Understanding Sales Team Leverage
Today we’re talking sales team leverage.
It's a very common problem that SMB companies encounter, especially ones that are scaling or dealing with a stagnant sales and marketing team. In terms of leverage, we are talking about the relationship between positions in your demand generation function.
I want to be specific, we don't think about things in sales and marketing anymore. We think about demand gen and pipeline management. Demand generation is getting the horse to water. That is usually consummated with an SAL (Sales Accepted Lead) in a B2B context. That is defined as a discovery call with your ideal client profile. That is what a demand gen program is supposed to yield. Pipeline management is the act of getting the horse to drink, and consummating a sale.
A big issue that I see, especially in many of our consulting engagements, is this idea of sales team leverage. You want to ensure that your pipeline managers, which are usually account executives or someone past that sort of position point are doing “account executive” activities. These are as follows.
Number One: Closing deals
Number Two: Negotiating deals
Number Three: Submitting proposals to close deals
Number Four: Having discovery or demo calls
Number Five: Prospecting
It is in that exact order. The best use of time for an AE or any sort of pipeline manager is to close deals. If you have your pipeline managers doing prospecting, you have to ask yourself why you using their time in that way. In some instances, there's a good reason. Maybe your ICP or your demographic is a very cerebral or high-end type of ICP that's not a good fit for a BDR or SDR position to be interacting with. We see this a lot with like CIOs, CTOS, CTOs, and really any sort of like real technical role, things like CFOs so on and so forth.
Your organization should be ensuring your pipeline managers are not doing low-value work, and your demand gen team is keeping them completely satisfied with high-level activities. This is a concept that's often lost on many organizations.
There are two primary traps that I see people fall into.
The first is promoting SDRs just for the sake of promoting them
SDRs are in a notoriously transient position. These folks want to spend 12 to 18 months as an SDR and get promoted to a higher-level job function. Organizations oftentimes will promote SDRs to account executives to ensure they do not churn, but they'll still give them full-cycle sales responsibilities. These types of things that usually dilutive to an overall sales organization.
The second mistake is being under-leveraged with your SDR resources in comparison to your Account Executives.
Many organizations have a 1:1 ratio of SDRs and AEs, and this is usually not enough unless you have an extremely productive SDR function. Usually, a 2:1 or 3:1 SDR to AE ratio is necessary to fully keep your account executive booked solid so that you can measure the efficacy of your pipeline management program.
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If you want to talk about sales leverage or discuss how you're seeing it impact your own sales and marketing program, we'd love to hear from you. Request a free consultation with FullFunnel to discuss all of your organization's sales and marketing needs.