There are no "objections". There are only business concerns, and it's our job to figure out if they're legitimate or not.
"Hustle", they say. "Grind", they say. You have a software product or a service, and you want to grow it. So you sit at your desk, wondering where to begin. Adwords? LinkedIn? Hire a PR firm? Commission-only salespeople? Suddenly, the word "telemarketing" pops into your head, and frustration takes over.
When I was halfway through my tenure as the Director of Sales @ inDinero, then a fast-growing Silicon Valley tech company on the Inc. 500, I was an AE Manager who stepped into an SDR team that was setting an average of 7 appointments per month per rep, to one that was setting 21 appointments per month per rep. Even while simultaneously increasing variable compensation, we were able to triple the overall ROI of the team in several weeks.
Here's how we did it!
In Part 1, we talked about how to use the ACV generated by an SDR to determine whether outbound SDRs are a good investment. But, for companies that sell a sticky product with a high Customer Lifetime Value, ACV alone doesn’t take this into account! Even so, future years’ cash is not as valuable as this year’s cash.
In Part 2, we'll talk about how to enrich our ROI analysis with Discounted Net Lifetime Value, or "LTV", to strengthen the business case for or against hiring for, or expanding, your SDR team.
As someone who’s built or helped build multiple Sales Development teams, I wanted to pass along the formula that I use to estimate whether an SDR team will be a good investment for a company.
If you’re coming into this from outside of the SaaS world, SDR stands for Sales Development Representative: an inside salesperson focused solely on prospecting and setting up opportunities for an Account Executive to close business.
Here's the quick and dirty ROI analysis!