Is the Business Dev Rep/ Account Exec sales model efficient enough today?

Many sales teams use Business Development Reps (BDR/SDR) as the foundation of their inside (and sometimes outside) sales organization. The BDR/SDR role is one of research, prospecting, and appointment setting, to generate leads for the quota-carrying sales people. The core metrics that drive the BDR role are mostly all activity based: leads sourced, emails sent, calls made. These activities will create fairly predictable amounts of: appointments, opportunities, and pipeline. For Account Executives (AE), appointments, demos, proposals, and closed business are the main metrics.

The daily breakdown for each role usually looks similar to this:

  • BDR: 25 leads sourced, 80-100 outbound attempts (combination of emails and calls) 1-2 appointments set
  • AE: 2-3 intro calls, 2-3 demos, proposals, follow-up with closing opportunities

Since AEs can handle 4-6 calls a day (or more) typically 2-3 BDRs will feed each AE. The BDR team will have a manager, and the AE team will have a manager, then typically a Director or VP will be responsible for the entire team. The org chart may look similar to this, with the AE/BDR groups repeating:


Sales Org Chart

While this sales team organization has been incredibly popular, it might be on the verge of a major disruption. Why?

This model has been incredibly popular for several reasons, and one of them is the funding scene. Over the last 5-10 years, investors had been prioritizing growth above almost everything else. It was very common for tech companies to raise funding and invest up to 90% into Sales and Marketing.

However this has changed dramatically and has led to headlines such as “Tech faces hour of reckoning as fundraising drops, layoffs rise”, “Tech unicorn CFOs: Winter is coming” and even click-baity headlines like “This Tech Bubble Is Bursting.”

While these headlines offer plenty of hyperbole, it is not an exaggeration to say that startups are going to require a change in perspective. In an interview with BostonInno, Fred Shilmover CEO of InsightSquared spoke about laying off 23 employees, or 15 percent of its workforce, “throughout the tech community, absolute growth has given way to efficient growth.”

This experience was clearly central to InsightSquared, as Mike Baker (who has since left) wrote a great blog post about the crash of Zenefits, titled “The End of Growth at Any Cost” and in it, he concludes that, “now is the time for SaaS startups to double down on efficiency.”

Alright so now that we have covered the changing fundraising landscape, how does this relate to the BDR/AE sales model?

As companies need to operate more efficiently, they will be required to look at every aspect of their business model to look for cost savings. A great way to save money in a startup is to leverage automation and modern tools. We believe many of the core elements of the BDR sales model are ripe for automation. Just like a startup wouldn’t choose to completely build their own tech infrastructure (almost everyone uses AWS or equivalents, unless it is a competitive advantage), we believe companies are going to find ways to automate efficiencies into their sales processes.

Where a BDR can source 25-30 leads a day and make 80-100 outbound attempts, an intelligent automation solution can outperform an entire team of BDRs, and at a fraction of the cost. The tasks of prospecting and collecting contact data are great fits for the current climate of machine intelligence. As more and more executives altogether stop answering the phone, and Millennials generally hate phone calls, the cold call is going to become an even lower quality interaction. In the world where email/social and textual based communication comes to dominate, intelligent automation solutions will create major efficiencies for sales teams.

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