For sales development teams, the activity of coaching is vital because it ensures continuous improvement of sales development representatives (SDRs). However, most organizations are not implementing true sales manager to SDR coaching sessions.
So why is there a lack of coaching in the sales development space? First, most sales managers don’t quite understand what constitutes coaching. Second, many sales managers believe that the training the SDR received in their onboarding during the first few months of their employment was sufficient training. It is often assumed that the SDRs will just figure it out as they go.
“Implementing FrontSpin across our sales development business, featuring over 150 SDRs and close to 20 SDR managers, has created a significant impact on the effectiveness of our real-time call coaching. The platform incorporates the most well-designed, seamless whisper and call monitoring functionality we’ve experienced in any power dialer. As a result, we’ve seen our prospect conversion rates rise by nearly 14% since we fully installed the platform in early 2020.”
Kristen Wisdorf, Head of Client Services and Delivery, memoryBlue
When using the FrontSpin whisper functionality, sales managers only need an internet connection to monitor and coach their SDRs. No additional plug-in is needed. By using whisper functionality, SDR coaching sessions are proven to be more powerful and yield better results.
Coaching can improve SDR performance if it is executed on a consistent basis. By consistently coaching, managers can be aware of the SDR activities and identify problem areas that the manager can help coach. The manager can then offer specific suggestions in order to help the SDRs in the areas they are struggling in. Using the FrontSpin whisper functionality, the managers can listen to live calls and coach the SDRs in real-time without the prospect hearing.
Consistent coaching, partnered with the right tools, will ensure your SDRs are converting more prospects in 2021.
2020 has been a year like no other and it is probably safe to say that almost every business across the globe is looking for some ways to cut costs. Now is the time for companies to take a look at their expenses and see where they can save.
A lot of the time, this means tech stacks need to be reduced. The thought of reducing your tech stack can be stressful. What tools should you keep and what should you cut?
Let’s take a look at five ways businesses can reduce their stack while still keeping their favorite tools.
Pinpoint needs versus wants
Pinpointing needs vs. wants can also help you determine how important the bigger tools that you are paying a lot for really are. You may be paying for a larger solution with extra add-ons you may not even be using.
By pinpointing needs vs. wants, you’ll find ways to remove potentially frivilous tools or replace high-priced solutions with lower-priced tools.
Decrease the number of seats you are paying for
When you pay for software, you typically pay per seat. Make a list of the users you are paying for and reach out to see if they are actually using the software you are paying for.
If the employees aren’t using the software, cut your number of seats.
You can also ask your sales rep at the software you are using if they are willing to give you a deal on the number of seats you currently have. There may be some Covid offers that you can benefit from.
Streamline Your Tools
With so many different tools that offer very similar functions, it’s not unusual to find a company that uses multiple tools when they really only need one.
We recently reduced one of our clients, memoryBlue, tech stack from four vendors down to two. With using FrontSpin as their sales engagement tool and power dialer, no additional software was needed.
Confirm You are Automating Everything
While saving money is important, so is saving time. Are the tools you are paying for helping you automate everything they can? With FrontSpin, SDRs, BDRs, and AEs are able to automate their calls, emails, and social touches with cadence playbooks. Along with being a power dialer, the sales automation process is streamlined.
Outsource
When you outsource your SDR team, you significantly reduce in-house hiring and training costs. The hiring process is simplified and you are able to keep new employee costs down. Every time you hire a new SDR, you are spending between $6,000-$10,000 a month for payroll, infrastructure, and benefits. When you outsource, you can reduce that down to $2,490 a year.
When CloudTask first started working FrontSpin, they had 40 reps using five different systems. They have since grown to over 85 reps all using FrontSpin. This means as an outsourcer, they can control training, the tech stack, reporting, and onboarding. They only have one database environment to manage, no longer have a need for additional phone hardware, and also decreased operational vendor costs.
We all know all the actions you go through when deciding to add a new tool to your tech stack. You do your research, read the reviews, and try it out with a free trial or demo.
Tech makes our life easier. It is designed to make to relieve some of the stress of our day-to-day tasks but if you are paying too much, it won’t relieve much stress. If you are feeling overwhelmed, follow the five steps we outlined above to see where you can reduce costs and still streamline your daily tasks.
A software startup in Silicon Valley is tracking to beat $3 million in revenues in its first full year of operation. It is time to come up with a sales plan for next year. The board had been encouraging the CEO to ‘“step on the gas” and aim for $9 million next year.
