Automation in sales used to be something we’d only speculate about, but that’s no longer the case. According to Forbes, AI and machine learning have evolved to the point where they can be considered a threat to salespeople’s jobs. In fact, Forrester actually predicts that up to 1 million sales positions will be gone by 2020.
Does that also include sales development representatives, though?
While we don’t believe sales development representative jobs will completely disappear because of automation, we do believe that SDR positions will incorporate automation to a certain degree.
But to better answer that question, we have to look at another one first: Can AI and machine learning deliver more, accurate prospects, and better response rates from leads than humans?
The short answer is “yes, they can.” If you want to know more, we did some research and managed to find 5 reasons why AI-driven SDR software can outperform human reps:
1. Many SDRs Lack Experience and They Have Short Tenure
According to research from the Bridge Group, the average tenure for an SDR in a company is about 1.5 years. The problem with that is that it’s not enough time for someone to get really good at prospecting. Those who are the exception and do a really good job often leave the position for a better paid one.
Also, consider that the average ramp time for a sales development representative is about 3 months. Other sources claim that the ramp time for new sales development reps can go up to 6 months. Even if we only consider the 3-month ramp time as being the norm, that’s still too much time for such a short tenure.
Further research from Sales Hacker shows that SDRs are being hired with less and less experience nowadays – approximately 1.3 years of experience, to be precise. TOPO Blog also said that around 72.5% of high-growth companies are now hiring sales development representatives with only 1 year of experience or – in some cases – even 0 years of experience.
Starting to see the problem? You’re pretty much letting inexperienced people handle the top of your sales funnel.
Even worse, because of their short tenure, there really isn’t any time for a proper hand-off of the nurtured leads SDRs have been working on to the Account Executives. So, you likely end up losing those leads – not to mention all the time, effort, and money that was invested in developing them and training the SDR too.
2. Sales Development Representative Salaries Are Not Really Motivating
Let’s take a closer look at Bridge Group’s research. According to it, the average base salary for an SDR is around $48,000. The average total compensation goes up to approximately $75,000. That’s a monthly income that can range from $4,000 to around $6,250.
However, the average total compensation doesn’t only refer to the total salary. It includes paycheck bonuses (which can vary based on performance), and things like health insurance, on-site amenities, or even gym memberships. So, SDRs won’t be getting the whole amount on their paychecks. From a business perspective, that makes perfect sense. But from an employee’s perspective, that can be pretty demoralizing – especially if they live in an expensive city.
Now, with that in mind, consider the following – the average base salary for an Account Executive/Inside Sales Representative is $61,000, and the average total compensation is around $115,000. We’re talking about a monthly income that starts at roughly $5,000 and can go up to around $9,500.
Even if you consider what we just discussed about average total compensation, the lower sum an AE/ISR would see on their paycheck is still way more than what an SDR would get with their theoretical average total compensation salary.
Besides showing why many sales development representatives might not be very passionate about their work, that also explains the SDR’s short tenure we previously mentioned. Most people who have a sales development representative job just want to move on to the AE/ISR position as soon as possible. And if that’s not possible, they’ll likely try to move on to another SDR position at a different company that pays more.
What this all means is that you’re probably delegating prospecting, sorting through leads to find the ones that match your ICP, and reaching out to potential clients to people who might not be fully dedicated to their job, and just see it as a stepping stone in their career.
3. Sales Development Representatives Often Face Burnout
People like to speculate this happens because a sales development representative job can become pretty monotonous. That can be true, but we believe SDRs face a serious risk of burnout because of the sheer amount of data they have to go through when the company decides it needs to increase profits.
After all, if you want to increase your annual revenue, you’ll have to close more deals with leads. To do that, you’ll likely ask your SDR team to prospect more accounts each month, so that the number of deals you can close increases.
What does that mean for the SDR? That their workload significantly increases, obviously, to the point where they might face burnout and make errors.
At the same time, you could have your sales development representatives work harder on better matching leads with your ICP instead of getting more accounts, so that you have a better chance of closing deals with relevant prospects.
