per cent connect rate is what we would have expected a long time ago. And now it’s four to six and we’re like, “Aaaah!” (Laughter) It’s out of our outreach, resulting in a meaningful conversation.
Bryan: Yes, because it seems like at pre-COVID it was in and around there. And then post- we were doing okay there. But it’s gone down and gone down. And right now I’m not sure if you’re finding the same. But it seems like it’s harder and harder to get good data, because what was good data, what was validated with ten million people out of work, (and unfortunately we’re seeing second rounds of layoffs here coming down the pike too), it seems like that’s even getting more difficult. And then with those that are engaging it’s even a little bit more of a challenge to get them engaged because they’re like “Whoa, whoa, whoa! We have so much stuff going on!” But you know, it’s a real curious thing, which makes me wonder that forty-five dials to twenty-one meetings quota. 60% are keeping that. You might need the activity up. You might need going to this productivity and performance, which gets into that recruiting and hiring. Do you have the right talent? Forecast accuracy, which is going to come from right data in place. I mean, data has always been important. But are you seeing the importance of data even being elevated further than what it was previously? What would you say from a data perspective, Kyle?
Kyle: Without a doubt. So we could, in the past, fall back on relying on the people doing the outreach to navigate a phone tree, or to call around and ask for referrals, or whatever. Now no one is picking up the phone. So if somebody does pick up the phone it needs to be the right person.
So Trish Petruzzi, my boss and the Bridge Group CEO, has said for a long time that she would trade head count for data—good data, that is.
Kyle: So if you have a limited budget, I would really strongly consider, if you are going to max out your head count with that, or if you’re just going to invest more dollars into your data resources—somebody like a Zoom info or something like that,--to make sure that the team that you do have in place has the best possible data so that they can get access to these people. A lot of the data vendors now, and rightfully so, are focusing on a percentage of minimum direct dials. A lot of them are getting good with mobile numbers as well. And so leveraging those has been super impactful in how we’re fighting back against the low connector in a little bit. But yes, I could not agree more. I mean, data has always been really important, and I would trade head count for data. But it’s even more so now.
Bryan: Yeah. And the curious thing is that we found this recently. I’m not sure if you’re seeing this, Kyle. People are saying, “Hey,. We have directives. We’re not allowed to give out information.” So they can’t even give you introductions to some of the folks. That’s not the most common. But I’m seeing more and more of that as I’m on the phones with my team doing this outreach. They’re not even allowed to tell you who to reach out to sometimes. Now that’s been another segment.
Okay. So, my gosh!, I could talk about this all day. And I didn’t realize the time here. So let’s kind of start wrapping this up.
Definitely check this out. Forty-five dials a day. When you’re being a lot more strategic, a lot more relevant, trying to get about twenty-one discovery calls or exploratory calls per month—about one a day; call it one a day, a little bit more than one a day. But that’s going to be based upon your average deal size and everything else. Look at all the reports that are on the Bridge Group so you can really break this down. But there’s just a lot of good stuff here.
Let’s talk about these challenges really quickly. We have productivity and performance. One thing that you’ve seen as the biggest impact of how we can overcome productivity and performance; a shameless plug on your part, coming up in three, two, one, go. (Laughter)
Kyle: From a productivity standpoint actually I would go to the tech first. From a productivity standpoint I’ll hit on that data piece again. If people aren’t hunting for the contact information to get to the right people, or even find the right titles already served up to them in their CRM, they will have a lot easier of a time achieving higher productivity. And if you invest in something like a sales engagement technology, make sure your sales force is clean and that it’s not a nightmare. So I would invest in the tech stack.
And then, additionally, making sure that you’re enabling them, so they’re not having to decide what to say and who to say it too all the time. And you do all the work on the front end, developing something like a sales play book, so that when the rep sits down in his seat and they start making calls, they’re just in execution mode, and it’s not like “How should I manage this prospect? What do I say to him? How do I know what to do next?” It’s all been figured out for them. And they just have to execute on the plays. So I would say those two things in terms of overcoming productivity and performance.
Bryan: Yes. And since Kyle was nice and didn’t think of a shameless plug, that’s one of the things that the Bridge Group does. They build out those play books and help train to those play books. So that’s the productivity and performance; I love that. So tell them how to do it, teach them how to do it, and then give them the tools to do it.
Recruiting and hiring: any best practices that you’re seeing there?
Kyle: Recruiting and hiring just got a lot easier unfortunately, right? (Laughter) It’s an unfortunate positive occurrence from everything that we’ve seen. That’s starting to swing back again. But we saw posts that used to get two applications, because you can see it on LinkedIn, right? It shows how old the post is and how many people have applied. We would see a one-week-old post that used to get two applications. In the immediate time period after the so-called post-COVID era we’re seeing one-week-old posts with 200 applications.
Kyle: So I think there’s more volume coming in. Just be conscious of your job descriptions. Sell the rule a little bit. Treat your hiring funnel like a sales funnel. And have a defined process to go from all your applicants to the people that you’re actually going to make offers to.
