At most organizations the Sales Development function has always rolled up to Sales. It’s logical. SDRs log activities in the Sales CRM in direct support of Account Executives. Whether they call it an apprenticeship or call it paying their dues, most SDRs take the job as a stepping stone to a career in Sales.
That said, an equally sound argument can be made for SDRs to report to Marketing, as they form the bridge between Marketing and Sales and often play a crucial role for the former — for example when executing strategic marketing campaigns. Over the past year, many organizations have indeed begun shifting SDRs under the umbrella of Marketing.
So, which should you choose?
Below are 5 questions you should be asking yourself as you consider this shift:
1) Are SDRs the best use of Sales’ budget?
SDRs are often seen as a cheap alternative to Account Executives. Why pay a premium to have closers make cold calls? The model has been widely embraced because it works.
But make no mistake, it’s not cheap. Once you account for SDR overhead (office space, benefits, tools and a manager) the cost per SDR seat in the neighborhood of 100K.
20 SDRs at $100K/year = $2M hit to the sales budget that has no direct link to revenue creation.
Let that sink in.
2) Are your SDRs spending time doing administrative work?
Ideally your SDRs are spending as much time as possible engaging new prospects. In reality, however, the job entails quite a bit of administrative work.
According to the 2016 Bridge Group report on SDR best practices (looking forward to 2018), 32% of Sales Development Leaders cite list and data sourcing as their biggest challenge.
In most organizations, SDRs spend no less than 20% of their time checking for duplicates, verifying that contact details are accurate and disqualifying “bad leads.”
Interestingly, a 2017 report by the Marketing Technology Industry Council identified data management is one of the functions B2B marketers struggle with the most. Either way, by the time a prospect reaches Sales the data really should be in good shape, so arguably such data management tasks fall firmly within Marketing’s remit.
If your SDRs aren’t spending spending a lot of time on these kinds of tasks, it’s probably better to keep it that way and have them focus on supporting Sales with outreach to prospects. But if they are, the question then is whether that’s how you’d like them to spend their time. Here it all boils down to priorities; if yes, then having your SDRs report directly to Marketing could be a good idea. Such an arrangement would help Marketing and SDRs to support each other, and more generally help ensure your organization’s data is aligned.
3) Is your SDR compensation arrangement aligned with Sales objectives?
Of course, the term “bad leads” is completely subjective. Demand Generation bang their drum that the Glengarry Glen Ross leads have arrived and Marketing Operations will proudly confirm “there are a so many Marketing Qualified Leads from this campaign!”
All too often, though, the meetings never come. The money has already been spent on the campaign, but the MQLs never materialized in Sales Qualified Pipeline.
That’s when the cliché back and forth between Sales and Marketing begins. Any salesperson will tell you that there is only one KPI that matters — and if you have to ask what that is then you’re probably not a salesperson.
So, in a way, SDRs being compensated on generating SQP is more in line with Marketing objectives than Sales.
4) Are you leveraging your SDR feedback loop?
Eventually Marketing Operations runs the analytics on campaign effectiveness at the macro level, but the devil is in the details.
All too often the SDR function is siloed from the Marketing team. As such, the granular details about how the campaign could have been improved are never relayed back to the marketing team that could use this information to tweak future campaigns.
This could be a massive missed opportunity.
That doesn’t necessarily mean that SDRs should report to Marketing. There are other ways to ensure better communication within your organization, and simply moving SDRs to Marketing could just be a way of avoiding fixing your Sales-Marketing misalignment problems.
On the other hand, it’s definitely something worth considering.
5) Would you trust a bank teller to handle your long term financial planning?
SDRs have one of the most challenging and important jobs in the entire company. And yet, more often than not, they are also the least tenured members of your organization.
Sure, they make up for inexperience with grit and charisma, but Sales leaders that are focused on retiring quota don’t have time to invest in SDR messaging. To make things worse, most SDRs managers are green to management and are being pulled in many different directions.
In the absence of prescriptive instructions, SDRs will shoot from the hip on who to prospect and what to say.
Working more closely with Marketing could be a great way to help SDR teams refine their messaging. On flip side though, since SDRs are the ones actually handing leads to Sales, they need to be equally aware of what Account Executives are looking for, as they are effectively the last line of defense against unqualified leads making it to Sales.
So: Marketing, or Sales?
In conclusion, there really is no set-in-stone answer to this question. At a time when organizations are doubling down on the Aaron Ross Predictable Revenue model, it’s certainly worth investigating which cost center SDRs should be tied to.
If you are a Sales leader that doesn’t want to concern yourself with SDR output, then maybe the SDR team should report to Marketing. Conversely, if your SDR team has little to no interaction with Marketing then they should probably stay under the Sales umbrella.
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