What is one of the most serious issues with sales development representatives (SDRs)?
The main issue with SDRs is the simplifying of the function and the excessive expectations that sales leaders and founders frequently have, because generating pipeline is not as simple as flipping a switch, especially in a startup environment with numerous unknowns.
Is it possible for SDR teams to thrive in the absence of proper management?
No, SDR teams require sufficient leadership and assistance to flourish, as many organisations fail to recognise the value of leadership before recruiting SDRs, resulting in poor results. For smaller teams, fractional SDR leadership might be a reasonable option, but quality leadership is required to validate channels, tactics, and ensure success.
What are some tactics for recruiting sales development representatives (SDRs)?
One-sentence answer: Part-time students, seeking for talent outside of the usual SDR hiring profile, and employing a repeatable process with a series of best practises to match expectations and bridge business acumen gaps are all strategies for hiring SDRs.
Ricky Pearl: Today on a Couple Of Pointers Podcast, we're lucky enough to have Seth List
SDR nerd extraordinaire. Interesting title. Welcome.
Seth List: It seemed the most apt. Thank you. It's nice to be here.
Ricky Pearl: Mate. So the one thing I do know about you exceptional at building outbound teams, and I wanted my audience to get some exposure to your experience in setting up teams and learn from some of the things at work and potentially learn from some of your mistakes too.
Seth List: Yeah, please.
Ricky Pearl: Right? So, let's kick it off, like where do we start?
What's one of the biggest problems you find when sales leaders come to your founders come to you going I want an SDR?
Ricky Pearl: Like maybe tell me what's one of the biggest problems you find when sales leaders come to your founders come to you going I want an SDR.
Seth List: Yeah. I think that we've genericized the function. I think that there are a lot of people outside of sales development that have a singular perspective review on sales development. Specifically there's like a very tactical function that you can turn it on and off, like a light switch, right?
Like I want an SDR team and I flip the switch and now I've got butts and seats and dials being made and pipeline falling outta the sky. And it's just [00:01:00] not that easy. And it's
Ricky Pearl: Pipeline doesn't fall out of the sky?
Seth List: I mean, on occasion when you're really lucky I read something about manifesting your own luck.
But no, in general, especially in a startup environment, there's just so many unknowns. And so it's not that it's not worth the effort, but a lot of my consulting work with founders is helping to level set their expectations on how this goes, what it takes, what's realistic signals to look forward to tell us is it working? Is it failing? Do we need to try a few more things and stay the course?
It's not just about the dials, it's about analyzing the dials
Ricky Pearl: Yeah, I think that's, for me, I think the main thing that people get out of early stage SDR teams is learning about their product in your market. Finding what works. That little bit of trial and error with a good SDR leader. Cause it's not just about the dials, it's about analyzing the dials. Right?
Seth List: Yeah, I think that's the other common misconception is the idea or the notion that because sales development worked in one business at one point in time, or even over a period of time, that not only that concept, the notion of an outbound sales development team, but the plays specifically that were run and business A can be picked up and dropped into company B and that the outcomes will [00:02:00] remain the same.
Ricky Pearl: Mate, they go one step even further. I see these adverts all the time, like must have experience in tech sales as if just plucking it out of any tech environment just will manifest into the same outcomes somewhere else.
Seth List: Yeah. Certainly no knock on some of the thought leaders out there, but they're very prominent folks on LinkedIn often working for companies, selling to other sales leaders, and like that buyer seller context matters so much. What works for an SDR selling a product to sales leaders, right?
The motion, the number of steps, the style in which you message 'em, how you overcome objections, fundamentally different if you're selling to an IT buyer or selling to an HR buyer or selling to a finance buyer, right? And so it's not that those thought leaders aren't sharing best practices that work for them is just that best practice may not work in another context.
And you have to be smart enough to go find the hidden gems and say their business is very different from mine, but some of these core principles are worth testing. And once I validate them for myself, then I build on that and I scale them and I do it more and I share it with my peers. But to just pick it up and drop it from one team [00:03:00] to another even within the same business sometimes doesn't work.
Have been in companies that have had teams across the country, across the globe
Ricky Pearl: Yeah you would've seen that cuz you've been in companies that have had teams across the country, across the globe.