The CEO, CFO, and VP of Sales gather around the polished glass table in the newly redecorated conference room to finalize the business plan for the next year. The CEO gets the ball rolling, “So is everyone comfortable with this plan to reach $9 million next year?” The VP of Sales says he’s onboard, but that tripling sales will also mean tripling the sales team. The CFO chimes in saying that means 16 new hires in sales — another ten account execs and six more SDRs — and 14 new hires in other departments to support the growth.
The board approves the aggressive growth and sales plan and the required spending. They congratulate themselves that now they can raise an up round to support the growth, and the hiring spree begins.
The first quarter results are a near miss, but the company manages to close its round of funding based on the growth plan. The second quarter results diverge even more from the sales plan. When the third quarter results show annual sales growth is “only” 90% to date, the VP of Sales is called on the carpet to explain, and all he can offer is that it’s taking more time than expected for the sales team to hit their stride. What went wrong?
B2B giant salesforce.com has made growth look easy, mushrooming into a $7 billion company in just 15 years since it was launched. But planning for growth is never that easy, especially for B2B tech startups. The above scenario is actually quite common in Silicon Valley, as new firms are often pushed to grow faster than they should. According to the Startup Genome Report 92% of Startups fail and 74% of those failed due to premature scaling, ie hiring and spending money on sales and marketing before they are ready to. Mark Leslie and Charles Holloway break down the whys and wherefores of the “Organization sales learning curve” in their seminal 2006 article in HBR.
Sales Plan: The Sales Learning Curve
When you dig into cases where sales growth does not even come close to expectations, you often discover the real problem is that the sales team was not performing at capacity before the ramp up. One common situation is that you meet sales goals your first year because two of your five sales reps are crushing their quota, but your other three reps are underperforming. Then in year two, your two superstar reps also start to underperform. Why? Because the CEO had been feeding them prime leads and deals, and the easy deals are all gone now.
If your sales team is not really performing, then adding five new AEs will not result in doubling sales bookings, but more likely in eight or nine reps not making their quota.
If your sales team is not really performing, then adding five new AEs will not result in doubling sales bookings, but more likely in eight or nine reps not making their quota. You must be certain you can actually derive value from a larger team before adding sales capacity.
The recent boom and bust of managed benefits startup Zenefits is an instructive case in point. After a very strong year in 2014, Zenefits CEO Parker Conrad promised investors 1000% growth in 2015, raised $583 million and commenced a gigantic hiring spree. Unfortunately, the ramp up at Zenefits did not produce the promised results, with the company “only” managing 300% growth in 2015 and Conrad losing his job (although some have argued that he lost his job due to compliance issues).
Analyze Your Sales Capacity Utilization before Hiring
If you are going to avoid a situation like Zenefits, you need to get a firm grip on your actual sales capacity, that is, the efficiency and effectiveness of your sales team.
All too often planning for sales teams just involves taking the assumed average quota by rep and multiplying that figure by a given number of reps to match the current financial plan. The thinking goes “if we got $3 million in sales bookings last year with an eight-people sales team, just double up to 16 and we will hit our $6 million goal.”
The problem with this kind of generic sales plan for growth is that if your actual metrics are below your assumptions for more than 25% of your reps, you still have a lot of unused capacity, and bringing in more reps will not result in increased sales. In this case, instead of increasing headcount, you need to work on improving the efficiency of your sales process.
The table below offers an example of sales model metrics for a growing SaaS startup.
The above metrics show that the sales team is operating below capacity. To increase sales bookings and achieve better sales capacity usage, you need to consider:
– If your inbound SDRs are not consistently receiving 200 marketing qualified leads a month, you need to work with marketing on increasing the number of leads generated before adding additional inbound SDRs
– If the close rate of your AEs is less than 20%, then you are better off investing in coaching or training your reps to improve their effectiveness than hiring more AEs.
– If your outbound SDRs are not performing 200 touches a day, then ponying up for a sales acceleration tool or Power Dialer to consistently increase their activity levels is clearly a worthwhile investment.
Before ramping up your team, you also need to ensure that your sales model metrics are not skewed by one or two “superstar” reps who are masking poor performances by other reps.
The overall efficiency and effectiveness of your team will inevitably slip when you onboard new reps. That’s why the whole idea that you just expand your team and sales metrics will improve is flawed. You may have to do both: increase your sales capacity and improve the utilization of that increased capacity. But with that comes increased risk.
According to entrepreneur and tech venture capitalist Jason Lemkin, the best way to gauge the health of your startup is to monitor the production of qualified leads. Lemkin introduces the concept of “Lead Velocity Rate”, that is, your growth in qualified leads measured month over month. This argues that you shouldn’t increase the size of your sales team until you achieve aa Lead Velocity Rate that can support a larger team.
