Organizational structure - or, in our case, building a sales team - is extremely complex. There are degree programs, conferences and consultancy firms that specifically focus on Organizational Development.
I have none of that background. So, some may think it a little presumptuous of me to declare that the model of having an Inside Sales/Business Development Representative support your Outside Sales/Account Executive is flawed. After all, this sales operations model has been around for a long time at large, successful companies like Oracle, Microsoft and Salesforce.com.
What I do have is personal experience as a member of a sales team employing this model, and now selling into companies with this model. And it’s clear to me that it fails to meet its goals.
Before I launch into said flaws, here is what I mean by the “traditional sales model”
- Todd is a field account executive (AE). His company is based in Atlanta, but he lives in LA, since his territory is LA County. Todd’s annual quota is $1 mil
- Sandy is a business development rep who works at HQ in Atlanta. Her job is to find/create new business meetings and calls for Todd and two other AEs. She has to create 7 new opportunities/month and have those opportunities generate $1 mil in closed (by her AEs) revenue
- If Todd closes a $200k deal, he gets 10% commission. If Sandy found the $200k deal that Todd closed, she also gets 1% commission on that deal
- The typical Business Development Rep (BDR) stays in that role for 12-14 months. She is then promoted to a Junior AE role, closing either smaller deals or smaller companies or both
My issue with this model is twofold:
- Conflicting goals
- Brevity of the “sweet spot”
The AE and BDR relationship, while simpatico on many levels, has some conflicting goals that undercut the pairing’s effectiveness. For starters, let’s look at their actual goals. The AE has one goal. It’s a number and it’s generally a big number. If the AE could meet and exceed his quota in one deal that he works on all year long, that’s great…as long as he gets there. BTW, that’s a terrible way to try and hit your number, but I’m trying to illustrate a point.
The BDR however, has to develop multiple new deals every month. They will often find an opportunity through calling and emailing, identify the decision-maker, set up a discovery call with the AE and have some solid next steps for the AE to follow up on after that call. Rinse and repeat 7+ times a month (unless a lead comes in through an account they’re working, which is another flaw that could be it’s own article). Inevitably, a few of those 7+ deals (PER MONTH!) will either be small or, worse, just barely have a realistic chance of closing.
For an AE, taking a meeting or call that is too small to move the needle on their annual quota isn’t the problem. It’s the sales process of creating a quote and the contract and having to follow up with seemingly-always-super-needy small-potatoes customer.
Even less palatable than the small ones are the clearly questionable-in-its-probability-to-close type of deals. The thought of putting one of those opportunities in their pipeline is enough to make an AE nauseous. Once that opportunity pops up in their manager’s dashboard, said manager will be breathing down their neck about things like “updating next steps.”
See the issue? This difference in goals can cause some tension or a bit of quid-pro-quo that undermines the intended purpose of this sales operations model. Certainly there are some AE-BDR pairings that just work perfectly, but in my experience, those are the exception not the rule.
Brevity of the “Sweet Spot”
Even the most perfect AE-BDR pairing is fleeting. Here’s why: a field account executive at a major company is pretty close to the apex of his career. Maybe he wants to become a Regional VP, maybe he wants better, more strategic accounts. But from a pure “closer” standpoint, he’s at or near the mountaintop.
For ol’Sandy the BDR, on the other hand, her role is a stepping stone. No one has “Senior BDR” as their pot-o-gold at the end of their five-year plan rainbow. So, more often than not, the job is treated as such. Her goal is to get in and get onto the next step as soon as possible.
Let’s break down her timeline:
Months 1-3: Learning and ramping up
Months 4-10: Understands and is challenged by the role, adding consistent value
Months 11-Promotion: This is where it starts to get dicey
- The BDR is picking up more responsibility on the inside sales team - interviewing potential hires, mentoring new BDRs, planning spiffs and maybe closing some of their own, smaller deals
- Like Skynet on April 19th, she is becoming… Self-aware. She may not be a machine launching an attack on human-kind, but BDRs at this point in their tenure are able to game the system a bit
- Remember Senioritis in high school and college? The same affliction hits BDRs when they are close to promotion. If they’ve made it this far they’ll have good enough relationships with their AEs to get a little wink-wink help with opportunity creation in the last few months while they’re prepping for their promotion interview
- She's also burned out. Hitting 7+ opportunities every 30 days for a full year can feel like a high-pressure hamster wheel. And besides, the summer is gonna be so great maaan
Now think about this from AE Todd’s perspective. Every 12-14 months, he onboards a new BDR for maybe 10 months of effective work. More likely, 6-8 months on average. In the worst case, the BDR is fired or quits early on and the relationship becomes a bummer. And bummers my friend, are no fun.
This why a lot of AE’s become wary of engaging with a BDR resource. It seems like a lot of effort for sub-optimal return.
Does the traditional model meet its goals?
So the AE-BDR relationship may not necessarily make them a great team. But why does that matter to the company? To answer that, we need to understand whether this sales team model is meeting its goal(s).
- If the goal is to “help develop new business” then it kind of accomplishes that goal. Most of the deals that a BDR is attached to probably would have found their way into the AE’s pipeline regardless, but maybe not as quickly
- If the goal is to “groom the company’s next AEs” then it kind of accomplishes that goal, too. Several BDRs will realize, however, that a promotion to Junior AE won’t get them a significant bump in base salary. Whereas if they go to another company, they get a significant bump in base salary and can jump a level or two in title
- If the goal is to “have younger people at the company Christmas party” then it definitely accomplishes that
The one goal I’m certain is not accomplished by this model is “supporting your field AEs.” An AE’s time is extremely valuable. Because of that, a lot of BDRs are in charge of things like scheduling, helping fill trips with meetings, prospect research, sending out mass emails and updating or adding information in the CRM. You’ll notice that none of these “support” functions directly result in the BDR hitting their monthly quotas. So it’s not a top priority for them to actually support their AE in these functions. Unless of course, the aforementioned quid-pro-quo is in effect. If it is, then your company is paying A LOT of money for an administrative assistant
Just to be clear, I’m not diminishing the value of delegating those administrative processes. It saves your AE’s time, keeps the data in your CRM clean, can help them hit their annual quota and makes them feel supported. I just know that you can provide support to these executives in a more effective way.
Hint: Take a look at Prialto, or check out the case study below