The SDR role as we know it is dead. It stopped working a long time ago, but companies were flush with VC cash to fund it and often couldn’t see just how unsustainable it is. They see meetings booked, MQLs, and SQLs, but can’t see the real cost to produce actual revenue from an SDR team.

3,000 to 6,000 outbound activities to win a customer.

5,000 to 10,000 “inbound” follow ups to win a customer.

Every study shows different conversion rates, but they all land in this ballpark. It’s completely unsustainable.

To solve this, AI has attempted to replace SDRs and the results are just as bad. We took something that didn’t work and automated it. We should be unsurprised it’s still not working.

Here’s a breakdown of why this is happening and what to do about it.

The Window Has Closed

There was a time when most buyers learned about products primarily in three ways; through advertising, search engines, and/or through cold calls from salespeople. We didn’t have the type of content we have today nor the industry networks that provide so much Word of Mouth advertising and recommendations.

Prospecting into them, especially if they just visited the website, was a lot easier and building an SDR team was the way to build “Predictable Revenue.” It worked for Salesforce so it could work for every B2B SaaS company on the planet, and it almost did, for a while.

This worked at first because it was hard. It was hard to find contacts. It was hard to pick up the phone and call them or to write them an email. It took effort to get the message out…until it didn’t.

Tools like ZoomInfo, Outreach, Salesloft, etc. made it 100X easier to do this. Suddenly, all SDRs had to do was roll out of bed and press “Send All” and they were done for the day. Many did. It worked. And then it stopped working.

Every buyer’s inbox was flooded with sales messages and getting their attention got significantly harder.

We Created a Vicious Cycle

As reply rates plummeted, we responded by increasing activity quotas. Buyers got even more emails and ignored even more of them. Logging 100, 300, 600 activities per day (real numbers I’ve seen from SDRs) means that there’s zero research being done, zero personalization. It’s just pure spam.

Unfocused Prospect Lists and Irrelevant Messaging

These high activity quotas required casting a very wide net, trying to be all things to all people in a single email, or sequence of emails. Prospect lists were extremely unfocused, targeting dozens of completely different roles in just as many different industries with generic messaging.

Buyers ignore these messages because they’re not in any way relevant.

We go in depth on how to create relevant sales messaging – including the best way to segment lists and how to use sales triggers – in our free Modern Outbound Framework.

The Best Leads are Lost in the Shuffle

While doing all this, we neglected the best leads. Our absolute best prospects, the people in the best roles in the best types of companies, the ones that look just like our best customers – we mixed them in with all the rest.

Some of them came inbound, requesting a call or a demo and were routed to the people least qualified to convert them: Inbound SDRs. While there’s nothing wrong with an Inbound SDR, they’re often the most inexperienced people in the company. They’re fresh grads and/or have little to no sales experience, have not been at the company very long, don’t know the product well, and understand the customer even less. The Inbound SDR role is seen as a place to “cut their teeth” before they start doing outbound.

Why? Why in the world would we spend millions of dollars to market to our best prospects just to hand them over to an Inbound SDR to “cut their teeth?”

On the flip side, as we go outbound, we take the absolute best prospects that haven’t yet requested a call and spam them with the same generic messaging we are sending everyone else. Our conversion rate on this messaging is near zero so we miss almost every one of our best prospects.

Learn more about adjusting your messaging strategy based on account tier in Operationalizing Outbound Part 3. Here’s a preview:

SDRs Don’t Understand Closing

The benefit of having SDRs is supposed to be a steady flow of qualified pipeline for AEs to close and a steady flow of salespeople to grow into future AEs. Unfortunately, neither of these is happening very often.

SDRs are pressured to crank out extremely high activity levels so they never research or understand the customer. They get one on the phone and try to pass it to an AE as fast as possible. This creates two major problems.

First, AEs now have to convince the prospect to engage which means they have very low conversion rates and we’re paying two people to do the same job. This dramatically increases our CAC (Customer Acquisition Cost) which is at unsustainable levels for most SDR teams today.

Second, SDRs never learn what a good deal looks like, so when they do finally get promoted to AE, they can’t hit quota. It’s hard enough to learn how to close qualified deals, but they suddenly realize they never learned how to even generate qualified deals and they’re stuck with the leads the new crop of SDRs is feeding them.

This often means the company spends +$100,000 to train the SDR, just to get a couple deals that actually cross the line, and then lose the SDR. They get promoted to AE and wash out, or, more commonly, get impatient and take an AE role somewhere else.

There’s a Better Way

To fix this, we simply need to go back to the basics. We need to set revenue goals for SDRs and teach them how to generate real pipeline AEs can close. We need to hold AEs accountable for prospecting and generating their own pipeline so they also know what good looks like and can coach SDRs to help them learn and grow.
We need to drop activity quotas significantly and focus on quality over quantity, by building tight lists of the best outbound and inbound prospects and segment them by role and industry/company type. We need to draft relevant messaging sharing problems and solutions from people and companies like them.

As SDRs and AEs both prospect into a significantly more focused list, they should work together to generate real qualified pipeline and then partner together through the sales cycle so that the SDR can grow into the AE role.

This results in more real pipeline generated with more of the best prospects and, by definition, higher Close Rates, shorter Sales Cycles, and higher Average Deal Sizes. It also results in lower CAC and greater job satisfaction for SDRs that are “cutting their teeth” in a pretty unpleasant job while trying to learn and grow into that AE role.

For more on how to build an Outbound Prospecting Engine with this greater level of focus, check out our Modern Outbound Framework.