How to Budget for SDRs

Author:

Dan Seabrook
Reading Time: 5 minutes

Episode

120

How to Budget for SDRs

Aurelien Mottier

CEO at Operatix

Dan Seabrook

VP of Sales at Operatix

Building a sales development team is a feat worth investing in, that much is becoming common knowledge in the business world. Understanding exactly how to budget for an SDR team is the first hurdle to creating a successful team, yet is undoubtedly one of the most important. 

After all, it’s not just the salary that needs to be considered. SDRs not only have to be hired but onboarded, managed and provided with a tech stack to ensure success.

While necessary, these elements can take a significant chunk out of your budget, so it’s essential to account for this when allocating finances to creating a team of SDRs. 

To shed some light on the deliberation process, we sat down with Dan Seabrook, Vice President of Sales at Operatix, to discuss how to budget for SDRs, as well as interval vs external recruitment and the pressure for growth in the industry. 

How to Budget for SDRs

  • Salary
  • Tech stack and equipment
  • Outsourcing 

Salary

When starting to understand how to budget for an SDR, salary is likely the first aspect that comes to mind.

While once considered an entry point into sales, the appreciation and importance of having a team of talented SDRs has grown to the point where its now a strategic function in it’s own right. With this in mind, offering a competitive salary is essential in snagging the top talent.

“From my perspective, one of the most important factors to consider over the last few years is probably the increase in the appreciation as to how important an SDR function is within a business,” remarks Dan before going on to say, “That’s obviously increased what the top SDRs can command from a salary perspective.”

Not only has the increased demand of representatives caused a surge in salary, but the steep inflation in both the UK and US has had a significant impact on what companies are required to pay their teams. 

With this in mind, it’s essential to look into what other businesses are offering their new hires and ensuring you can match this. The more competitive your base salary and commission, the more likely you are to get those talented SDRs on board.

Tech and equipment

You can’t hire a team of SDRs – no matter how talented they are, they’ll need to be managed. Part of this is providing them with the tech stack they need to get the very best results. 

“Sometimes we make the silly mistake of just looking at the individual, but you’ve also got to manage the individual,” says Aurelien, “The individual probably needs more tools right now than ever.”

While this will, of course, vary per industry and business, a quality tech stack will likely include:

  • LinkedIn Sales Navigator
  • Conversational intelligence, such as Gong or Refract
  • Sales engagement platforms like Salesloft, Outreach, Cognism, Apollo.io, etc
  • Data platforms, such as Zoominfo or Lusha
  • Marketing automation, if this falls under your SDR team’s remit

When considering how to budget for SDRs, business owners often fail to consider the cost of equipment and training. Neglecting to leave budget for a technology stack and the education utilizing them requires can be a costly mistake – both financially and for your team’s success.

Outsourcing

While you may be keen to build your own sales development team, it’s also worth taking outsourcing into consideration – especially if you’re on a strict time scale and want to enter a brand new market.

“All of our clients are B2B technology, and their speciality is manufacturing, creating, developing and selling software, but their expertise typically is not in creating demand for that software or that technology,” explains Dan, “Actually being able to develop and scale an SDR team is probably one of the hardest things you can do.”

Outsourcing elements, if not all, of your sales team allows you to reap the rewards of talented SDRs in a more timely manner. After all, hiring and training new employees is not only costly, but can take months. 

Outsourcing your sales, on the other hand, gives you access to skilled SDRs who are experienced in tapping into new markets, lead generation and cold calling best practices, as well as being well versed in utalizing technology. 

Once enough demand for the service has been built up via outsourcing, you can then transition to keeping the entirety of your SDR function in-house.

Internal vs External Hiring

When it comes to hiring and onboarding, we all know speed is a defining factor. That will look different depending on whether you’re looking in-house or elsewhere.

If you’re growing a team, determine location and method, and narrow it down from there.

left quote
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The feedback we get from our clients, I think points towards not just growth, but the speed of growth.