Seth List: Yeah, my last role with Talon One I had responsibility for a global SDR program, so that was three distinct regional teams. My America's team, my EMEA team, and my APAC team, and all three of those markets. What worked in one was very different from one, what worked in another. And then looking at EMEA specifically, I think you see the much most variance in the submarkets within EMEA in that region, right?
Like that's the Europe, Middle and Africa. Like how do you.
Ricky Pearl: Like to group Germany and Nigeria into the same bucket is like in terms of how you're gonna reach out, like in Germany, it's gonna be like a pretty formal structured introduction. In Nigeria, you're gonna be WhatsApping them at midnight.
Seth List: Even Germany compared to Italy or France or the Netherlands. Right? Even within the broader Europe, you've got a lot of disparity between business etiquette and
Ricky Pearl: Yeah. I keep getting told if you calling in Spain or in France and you're not [00:04:00] asking the person how they're doing and how their day's going, like it's rude, like it's outright rude. Whereas in the US you ask, how's your day been? They're just gonna hang up on you.
Seth List: Yep. Yeah. And the beauty of, I mean, the whole notion of Seth List SDR extraordinaire. I've been doing this since 08, and the function and the way the businesses think about supporting and enabling the function of sales development has evolved significantly over the last decade plus. And so we now have, in a tactical sense, we have tools and data at our fingertips to actually tell us what's happening. I grew up in a time where my tech stack was outlook in Salesforce, right? Like I created all my own tasks. I sent every email not knowing if they ever got opened, much less how many times, or whether things were clicked.
Like the only signal I got was when I got a reply. And so to be able to, as an SDR have visibility into, your prospect's interaction with your messages or not a tool that tells you specifically what to do and when, and likely some sense of the messaging to use. I mean, that's, it's crazy. It's cool.
And from a leadership standpoint, as you think about that revenue engine, right, it gives you really [00:05:00] valuable insights about what's happening in the market, right? What is the efficacy of our outbound effort?
How do you differentiate yourself now?
Ricky Pearl: It does create a bit of a challenge though when it was you with outlook, your drive, your ambition, your, I don't know, your ability to create a structure and an approach in a system to your prospecting, set you apart. Nowadays, it's how do you differentiate yourself when hundreds of thousands of sellers are auto sequencing using some tool to generate the similar copy and sending it according to your disc profile.
Cause there's so many tools now that were analyzed you as a buyer to determine the style of the message. Like how do you differentiate yourself now? Like back then hard work was enough.
Seth List: Yeah. So in some ways it's a much harder game for SDRs in the field today than it was 10 years ago. But in other ways it's not in that, we're in an attention economy. I think the thing that a lot of SDRs fail to recognize early in their careers is that, they really wanna be trained to overcome objections, and that's often an objection on your product, on the basis of in-house solution or alternative vendor.
But before [00:06:00] we can worry about that, we have to get somebody to pay attention to us. And there's a ton of competition just in the inbox, right? Like the variety and multitude of vendors and a buyer's inbox, right? You're, as an SDR, you're not necessarily up against a competitor in the inbox, you're just up against other SDRs that want attention from that buyer.
So I think some of the things that have worked for me historically one of the things that might be a bit unorthodox in my approach is just owning what I don't. I think one of the biggest challenges for SDRs today is that our buyers know infinitely know more about their business and their role than we ever could.
Right. Even SDRs that later in life transition from some other industry entirely into this world of wild world of tech sales, right? You lack business acumen, an understanding of how the various sub-functions within marketing differentiate from each other and what that means for how you position your product or approach someone with Title A versus Title B.
Right? Programmatic advertising. What does that mean?
Business acumen is so hard to teach
Ricky Pearl: That business acumen is so hard to teach cuz it does take [00:07:00] time to learn. To learn how an enterprise makes decisions. I could teach you the structure. This person reports to this person who reports to this person. But unless you've been in an enterprise buying environment where you learn the nuance of the politics, it's hard to explain to someone.
Seth List: Well, here's the thing though. You've got enterprise, I've worked with a lot of really accomplished enterprise sellers, 10 plus years of experience, closing six and seven figure deals, consistently and performing, and they'll tell you too the way that one organization buys does not necessarily mirror the way that another organization buys.