Growth is a Journey of increasing demand and capacity. Too many B2B Tech companies, especially venture back ones, make the mistake of increasing capacity without paying enough attention to improving the utilization and demand of their capacity. More often than not this does not translate into the expected growth in sales and meeting the sales plan.
Distraction limits efficiency. This inescapable fact of human nature is too often ignored by employers, as they frequently sabotage their own efforts at creating more efficient processes by overloading employees with a variety of different tasks.
Context switching, or the process of mentally switching gears from one task to another, takes time. Some psychologists have even likened the process to a computer reset, as a new task requires the brain to take the time to “recontextualize” to the new situation and expectations.
Most people, especially strong multitaskers, claim they hardly notice the brief mental processing delay, but it can be measured, and this processing delay can add up to a significant amount of time over a full shift, especially if the sales rep is frequently changing between a number of disparate tasks.
Focusing on more than one thing decreases productivity by 40% and lowers IQ by 10 points, according to Harvard Business Review. It also leads to a loss of 2.1 hours a day.
It might be hard to believe, but according to Gloria Mark, Professor of Informatics at the University of California, Irvine, her research shows that information workers (i.e., salespeople) switch tasks every three minutes and five seconds on average. Moreover, close to half of these context switches were actually “self-interruptions”.
Reducing/Mitigating Context Switching
Larger employers are becoming increasingly aware of the costs of context switching, and many have begun to fine tune their operations to minimize context switching and prevent their sales reps from losing focus.
Thoughtful scheduling of a rep’s daily activities can help in minimizing context switching. For example, a sales development rep on an inside sales team might spend the first hour of her day cleaning up leads and resolving problems, then she logs into her sales communication tool and puts in three hours sending emails working to qualify leads. After lunch, she’ll reach out to leads using an auto dialer like FrontSpin for three hours or so, and spend the last hour of her day responding to emails and finalizing qualified leads to pass on to the account exec team.
Grouping calls is another way to minimize context switching. One idea is to group calls by roles, so sales reps can focus on the same messaging for the same buyer personas and not have to mentally switch gears.
With this kind of block scheduling and carefully considered grouping of calls, you can make sure that your team is exposed to minimum distractions so they can get more work done. The use of an integrated sales communication tool and autodialer also means the employee is switching to a designated work environment that encourages staying on task.
Not surprisingly, a growing number of sales managers are turning to technology in their efforts to streamline their operations and improve rep productivity. The latest sales communication & acceleration tools and auto dialers offer a ton of useful features to save time and improve productivity.
Sales Communication Software and Auto Dialer Improves Focus, Improves Productivity
Sales communication & acceleration platforms and auto dialers continue to evolve, and most of the new features are aimed at eliminating unnecessary work and distractions, so that sales reps spend more of their time contacting customers and closing deals.
An integrated, multi-modal sales tool that includes an auto dialer should allow reps to more than double the total number of email or phone contacts made during a shift, dramatically increasing productivity and resulting in more, higher-quality leads and more opportunities for account execs.
An integrated, multi-modal sales tool that includes an auto dialer should allow reps to more than double the total number of email or phone contacts made during a shift, dramatically increasing productivity and resulting in more, higher-quality leads and more opportunities for account execs.
The latest generation of sales communication solutions have significantly leveraged the value of an inside sales team. Technology has made it possible to integrate a number of tasks into a single interface, enabling the development of a more effective sales process, and giving your team the tools it needs to rapidly qualify prospects and close more deals.
Forward-looking sales managers are closely tracking the technology-driven sea change that is hitting the inside sales world today, and are taking steps to ensure their sales teams have the productivity tools they need to succeed.
I’ve started several startups and advised countless others. One thing, however, has remained constant: friction between sales and marketing.
Sales is seldom satisfied with the quality and quantity of incoming leads, while marketing complains about sales doing little with the leads it already has.
Most of the times, this friction stems from an inability to define where marketing ends and sales begins. Sales is seldom satisfied with the quality and quantity of incoming leads, while marketing complains about sales doing little with the leads it already has. Do not think for a moment that this conflict is limited to startups. I’ve served on the boards of large companies where VPs of Marketing and the VPs of Sales have literally fought over the quality of leads.
The first step in reducing the friction between sales and marketing is to come to a clear definition of a Sales Qualified Lead (SQL), since this is where the hand-off from marketing to sales takes place.
In this post, I’ll help you understand what makes an SQL and put a figure to the percentage of SQLs a well-performing sales team should be closing.
Essential Definitions
Before we start, a few quick definitions, just to make sure that we are all on the same page:
1. MCLs or Marketing Collected Leads
An incoming inquiry collected through marketing. This is a raw lead and needs further qualification before it can be passed further down the funnel (only 4% of marketing-generated leads actually close, according to 47% of B2B marketers).
