What is the right way to design an SDR Career path? Not every great SDR is going to become an AE. My personal assumption is that 80% of the successful SDRs that we hire will become account executives. (The rest will find homes in other departments.) How do we build an SDR career path that takes someone with little-to-no sales experience and prepares them for the AE role in the most effective and efficient way possible?
A week ago I posted the question to my network:
Building an SDR career path is a huge challenge–especially when there are so many different types of leads that we work with (we have outbound, inbound, and content marketing). The conventional wisdom is to start a rep on inbound, move them to outbound, then give them the opportunity to get an AE role. But we’re in tech, which means we question conventional wisdom all the time. Sometimes it’s right and sometimes it’s not–finding exceptions to conventional wisdom is a powerful way to build advantages into your business.
So I questioned it–and found that the answer is not nearly as clear-cut as I expected.
For today, I’m going to summarize my understanding of the SDR career path issue. I’ve spent the last week reading everything I can on this, having the conversation I linked to above, and meeting with other leaders who have navigated this challenge. Hopefully, this can help you think through the career path you’re building, too. (This is my understanding based on talking with other thought leaders; your mileage may vary.)
As far as I can tell, there are at least 7 variables to consider. Here they are, in no particular order.
- Cost of leads: how do you put your reps in a position to give you the best ROI?
- Skill acquisition: which path optimizes for your SDR to acquire the skills they need to become an AE?
- SDR retention: where in the process are you comfortable losing people?
- Buyers journey: which path gives your prospects the best experience?
- Your segment: are you selling to SMBs or enterprises?
- Fresh cold calling skills: do you need newly promoted AEs to have been cold calling in the previous role?
- Warmness of leads: are your “inbounds” hot or pretty cold?
Building an SDR Career Path: The Variables
1. Cost of Leads
OB leads are often “free”(ish): your reps source leads on their own. Sometimes they’re very inexpensive: you might be able to buy a list for pennies per name. If your inbound leads are also low-cost (prospects are ready for a demo right now, for example), then you’re likely to be neutral on OB vs IB first.
New reps are, by definition, going to produce the lowest output. If that means, for example, half the pipeline generated per month, does that hurt the most if they are inbound or outbound?
Either way, you will want to ensure you get the best ROI. Putting proven reps on the most expensive leads is the best way to do this. If you have reps start on “cold” leads, they’ll be able to learn, fail, and succeed with the lowest risk to the company.
In the thread, Joshua Cordero said, “The more leads you get, the more experienced SDR you want qualifying them. Same goes if they are valuable leads that turn into closed deals…”
2. Skill Acquisition
I heard and read frequently that inbound is a great place to learn the product, customer, use cases, and talk tracks. Outbound will teach you to prospect and hunt. Therefore, an SDR career path starting reps on IB makes a smooth transition to OB which makes a smooth transition to AE.
But the possible danger is that it’s harder to get an inbound rep to switch gears and start making cold calls for the first time than it is to have an outbound rep call on warmer leads. If you know most of your SDRs are going to AE, and that they’ll need to make cold calls there, then it may make sense to have a rep prove that they can master that skill early on.
Michael Tuso, Head of Business Development & Enablement at Chili Piper points out that we know OB reps can do both, but we don’t know that IB can.
“Starting on inbound can place some reps at a disadvantage when they have to go hunt themselves. If you’re a hunter, you can do inbound. If you can do inbound, it doesn’t mean that you’ll be a good hunter. For me, thinking of it that way has allowed me to promote and retain SDRs at a significantly higher level in the AE role than the IB SDR –> OB AE promo track did.”
Whichever point you start from, make sure you map out which skills you think a rep is going to learn in each pre-AE role. Manage to that list.
3. SDR Retention
The impact of this criteria on your process is going to depend on how you think of retention. Finding and keeping great people is a huge, important challenge for every business I’ve been a part of.
As Ryan Ward, Founder & CEO at Athletes2Tech pointed out, outbound first means you’re going to lose reps early to failure. It sounds like you’ll still lose salespeople if you go the other way–but to other departments, as you’ll see reps comfortable with warm leads opt out of a role where they have to cold call.