That approach makes sense, but – in that case – burnout and errors are unavoidable since we’re talking about cross-referencing huge amounts of data against each other to end up with a comprehensive list of qualified leads along with accurate contact details.
The only way to lower the risk of burnout is to have a huge team of people working on that (think an entire building), though that still doesn’t fully eliminate human error.
4. Strict KPIs Can Affect SDRs’ Work Quality
KPIs are necessary to measure work performance, but they can often have a negative impact on a sales development representative’s productivity and motivation.
Let’s follow up on what we discussed at #3 – the idea that you need your SDRs to prospect more accounts each month to increase your annual revenue. In that case, the number of calls they make or emails they send each day will be their KPIs.
The issue is that many SDRs – especially those who are facing burnout – will feel pressured by those KPIs to just meet the quota, and nothing more. So, they’ll be making calls or sending out emails that aren’t strategy-weighted.
As a result, your sales pipeline gets filled with unqualified leads who do not really fit your ICP, meaning you just end up wasting time, effort, and losing opportunities to turn a bigger profit.
5. SDRs Spend Too Much Time on Manual Tasks
Hubspot’s State of Inbound 2018 shows that a majority of salespeople spend anywhere between 30 minutes and 1 hour on data entry and other manual tasks each day. Depending on their work schedule, that amounts to 5-7 hours per week that are wasted on such tasks.
Don’t think it’s a huge concern?
Consider this then – that’s just more time spent on monotonous tasks which can contribute to the feeling of burnout, and it’s also time that could be better spent on actually prospecting and selling, not to mention engaging with leads and preparing them for their transition through the sales funnel.
How Exactly Does SDR Software Help with All That?
The main thing SDR software can do for your business is to take some of the burden off your sales development rep team, so that they can focus more on lead development. Here’s a quick overview of how that would work:
- SDR software can help you create better, more accurate ICPs by using machine learning to cross-check your current customer base against your customer success data to derive a specific, actionable profile.
- AI-driven automation makes it easier for you to qualify leads by sourcing up to thousands of accounts that match your ICP from numerous databases. It can also help you better understand each account by acquiring and validating relevant info about it (like preferred communication channel and possible introduction paths, for instance). The information is delivered in an actionable format, so no manual data entry or other similar tasks are necessary.
- SDR software helps you reach more leads by automating the process of sending and writing emails, as well as follow-ups. Personalizing emails is also made easier through the use of templates, account-based marketing techniques, and 3-tier personalization that makes your messages much more relevant to your leads.
- Automated sales development heavily relies on split-testing your entire prospecting campaign. The performance is tracked around the clock, and A/B tests are run on anything from landing pages and email subject lines to CTA forms and message tones – all to make sure leads will be more likely to respond and listen to your proposal.
- SDR automation can take care of appointment setting on behalf of your SDR team. By relying on integrated scheduling applications that automatically fill up your calendar with appointments, it’s completely possible to forgo the difficult process of trying to find a time that works for everyone.
And here’s the best part – all of that can amount to a ramp time of a few weeks at most.
So, Does SDR Software Mean Sales Development Representatives Will Eventually Become Obsolete?
No, of course not. SDR automation isn’t meant to “steal” sales development representative jobs away from people. It’s just meant to make an SDR’s job easier and increase a company’s revenue by handling the more difficult, repetitive, and time-consuming tasks that involve sifting through a huge amount of data.
This way, your sales development representatives get to focus on what should be their main priority – engaging with relevant leads, and properly nurturing them so that they’re truly ready to be handed off to an AE when the time comes.
This probably won’t have an impact on an SDR’s tenure, though, and many will likely continue to aspire to get promoted as soon as possible. It’s just human nature – people want to feel like they’re making progress. And it’s not like you can start offering an SDR an AE’s salary.
However, even during that short tenure, your sales development representatives will be able to give you better results in the form of more qualified leads and deals to close. Plus, consider this: An SDR’s ramp time might go down if you automate some parts of the sales process, saving you time and money on training.
The bottom line is that SDR software is meant to work alongside your sales development representatives. It’s there to empower them, not replace them.