2. MQLs or Marketing Qualified Leads
An MCL that meets certain standards (such as intent or action) is classified as an MQL. An MQL falls in the ‘second stage’ of the lead qualification process and is more likely to convert to a sale than other inquiries. Once a lead is classified as an MQL, it is ready to be handed over to a human such as an SDR (Sales Development Representative).
3. SQLs or Sales Qualified Leads
The SDR qualifies MQLs based on set criteria (budget, need, authority, etc. – more on this below). Leads that meet these standards are classified as SQLs and are ready to be handed over to an Account Executive (AE).
Some sales organizations use an interim stage between MQL and SQL called ‘SAL’ or Sales Accepted Lead. SAL is a way for AEs to quality check incoming leads and ensure only the most relevant make it to SQL status. More often than not, SALs are grouped under SQL.
4. Opportunities
SQLs that have become real sales opportunities are classified as ‘opportunities’. These are leads that are ready to close, set-up a meeting with, etc.
The Lead Qualification Process in a Nutshell
The lead qualification process follows a waterfall model where a prospect enters the top of the funnel as an MCL and exits as a customer (or at least, as an opportunity). At each stage in the funnel, unqualified leads get filtered out, qualified leads are squeezed through.
Consider the following process as an example:
Stage I: A prospect lands on your website and fills out a form. This prospect is now an MCL.
Stage II: An automated lead intelligence tool such as Eloqua or Marketo analyzes this lead and classifies it as an MQL.
Stage III: A SDR takes over and analyzes if this lead is ready to be sold to. If yes, it is qualified as an SQL. Else, it goes back to marketing for nurturing.
Stage IV: Once a lead is classified as an SQL, AEs take over, typically turning the SQL to an opportunity and moving it through the pipeline.
The actual handover from marketing to sales takes place in Stage III. This, as you might imagine, is a big source of conflict in most companies. Much of this stems from a simple question: what really makes an SQL?
The answer? It depends.
What Makes an SQL?
Although the term ‘SQL’ is used widely across industries, it can mean very different things to different organizations.
For example, at a Fortune 500 company I was once a part of, sales always complained that there were “not enough leads”. As a response, marketing started passing off underqualified MQLs to SQLs to account executives. Suddenly, sales had all the leads it wanted, but conversion rates were abysmal. These leads were still ‘SQLs’, but only because marketing relaxed the qualification criteria. The actual lead quality remained unchanged (and hence the drop in conversion rates).
Traditionally, you would classify a MQL as an SQL if it met the BANT criteria:
Budget – Does the lead have the budget to purchase our solution?
Authority – Does the lead have the authority to sign-off on a new deal?
Need – Does the lead need our solution to meet a business challenge?
Timeframe – Do we know when the lead will need our solution?
As you can imagine, getting all this information about a lead is hard. Even if you do manage to get all this data, only 5% of leads are actually in the buying process. Sticking strictly to BANT will often cause your AEs to sit idle, waiting for leads to come through the pipeline.
In such scenarios where your AEs are not operating at full capacity, you might choose to define SQLs with the AN criteria:
Authority – Does the lead have the authority to sign-off on the deal?
Need – Does the lead need our solution?
By removing the requirement for budget and timeframe, your AEs will see more leads at the top of the funnel. However, since you’ve relaxed the qualification criteria, your SQL to Opportunity conversion rate will go down as well. This creates also more work for your AE as they have to manager more leads that are less qualified (though you can mitigate this somewhat by using automated tools like power dialers to reach out to more leads, even if they are not BANT).
As always, there is a trade-off between quality and quantity.
The definition of a SQL, thus, is not constant throughout the industry and the growth of a company. You might start off with an AN scheme when your team is small and lead volume is limited. As your sales team matures and you add more SDRs, you might switch to a BANT or ANUM (Authority, Need, Urgency, Money) to improve lead quality to AEs.
The important part is to constantly optimize the qualification criteria to make sure only the best leads get through to your hunters. At the same time, you must ensure that you have a full pipeline to keep your AEs busy.
To make this delicate balance possible, it is crucial that sales and marketing agree on a shared definition of SQL. Once you agree on a definition, you can work out the balance between quantity vs. quality.
Finally, to answer the original question: what percentage of SQLs should you close?
The short answer, in numbers based on my experience:
If SQL is a BANT, you should be able to close between 25% and 35%
If SQL is non BANT, close rates should be between 10% and 20%
The long answer, of course, is “it depends”.
For more insight on marketing stats to consider going into 2021, check out this article.
