Unlock the secrets of SaaS growth

A well functioning SDR team is vital to the success of your inbound funnel. You can fund the top of the funnel all you want, but if your SDRs aren’t converting that traffic into qualified leads for your sales team, then it’s all for nothing.

In a series of three posts, we’ll explore best practices for establishing a high-performing SDR team. In this first post we’ll cover the very basics of planning team targets to ensure your pipeline targets are being met.

Getting this right means you can build KPIs and compensation plans that reward the right behavior and focus SDR teams on working the leads that matter. Topics we’ll cover in later posts.

Using this simple SDR Target Planner will help you to identify the volume of demos / meetings your SDR team needs to be booking in order to deliver on your pipeline and revenue targets; and to understand whether it’s a realistic and achievable goal based on your SDR resources.

Data you will need

• Revenue Target ($)
• Average closed won deal value ($)
• % Demos / Meetings booked that progress to Pipeline (SQL)
• % SQLs (Opportunities) that are closed won

Step One 

• Access the link to the SDR Target Planner, the link automatically creates your own copy of the Google Sheets planner. Complete the input fields (marked in yellow) C9:13. 

• You’ll need to know how many SDRs you have, your revenue target, and average deal value. 

• Importantly, you will also need to know your sales conversion percentage. The planner is based around sales conversion from SQLs (as this is typically when an opportunity is committed to pipeline). However, this can be adjusted to suit whichever conversion gate you can calculate from. Also, calculate the percentage of demos booked that actually move to SQL (pipeline).

• This can all be taken from historical data. You only need a small sample set to have a high degree of statistical accuracy – so don’t try and split the atom at this stage. Also, note, the term Demo is used in this planner, but this is interchangeable with the CTA used in your own funnel (e.g. Discovery Call, Pricing). It is there only to indicate the calendar appointment being booked by your SDR team for the sales reps.

Step Two

• The Summary Section now calculates your pipeline coverage requirements. This is the amount of pipeline that needs to be generated in order to meet the revenue goal. For example, to generate $1m of inbound revenue with a 25% win rate, $4m of inbound pipeline needs to be generated. 

• Based on your SDR team size, it also shows the total number of demos that need to be booked (in total, and per SDR) to generate this pipeline; factoring in the % of demos that progress to SQL / a pipeline committed opportunity. 

• This is your baseline from which to work; e.g. based on historical performance (or your best guess if coming from a standing start), this is the very minimum requirement on your SDR team for booked demos. 

• This also gives an indication of SDR capacity. Do you have too few SDRs, or too many? Ultimately, the per SDR quota will need to be realistic and achievable. We’ll cover this in a later post.

Step Three 

• If you want to expand your planning to look at individual SDR quotas, use the SDR Quotas & Yield section. This is useful if you have SDRs responsible for different geographies or industry sectors. 

• Enter the OTE salary and pipeline % to be owned by each rep (keep a check on cell G49 to ensure this always totals 100%). 

• A useful metric calculated at this stage is SDR Yield. This is the amount of ($) pipeline generated for every $ of salary. It’s a useful measure for keeping consistency and fairness in the process, particularly for international teams where both salaries and average deal values may vary between geographies. 

Summary

Being clear in your targets, and helping your SDRs to understand the expectations on them is just the first step in building a high performing team.

Using this SDR Target Planner will help you to understand the burden on your inbound SDR team and their individual contributions. It acts as a baseline from which you can better understand your staffing and compensation requirements.

In later blog posts, we’ll be covering the issues of SDR capacity (how many reps do you actually need?) and how to build comp plans that drive the right behavior. 

Note – this SDR Target Planner uses some assumptions around sales funnel stages and how you track win rates. These may differ between organizations.