Sales Development teams are struggling every day to hit unreachable goals. I saw a great post by Max Altschuler on LinkedIn about how many SaaS companies are throwing SDRs at low ACV deals, and wanted to share my take on it.
While this may be an attractive way to steal market share if your team closes deals, it may also be a way to educate your buyer with no results if you don’t close. At PandaDoc, we created an outbound SDR team to move up-market. We booked a lot of meetings, but not many of them converted to closed deals. At the same time, tons of inbound leads were coming in that consisted of lower ACV (average contract value) business from prospects ready to buy after a demo.
How Do We Pivot?
We had to ask ourselves why we were trying to go up-market when there was so much potential in transactional sales. The decision was to pivot and create a VSB (very small business) sales team that focused on this segment of customers to close business quickly. Top SDRs got promoted into this role as full cycle account executives that booked their own meetings from the inbound leads. They were also asked to qualify all of their own opportunities, and run short sales cycles.
The results we got were pretty impressive. We determined that our break-even was $12,000 ACV per month, per rep. By the end of the first quarter, the average rep brought in over $20,000 in business. We even found that some reps exceeded $40,000 on a regular basis. The experiment was so successful that the company eventually pivoted most of the sales team to focus on this model.
Are There Exceptions?
Having SDRs go outbound with low ACV MAY work if you have:
- An extremely viral product.
- Great marketing that can support your team from the beginning.
- Good sellers that can close outbound.
- An appetite to purchase market share.
My advice? Don’t do it! But if you decide to try and make this work, it has to be executed flawlessly. That’s hard to do, especially for new teams and people who have no leadership experience. What you can do is get meetings via inbound, or have your product self-serve.
You should also consider outsourcing it to someone elsewhere a tight SLA can work. For example, we won’t continue if your cost exceeds $950 per meeting. You should also consider finding a reputable appointment-setting firm before trying to scale an inefficient process.
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