And just care about it. I know that sound silly. But too often people will interview people and then just go dark on them and not get back to them. Be great about your communication process. Invest in that; treat it like a sales process, because it is. You’re selling somebody to come and work for you, from the way that the job post is written to every interaction they have with HR front-line management and potential peers.
Bryan: Yes. And just like Kyle has pointed out on the sales side, the recruiting and hiring side, it has the same sales enablement, if you will. You know, you have the CRMs. You have the assessment tools. You have the productivity tools like on-demand video interviewing and all these different things.
It’s my belief, right?—that’s why it’s the Talent, Sales and Scale Show,--that if you don[‘t have the right talent, I don’t care how good the tools that you have. It’s just bad talent doing a really poor job more quickly. So we really have to have a nice, blended approach here.
And then with forecasting accuracy I think that we nailed that one. If you have the right tools in place with the right data that’s going to give you the forecasting ability, if you’re doing the math of sales and knowing how you’re doing against the bench mark.
Ramping new hires. We really didn’t hit that one at all, Kyle. Any suggestion there? I mean, have you found any ways of decreasing time to ramp?
Kyle: Yeah: role-specific onboarding. No one likes onboarding. It’s not a super fun part of anybody’s job, unless you’re dedicated. If you’re a bigger company they have teams that are dedicated to this. Exclude them from the conversation for a second. Think about people who are a little bit leaner and need to be more nimble in their approach. You still need to define dedicated role-specific onboarding plans. If you try and jam an SDR into a typical AE onboarding, it’s just not going to be right if some of the information is relevant but not all. So it needs to be role-specific, and contain information that is going to be helpful just for their job function.
So we don’t need to necessarily train them on every single aspect of your product or technology in the first two weeks. Maybe you can mix a layer of that stuff in later, and give them what they need to do their job today as they can get on the phones. And then layer more training in after.
So I would say specifically for sales development, make sure that you have sales development onboarding built specifically for them. And space out some of the training for later because they don’t need it right now.
Kyle: Let them get on the phones sooner. And then bring in more knowledge after they’ve been able to maybe make a couple calls and talk to a prospect, and then come up with some more intelligent questions.
Bryan: Yeah. I’d say this. I’d also encourage the founders, owners, leaders, sales leaders listening to this. What do they need to know? By when? Where can they find it? And how are you going to test that they know it and can apply it? Right? So if you do those four pieces, then I would really interview your current team. “Hey, what do you wish you would have known, and by when?” You can put a whole, entire play book together for that training and onboarding, and testing them against that, right? So that’s a critical key piece there, especially if you only have a year out of them, if you’re lucky. And that’s going to directly impact the RLI of this whole, entire development piece. And you might want to make sure that we’re focusing in on that.
All right. And then lastly,--
Kyle: Hold on; I’m sorry. One other thing on the ramping.
Kyle: Also get them out of the conference room. I know people aren’t in offices right now. But get them out of the conference room. So that apprenticeship type approach, like call shadowing, watching somebody else who does the job that you’re about to do, doing it their way, can be super helpful. If 100% of your onboarding takes place inside of a conference room it’s more difficult for that person to actually ramp effectively.
Bryan: Interesting. And a lot of these technologies that we’re talking about—these sales enablement tools—you can dial together even if they’re remote.
Bryan: There are all kinds of different ways of doing it. So I really like that,. Right? Whenever I was in the military, o. j. t.—on the job training, right?, because they’re going to get a lot more out of that. And for the management and the leaders what I’d really suggest is, you do it. And suck it up, right? You do it. Self-critique. Do it again. Have them critique you. Do it again. And then have them do it, and you coach them, right? So make sure that you can walk the walk. I don’t think you can ever really get away from that. Just suck it up and get it done.
And then lastly, the coaching and development. And I’m surprised about this coaching development, because oh, my gosh! Everyone’s like a coach these days, training out to yin-yang. I have free stuff on LinkedIn; everyone’s training. I saw that something like 75% of all training is ineffective. So what should we look for there as a former trainer, right?
Kyle: Yeah. From a coaching standpoint, (and I hate to keep going back to technology; it’s not a magic pill.) But I mean, the Gongs courses, Exec Visions of the world, the conversation intelligence platforms have completely changed how we coach. It’s no longer that you’re just wandering around the cubes and you wait to hear somebody say something stupid. (Laughter) And you go over and coach them on how not to say that same thing again. Now you can really dive into every conversation and do it with the reps. I’ve heard the game tape analogy. But you analyze the game tape and identify how you’re going to improve going forward.
All right. So conversation intelligence has completely changed this in my mind. But also just build it into the budget. So I’m not saying that you need to use an outside firm. If you want to hire an internal trainer, great. If you want to hire an outside trainer, fantastic! But build training and ongoing enablement into the budget in some way, shape or form, because the butts-in-seats approach is just not the right long-term strategy for your organization; I can promise you that. So build it into the budget and invest in it.
Bryan: Listen. I really love this stuff here. So tons and tons of great information. So as we’re winding down here, I mean, you’ve given us so much. Is there anything that we can learn from you, Kyle—lessons learned, times that hurt? What challenges have you overcome that you want to share with us around understanding the numbers, sales development, all of the things that you’re working on? What can you teach us so that we won’t have to go through that same pain that you have?
