In sales, hiring the right team members is crucial for getting the right balance of generating and closing business. The complex design of a modern revenue team however leaves you with the challenging decision of whether to hire lead generating Sales Development Representatives (SDR's) or business closing Account Executives (AE's).
With traditional sales capacity planning being focussed around a top down approach that simply divides a company target by a sales person target, the real complexity around sales capacities have often been misunderstood or outright ignored.
The modern reality is that both are needed in B2B sales organisations, although the mix of what and when to hire has become a lot more complex - Let’s dive in:
The Role of Sales Development Representatives (SDR's)
SDR's play a critical role in the sales process by generating leads and qualifying prospects. They are responsible for prospecting, cold calling, and nurturing potential leads to pass on to AE's. SDR's are typically more junior in their sales career and often work closely with marketing teams to identify and target potential customers. They focus on building relationships, understanding customer pain points, and qualifying leads to ensure that only the most promising opportunities are passed along to AE's.
The Benefits of Hiring SDR's
Increased Lead Generation: SDR's are dedicated to generating leads, allowing AE's to focus on closing deals. By offloading lead generation to SDR's, businesses can ensure a steady flow of potential customers in the sales pipeline.
Time and Cost Efficiency: SDR's are often more cost-effective to hire than AE's due to their junior-level experience and lower salary expectations. Additionally, by separating the responsibilities of lead generation and closing deals, businesses can optimize their sales process and make it more efficient.
Skill Development: SDR roles provide an excellent opportunity for sales professionals to develop their skills and gain valuable experience. Many SDR's go on to become successful AE's, leveraging their knowledge of the sales process and industry insights.
The Role of Account Executives (AE's)
AE's are responsible for closing deals and bringing in revenue for the business. They work closely with qualified leads passed on by SDR's and focus on understanding customer needs, presenting solutions, negotiating contracts, and closing sales. AE's are typically more experienced and skilled in consultative selling techniques, relationship building, and navigating complex buying processes.
The Benefits of Hiring AE's
Deal Closing Expertise: AE's possess the skills and experience needed to navigate the complex sales process and close deals effectively. They have a deep understanding of customer pain points and can tailor solutions to meet their needs, ultimately leading to higher conversion rates and revenue generation.
Relationship Building: AE's excel at building strong relationships with potential customers. They understand the importance of trust and credibility in the sales process, and their ability to connect with clients on a deeper level often results in long-term partnerships and repeat business.
Industry and Product Knowledge: AE's are usually more knowledgeable about the industry and product they are selling. Their expertise allows them to position their offerings effectively, address customer objections, and provide valuable insights to potential buyers.
Q: How do I determine whether to hire SDR's or AE's?
A: Consider the specific needs of your sales process and the resources available. If lead generation is a challenge and you have a capable team of AE's to handle closing deals, hiring SDR's may be the right choice. On the other hand, if you have a consistent flow of leads but struggle to close deals, investing in skilled AE's might be more beneficial.
Q: Can SDR's become successful AE's?
A: Yes, many SDR's go on to become successful AE's. The experience gained in lead generation and the understanding of the sales process make for a strong foundation. Providing training and growth opportunities can help SDR's transition into AE roles.
Q: Should I hire both SDR's and AE's?
A: Hiring both SDR's and AE's can be a winning strategy for many businesses. By having dedicated SDR's focused on lead generation, you ensure a steady flow of qualified prospects for your AE's to engage with. This division of labor allows AE's to focus on closing deals and maximizing revenue generation. It's important to ensure clear communication and collaboration between SDR's and AE's to create a seamless handoff process and maintain alignment throughout the sales cycle.
Q: How do I manage the transition from SDR to AE?
A: Managing the transition from SDR to AE requires careful planning and support. Provide SDR's with opportunities for professional development, such as sales training, mentorship programs, and shadowing experienced AE's. Encourage them to gain a deep understanding of the product or service they will be selling and help them refine their consultative selling skills. By providing a clear career path and growth opportunities, you can motivate SDR's to excel in their roles and prepare them for the transition to AE positions.
Q: What metrics should I use to measure the success of SDR's and AE's?
A: For SDR's, important metrics to consider include the number of qualified leads generated, conversion rates from leads to opportunities, and the quality of leads passed on to AE's. It's crucial to track the effectiveness of their prospecting efforts and their ability to engage and nurture potential customers.
For AE's, metrics such as the number of deals closed, revenue generated, average deal size, and customer retention rates are key indicators of their success. Additionally, consider factors like sales cycle length and win rate to assess their overall performance.
When deciding whether to hire SDR's or AE's, it's important to consider the specific needs of your sales process and the resources available. Both roles play critical parts in the sales cycle, with SDR's focused on lead generation and qualification, and AE's focused on closing deals and revenue generation. Hiring both roles can provide a balanced and efficient sales team.
By understanding the unique benefits each role brings and providing the necessary support and training, you can build a high-performing sales organization that drives business growth and success.
Figuring out who to hire, as well as when, can be almost impossible to keep on top of. As business dynamics change, so do aspects like needed lead volumes, or in a landscape of reducing deal sizes and increasing deal lengths even the the amount of deals needed to get to target can change rapidly.
Here at Clevenue we're helping businesses revolutionise planning that's typically bound to spreadsheets, enabling them to always keep on top of their progress towards plan, no matter what the market is doing.