Dan Seabrook – VP of Sales at Operatix

Does your hiring process scale globally? If you’re like us, you have hubs across multiple continents, serving diverse clients and juggling the needs of hundreds of people. It can make your head spin. But with a reliable, scalable hiring process, you can ease the weight of growing your team.

Determine key values

What talents are you looking for? Can you find that talent within your team? Are there transferable skills? All critical questions.

When time is of the essence, the benefit of outsourcing through an agency is that they’ve already evaluated skills. They already know what their people can do, the services they provide, and the timeline they can provide those services.

What do you need? How fast do you need it? Odds are, depending on your size, you can find it quicker by narrowing your search and pulling in a pre-vetted candidate.

Pressures for rapid growth

The market is shifting every day, and there is incredible pressure for growth.

“There’s certain companies out there taking 500 million or a billion dollars of funding in a Series B or Series C, they have more money, it’s as simple as that. They just have more money to throw at growth. And I’m not sure it would align with the most sensible business practices in some instances as to how to grow.” said Dan, on the changing market and whether this will have positive or negative repercussions. 

“It’s not good enough to grow, doing it over 10 years, [now] you’ve got to do it in two years. So I mean, condensing a lot of funding into a two-year period to spend it means that they’re throwing money around as much as possible,” continued Dan.

Measuring the full picture

When it comes to tracking budget, growth, and revenue, there will be different streams and structures—of course—and it’s worthwhile to pin down what’s coming from where.

“If you take your total top-line target, you’re going to have different areas where that pipeline is going to come from, that revenue, is going to come from. Some of it’s going to be marketing, some of it’s going to be from the ads, some of its going to be from channel partners, some of it’s going to be introductions by board members, and VCs and all of that, and some of its going to come from the SDR function,” said Dan, sketching out a picture of what those avenues may look like.

All in all, it comes down to company priorities and keeping a pulse on where your revenue is coming from, where it’s headed, and who is on your team. 

Don’t underestimate the financial impact of new hires and adjust your understanding of how to budget for SDRs accordingly.

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right quote

Being able to develop, scale, and make a successful SDR team is probably one of the hardest things to do.

Dan Seabrook – VP of Sales at Operatix

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About Operatix

Operatix is a Sales Acceleration company specialized in supporting B2B Software vendors to identify new revenue streams, increase qualified sales pipeline, and accelerate channel development across Europe and North America. Operatix has a wealth of experience in working with the biggest tech players worldwide as well as a multitude of emerging software vendors.

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Understanding buying centres, hierarchies and relevant personas in strategic accounts is a fundamental step to increase conversion rates. By leveraging account intelligence in a sales conversation your team can tailor their message and provide value to their prospective customer. But sales & marketing teams often struggle to dedicate time and resources to do the deep research and this is where Operatix can help.

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Operatix can develop Sales Playbooks that enable teams to sell more effectively. Your Playbook will be fundamental to implementing the correct messaging, accurately position your solution against competitors, and adapting the communication of your value proposition to different buyer personas.

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If your leads aren’t converting, it might be a lead qualification issue. Operatix can help filter through leads that need further qualification, ensuring that they’re ready for an AE or sales team member to engage with and progress through the funnel. 

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Vendors often spend thousands of dollars building multifunctional Partner Portals to help channel partners educate their teams, manage opportunities, and create marketing programs. Still, these portals are often underutilized due to lack of bandwidth and capacity from vendors to offer support in enabling their partner community. Operatix, through their Partner Development team, can support your partners to make the best use out of your partner portal, managing the relationship with your partners and helping them set up co-marketing campaigns to drive more revenue for both businesses. 

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Building an internal sales development team comes with many additional costs and challenges that aren’t always taken into account: recruiting resources, training and enabling them etc. You also need to take into account the need for having the data and tools to make them successful, which in turn requires time, capital and effort. By outsourcing your sales development to Operatix you will see your revenue increasing, while decreasing costs and business risk.

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Operatix helps your business get to revenue quicker. By providing qualified sales engagements for your direct sales team (to kick-off new sales cycles), or by accelerating the growth of your channel partners, our focus remains on delivering tangible results for your business. 

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