Your SDR career path should start on inbound if:
- you’re comfortable with a higher percentage of performers opting out of sales and into other departments
- it’s important that your reps get “easy” wins under their belt before moving on
- you prefer attrition later in the career path
Your SDR career path should start on outbound if:
- you need to know if they can cold call (or become proficient at other OB skills) as early as possible
- you prefer attrition early in the career path
4. Prospect Experience (Buyer’s Journey)
What creates the best experience for our prospects? Most of the leaders I talked to explained that they start their reps on inbound because the leads coming in are prospects that already want a demo. The SDR just has to qualify to ensure a fit. These are simple, straightforward, and convert at a very high rate.
The leaders I talked to who had outbound come first had a different situation: “inbounds” were responding to content marketing (or leads were not as “hot”) and were early in the buyer’s journey. This means they were downloading white papers or case studies–and that they had more questions that needed to be answered first. Therefore, content marketing leads are much more like outbound.
Your prospects might request to be contacted but aren’t ready to demo–buyers often do a tremendous amount of research before contacting vendors. If they do this, then they have questions that they need to be answered before agreeing to a demo–and they expect your SDR to answer those questions. In this case, you’ll want more experienced reps on the phone with them.
5. Your Segment
This issue came up in three separate conversations that I had offline and at least twice in the thread. Inbounds in enterprise sales are rare. The majority of inbounds will be from the SMB segment.
Brett McNay pointed out that IB to OB makes sense if you’re in both; your SDRs can take inbounds from your SMB prospects to start and get all of the positive experiences we’re discussing in this article. They then move to outbound and upmarket. If, however, your space is all or mostly SMB, OB to IB can make sense.
6. You Want Your AEs Cold Calling Skills to be “Fresh”
I suspect that this is one of the most powerful factors driving most organizations to stick with the conventional wisdom. Leaders I talked to had a lot of concern about keeping someone in the cold calling mindset. I heard things like, “Once someone stops cold calling, they’re done–getting them to start doing it again is nearly impossible.”
This is certainly true for some people, but my sense is that this fear of fear is overblown. My sample size is small, however.
One of my reps was on outbound for a month, then did inbound for 11 months. We promoted them and they were shy about cold calling but found another way to get access and became one of our top AEs right out of the gate. The other example is me: I was a top outbound SDR for 18 months at ZocDoc, then took an account manager position selling to existing customers. I went on to become a mediocre rep at Indeed and a top rep at PatientPop before starting the SDR program (and both of those roles required cold calling).
I don’t think either of these stories tells us enough to make a hard and fast decision. My best guess is that you will get cold call reluctance from anyone who hasn’t done it very much. Part of your decision about the career path you build will involve deciding when you want to test for this reluctance.
To best avoid this situation, I recommend you screen for these qualities in your recruiting process.
7. Inbound Leads Aren’t As Warm As You Think
The word “inbound” can be misleading–and in fact, different people I spoke with meant different things when using this word. Sometimes an inbound lead is someone calling in to book a demo. Sometimes it’s someone who downloaded a white paper.
In the first case, converting might be easy: ask a few qualifying questions and get a time on the calendar. In the second case, your conversions might be less half of what you see from demo requests (or less!). You should optimize for conversion. To do that, you need someone to aggressively go after those leads. Now the job is much more like outbound, but with more risk because of the higher cost per lead. Having a proven converter with a hunter mentality on those leads minimized that risk–and makes much more sense.
What Should You Do?
Figuring out the right SDR career path is not easy and it’s going to be different for every company–or even the same company across different stages! But if you consider these variables–and how you weight them, based on your goals–you’ll be much more likely to make the right decision than if you go with the conventional approach.
“Conventional wisdom” is definitely conventional, but not always wisdom. If this career path is going to have a large impact on your business and your people (and when does it not?), it deserves real, solid, and extensive thought.
How will you build your SDR career path? What did I miss? Let me know or join the conversation!