In my last startup, I wanted to show my investors that we could double our revenues in the coming year. I treated this as a statistical exercise. I pulled out the spreadsheets and determined the total inside sales bookings we’d require every month to meet the target figure. I added 10% just in case (my personal insurance policy) and assigned this number to my inside sales manager.
In turn, my inside sales manager did something very similar with his team. He calculated the productivity of the reps in his current team and figured out the number of additional reps he would need to hit the assigned quota. Just to err on the side of caution, he added 20% to that quota. After doing all the calculations, we concluded we’d need 5 additional reps to double our revenue.
Since we’d just raised a round of funding, I thought it only prudent to hire the extra reps immediately so that we could be at our productive best within a year. Soon, we had our 5 extra reps, a solid product, and experienced managers at the helm. Things were looking good and I was confident we would hit our target sales bookings within a year.
I couldn’t have been more wrong.
Bad News: You Can’t Manage Inside Sales Bookings by Assigning Quotas
A few months into our sales scaling exercise, we quickly realized how hard it is to meet our monthly quotas consistently. Some months we would absolutely kill it, other months we would be treading water.
To me, these feast-or-famine swings were bewildering. After all, our sales process was very well defined, we continued to get the same number of leads every month, and our sales reps were top-notch performers. Yet, we struggled to meet our quotas consistently, month-over-month.
Good News: You Can Manage Activity
I spent many a sleepless night trying to figure out the underlying cause of our inconsistent performance. I couldn’t figure out why our results varied so much even when our product, capability and motivation remained the same.
For help, I turned to a friend who had run a very successful inside sales team.
“Mansour”, he asked me, “are you managing activity?”
“What do you mean by managing activity?”, I replied.
“I mean – are you managing the number of calls, demos, and emails for your inside sales team every day or week? Are you making sure that their activity supports their quota?” he asked again.
He then went on to explain how activity – performing a number of defined actions in the service of a goal (in this case, meeting the quota) – is the underlying catalyst for all sales. You can have the best sales team and the finest product, but unless you consistently take actions to meet your goal, you will not meet your quotas.
This was that ‘moment of epiphany’ entrepreneurs love to talk about. I suddenly realized I’d been looking at our sales process from a top-down perspective. I wanted to improve revenues, so I increased our target sales bookings, and to meet this increased target, I expanded the sales team. I never once considered that the sales team might not be doing enough activity consistently to meet the monthly quotas.
In short, I was embracing goals and processes, not the underlying actions that lead to those goals.
In short, I was embracing goals and processes, not the underlying actions that lead to those goals.
Treading a New Path: The Shortcut to Sales Success
Following the advice of my friend, we set out to define what level of activity we would require to meet our quota. We aligned this with our sales process and chose the following four activity metrics to track on a daily basis:
Number of calls per day, per representative
Average talk time per rep, per day
Number of emails per day
Number of demos this month
These were the four activities we identified as crucial to moving prospects through the sales process. If we could control these four activities, we realized we could not only sell more, but also sell more consistently.
After this, we set our activity quotas. We required each rep to make ‘X’ calls per day, send ‘Y’ emails per day, and for the sales manager to monitor ‘Z’ calls per day. We also put in place a reporting system that allowed our manager to monitor his team’s activity 3 times a day – once at 10am, once at 1pm, and once at the end of the day.
To my surprise, the reps loved the activity tracking system. They loved that they could get quantifiable data on their activity by the hour, and could use this data to improve their own performance.
The result: tracking our activity helped us push prospects down the sales pipeline. Instead of feast-or-famine, we consistently met our quotas. Within 12 months, we hadn’t just met our original sales bookings target, but even exceeded it.
Sales Bookings are a Function of Activity
Over time, our activity tracking system became more sophisticated. We tracked a number of additional metrics that helped us pinpoint areas of improvement. Capturing this data was also a great way to benchmark reps against each other and help the team consistently strive for self-improvement.
We did much of this manually, but today, with inside sales software, we can completely automate activity tracking. Inside sales software with a power dialer can automatically log calls, talk time and emails and compile detailed reports for the same. With this data, you can get powerful insights into sales rep performance and activity metrics.
As my experience shows, managing activity metrics is the key to consistently meeting sales bookings quotas, and building a productive, motivated sales team.
Key Takeaway
For inside sales teams, you can’t manage bookings, but you can manage activity. In a well-designed sales process, managing activity will push prospects down the sales pipeline and help you meet your quotas in a consistent and predictable manner. I often read how managing activity and activity metrics is useless for inside sales teams. However, I found that managing activity and activity level is the best indicator of achieving inside sales booking goals even a better indicator than the number of leads or weighted pipeline.
