Plan Proper SDR Incentives
Before hiring your first SDR (Sales Development Rep), you should have a plan in place to focus them on the activities and outcomes that are important to you. It often proves difficult, in practice, to create incentives that are in line with your organization’s goals. Think carefully about how you will motivate these new and vitally important members of your sales team.
There is not one right way to structure your team’s incentives, but there are a few tips that will benefit most sales organizations considering an outbound effort:
- Before making your first SDR hire, have an outbound process in place. It doesn’t need to be polished, but it is unfair to expect a new rep to figure it out on their own. If you fail to provide sufficient structure, your best reps will be the first ones out the door (adverse selection is a bitch in sales).
- Be careful who you hire. The fact that SDRs are often entry-level employees does not mean you should go with the first candidates who apply. The opportunity cost of making a bad decision can be huge.
- Manage expectations early in the process. Let every potential hire know how long they will be in the SDR role before promotion to AE. I prefer creating a clear path from Inbound SDR to Outbound SDR to Account Executive that takes 12-18 months.
- Hire at least two SDRs at the same time, especially if your team is new to outbound sales. It is impossible to know how well (or poorly) a new rep is doing if you don’t have a basis for comparison. If you hired the right reps, then having competition will be a huge motivator.
- The first few months should be a calibration period for you and the new reps. Do not set any specific goals until you know what is attainable. The chances of you getting it right blind are slim. If you set the bar too low, your reps will get lazy. If you set it too high, lead quality will suffer.
- During the calibration period, pay SDRs base and a flat commission for each qualified opportunity. Create a clear definition of “qualified” opportunity to avoid confusion. After a few months, you will have the data necessary to set goals that are fair.
- Add quality-based incentives to your flat commission. One way to do this is to create quarterly bonus based on the value of pipeline (or closed business) that an SDR creates for your closers. This will motivate them to think about the size and quantity of leads.
By following these tips, you can set you and your SDRs up for success. This also significantly reduces your chance of wasting money on an inefficient and disorganized outbound effort.