Old Fashioned Tape Measure

If you followed the checklist from part one of this post, you now have a clear strategy for your sales and lead development efforts. You have decided on either SDRs or LDRs, or both; and you know what the objective of each is. You should have a clear understanding and agreement on who does what, and have determined what kind of people you are seeking to fill the roles.

That’s a good start, but don’t let your efforts stall due to inattention. A common mistake is not actively managing these teams. LDRs and SDRs need consistent management, just like sales reps do. Here are the six key steps in managing and measuring your teams.

Set Quotas – Just like sales reps, LDRs and SDRs need quotas. As the sales legend Zig Ziglar says, “If you aim at nothing, you’ll hit it every time.” I recommend that LDRs should have a meeting quota or qualified lead quota, and SDRs have a meeting quota. Calculate quotas by first setting an overall goal for the LDR and SDR team – for example, 10% of all leads are meetings set by SDRs – and then dividing that number by the number of SDRs. The divide by four so you have a quarterly target. You may want to ramp the quarterly number for new LDRs and SDRs.

Importantly, you need to tie the quota to compensation. I strongly recommend that you set up a variable comp plan for both LDRs and SDRs. It incentivizes the right behavior, and is good training for those looking to graduate to an account rep role. The percentage is up to you, but 80% base and 20% commission for LDRs feels right to me. SDRs might have more at risk – say 60% base and 40% commission. Then divide the variable comp by the number of meetings, and that’s how much the LDR or SDR gets paid per meeting. I think it’s great to make it real so they know how much every meeting is worth. I also think it’s a good idea to have accelerators that kick in once they hit 100% of their quota. So a meeting that’s worth $100 up to 100% of plan, might be worth $125 up to 110% of plan, and $150 up to 125% of plan.

You can also set a mix of meetings and revenue for SDR compensation. That way, SDRs make more for sourcing good opportunities. The split is up to you, but 50% on meetings, and 50% on revenue is a good place to start. You may need to experiment a bit.

Determine Daily Tasks – Let’s say that your LDR needs to set up 50 meetings per quarter. How many emails should they send? How many phone calls? Should they call and email? As a manager, you need to be prescriptive about activity, and you need to manage to those numbers.

A good place to start is with industry benchmarks. Open View Venture Partners has a good set of sales benchmarks for lead and sales development teams. Two metrics, in particular, are important: Call-to-Conversation Conversion Rate and Conversation-to-Appointment Conversion Rate. Compiled from an analysis of several reports on inside sales performance, “Measuring Up: 9 Sales Benchmarks that Can Help Expansion-Stage Companies Build a Scalable Sales Machine” has the average Call-to-Conversion rate at 9%, and the Conversation-to-Appointment rate at 23%. So, continuing our example, to get 50 meetings, an LDR needs 217 (50 ÷ .23) conversations, and needs to make 2411 (217 ÷ .09) calls. For a 13-week quarter, that’s 185 (2411 ÷ 13) calls per week, or 37 calls per day. Armed with these numbers, you can manage their daily tasks.

Importantly, your LDRs and SDRs need to be on the phone, not just emailing. Study after study show reps who call and email are more successful. If you don’t hear them on the phone, something is wrong.

They should be emailing, too, of course. Email works better for some people, and can be more effective than the phone if you are calling into territories where English is not the primary language. Also, don’t let your reps get away with only sending a single email and leaving a single voice mail. The total number of email and phone “touches” you will need ranges – six to eight is what you will typically see – and should be a mix of calling and emailing. You should set up a standard cadence for calls and emails. Insight Squared, for example, has an eight-touch model, with a call and an email every other day.

Finding an LDR or SDR activity model that works for you will take time and adjustment. Tracking activity will help you do that. Find out what your most successful LDRs and SDRs are doing and make that the standard.

Train for Success – Make sure your LDRs and SDRs are properly trained or all that work getting to the prospect will be for naught. First, make sure they know enough about your product or service to speak intelligently. The marketing team should provide these teams with the elevator pitch, “reasons to care” bullet points, and answers to common objections. New team members should shadow a trained LDR or SDR for a week to learn the ropes. Some companies even have a buddy system for new development reps so the always have someone to turn to for questions without “bothering” them. You should also have SDRs listen in on sales calls – especially for the rep(s) they are supporting to learn the ropes and learn their style.

Establish a Feedback Loop – As a manager, you need to hear from your development reps how things are going. What emails are working? Do certain times or day work better than others? Certain subject lines? Or maybe an angle or offer you came up with? In your weekly 1:1, make sure to ask for this feedback. You should also listen to the calls your development reps are making, either live or recorded.

I recently got a great tip from Bryta Schulz, a tech marketing colleague of mine. She replays inbound voicemails she gets from SDRs and LDRs trying to sell her something, and has her SDRs critique them. That way her SDRs can learn from good and bad examples.

Arm with Tools – As mentioned above, SDRs and LDRs need to make a lot of calls and send a lot of emails. The good news is that there are some great tools out there to help them. InsideSales.com has a power dialer that will not only make a lot of calls, but leave a (previously recorded) voice mail if the person doesn’t pick up. The development rep is alerted if the person picks up, and can otherwise be doing something else (like emailing…). Email tools like ToutApp (which we use) let LDRs and SDRs send lots of personalized emails to prospects, test subject lines, report on individual rep performance and more.

Set the Lead Handoff Process – Even with all of the work hiring, goaling, training and equipping your team, one critical step can cause problems – the lead handoff. This is called the sales acceptance process, and the leads move to a sales accepted lead, SAL, stage. You need to be specific about the level of lead qualification and how a rep receives the lead. For example, is any meeting a good lead, or does it need to be with someone from a company of a certain size, or perhaps with a certain title? This needs to be determined up front so that sales reps can’t arbitrarily reject or ignore the leads passed to them. I also recommend setting a timeframe of 48 hours for a rep to accept or reject leads.

You will no doubt learn a lot in the process of running your LDR or SDR team. That’s part of the fun. You will learn how many touches it takes for your ideal customer, and whether phone of email is more effective. Certain subject lines will work better than others. Encourage your team to give you feedback and to try new things.

Remember, creating an effective LDR or SDR team is a process. Hiring is just the start. Management and measurement are key.

Anything I missed? Have you run and SDR or LDR team and have tips to share?