Kyle: Yeah. I would say look at the bench marks with some set schedule. I don’t care if it’s quarterly or monthly or every day. Know your numbers. And feel really confident in the knowledge and the quality of the data in your own numbers. And then at periodic points in time reference them again, whether it’s our research or any third-party research, to see how you’re stacking up. But stay focused on your team and the numbers that you’re seeing. But really focus them only as a means to direct coaching or training or development or process changes—whatever.
Don’t just look at the numbers and think about them as “Oh, we just need to get better here.” Then the metrics tell you where to focus. That’s it. So once you know where to focus, then you have to do the actual hard work of identifying how you can actually improve your different conversion rates.
Bryan: Yes. So let’s hit on that, because it’s critical, right:? If my outreach to engagement, my outreach conversation, is low as can be, it’s one of two things. It’s going to be the list, or it’s going to be the message to that list, right?
So that’s going to be one piece. And then my engagement to meetings book, that’s likely going to be the messenger who is giving the message, or the message again, right? It could be potentially a list. But that’s more at the engagement level.
And then if I’m getting meetings, but they’re not keeping, that’s either going to be the messenger. Or something is going on and maybe you‘re super-monetized,--
Bryan: Yes, qualification.
Kyle: And you ask key questions. Did they even want to be in the meeting?? Or did you just hustle them into it, right? That is when we see the meetings typically falling off.
Bryan: Yeah, correct, because if you have the commission breath, if you’re pushing so hard for the meeting, they’re going to take it just to get away from you, and they’re going to no show. (Laughter) So you hear that 100% all the time.
And then pipeline management. Are you setting good expectations across the way? And so know your numbers and what they mean; they tell a story. So that’s really good.
All right. So resources that you would recommend that we should be reading, listening to, watching. I mean, what are some resources you might suggest?
Kyle: A lot of podcasts. I used to read more blogs. Now I’m podcast-obsessed. It’s probably not a good direction to be going in. But I really like John Barrows’ podcast; his is another great one. Outreach and Sales both have good podcasts out there. And then from us be on the lookout for the 2020 SDR Metrics and Competition Report. I’ll check in with Matt later this week, but it will be out within the next six to eight weeks. That should be my assumption. So be on the lookout for that. And if you subscribe to the blog then you’ll get instant notifications on The Door. And we don’t spam our blog subscribers.
Kyle: We just basically deliver the research. It will be ready soon. So you can get the updated numbers and see what other people are doing out there.
Bryan: Great; I look forward to that. And then what does the future hold? I mean, what trends do we need to be aware of? What should we be watching out for? What’s going to come up and bite us on the back side?
Kyle: One of the things that we talked about is just keeping an eye on that SDR tenure. So I have to keep referencing Matt. MattPetruzzi on our team did some research last year on the failure rate of SDRs who are promoted too soon. And the too soon rate seems to be somewhere in that 15-month range.
So we know that you want to invest in your people. We know how hard it is to find good AEs. And internal promotions are a great talent pool for your future AEs. But find ways and build infrastructure around them to keep them in for long enough. If you don’t, that’s the thing that’s going to bite you. And at some point in time, the COVID era has increased this even more. But we’re seeing it even before. The CFO is going to say, “We’re spending a lot of money on sales development.” As a whole, again starting to look at your whole team. And if you’re not sourcing enough pipeline that’s leading to revenue from that whole team investment, you’re going to be in some trouble. And they might say, “Why do we need sales development?”
And so just protect yourself from that. Make sure you’re focusing on those months of productivity. Otherwise that will bite you; that’s a promise.
Bryan: That’s some sound advice there. Well Kyle, you’ve been a great, great guest. I can’t thank you enough. So who should reach out to you, how should they do it, and why should people reach out to you and your group?
Kyle: Yeah. Anyone who wants to talk about anything in sales or sales development, feel free to reach out. Our focus is primarily on the technology space. That being said, for anyone who wants to talk sales or sales development—problems that they’re having, issues that they’re trying to overcome,--we’re always available as a resource. If that leads to formal engagement, fantastic! If not, I still love having those conversations. It is up on LinkedIn—Kyle Smith on The Bridge Group. Or you can contact us on our website, I guess. It’s pretty easy to get in contact with us.
Bryan: Yeah. Good. And they’re all over the place between Trish and Kyle. Does Matt post stuff as well, or is it mostly—
Kyle: Oh, yes.
Kyle: Matt posts on the blog pretty frequently. He wrote a book on developing, or I guess he would say building out sales force lightning experience, specifically for sales development, to help improve their efficiencies on that side.
Bryan: Awesome! What’s the name of that book? (Laughter) Since he can’t see it, he’s reaching back to his pile of—
Kyle: Lightning Sales Off.
Bryan: Okay, perfect. Lightning Sales Off by Matt Petruzzi.
Bryan: Cool. All right; love it. Well Kyle, I can’t thank you enough for you time and expertise, for all the great stuff that you’re pushing out there. So on behalf of Kyle Smith and The Bridge Group, this is Bryan Whittington with The Talent, Sales and Scale show, signing off. Get after it. See you.