And I think one of the keys for any client facing seller SDR, opening conversations, AEs closing deals, CSMs, managing relationships and renewals, is to stay forever curious. Don't assume that you know anything, right? And even if you think you know something, work to validate it, right? Just because somebody said it to you once does not mean that same thing holds true a month from now. Right?
If we look at today's market, people that were on staff 90 days ago are not there anymore, and that materially [00:08:00] changes the relationship and the process between the buyer and the seller. And so,
Ricky Pearl: They could restructure based on that role not being there. Politics changes based on that role not being there. Priorities changed based on that role shift. Everything can be different from one role. Moving on. Now here's the problem. This is a lot of context and we building SDR teams. I'm a firm believer that an SDR team, for many of the reasons that you've spoken about, cannot thrive without dedicated SDR leadership.
So a lot of this nuanced knowledge doesn't exist within someone who's in their first two years of a sales.
Have you seen teams thrive without SDR management?
Ricky Pearl: Have you seen teams thrive without SDR management?
Seth List: No. The lion's share of my consulting clients are our organizations who took the step to hire SDRs before really thinking about leadership, who nested them under a sales leader whose, day-to-day responsibility is tied to getting the deals done right. And so opening conversations is pretty low on their list of priorities and really ambitious talented early SDR talent.
They fail because they're not supported by the business.[00:09:00]
Ricky Pearl: Yeah.
Seth List: My consulting practice is largely fractional SDR leadership, right? If you only have one or two on staff, it doesn't make business sense to bring in a heavy hitter like me with 15 years of experience on a full-time basis, right? That's just, unless you plan to go from two to 10 in a three to six month period, you've get that budget approved, you've got the recruiting wheels in motion. And even then, unless there are nuances or complexity, there's, global responsibility and, but if you've got a small team SDR sitting in one office or in the same country, you wanna bring somebody in at least 10, 20 hours a week to provide that level of
Ricky Pearl: Well at the moment, those junior SDRs have probably been told, just grind through it, right? Pick up the phone dial. They're not really channel validating. Would email be better? Would LinkedIn be better? Would calling be better within those, or maybe email's not working for them, so they decide to go off email.
But what about the quality of the email? What style are they using on the email? What tactics were they using via email? Who's to say it's not working? What they tried might not be working. But they're just taking a guess based off what Josh Braun said on LinkedIn that day. [00:10:00] They don't have the 15 years experience like you do.
So I see it all the time and I've got this terrible saying. I'm actually gonna ask you to figure out a better saying.
SDR can't survive in the wild
Ricky Pearl: I always say like, SDR can't survive in the wild and it's terrible cause it diminishes what the SDR. But what I mean by that is the role needs, structure, enablement, management, leadership, technical support.
It needs a world's worth of an ecosystem around it for it to really thrive.
Seth List: Yeah I will think on that, but I like it a lot and I don't think, I mean, look, I don't think it's insulting by any means. You think about lions born in the wild, right? They're not just like left to their own to figure out how to survive. There's a coach, there's a guide, there's someone to show them how the world works before they're left to their own devices to survive all on their own.
Ricky Pearl: And it's still brutal out there. Half still won't. The half that do unequivocally needed support to get there. I need support. I need it in my business, I wouldn't, as a solo operator I've got a lot of gaps and I need to fill those gaps with talented people. So now you're a sales leader, you're a VP of sales, or you've just recently come on [00:11:00] as a head of sales for an organization. You need a fixed top of funnel. You wanna hire someone to help you bring in leads.
What's the starting point?
Ricky Pearl: Let's not even call it an SDR because there's a whole world out there as well that doesn't even use that terminology, right? They just wanna bring in a junior salesperson to bring in more prospects. What's the starting point?
Seth List: I mean, for me personally, it starts with a lot of questions. Right? I would be doing that business whether an employer or a consulting client or just a friend. I'd be doing them a disservice if I move to recommendations without asking a whole bunch of questions about how things look and work today. Part and parcel of that discovery is like, what are the expectations?
As an employee, I don't always have the luxury to reject pie in the sky goals as a consultant, if I'm working with a founder who says, I have an expectation that we go from zero to 10 million dollars in outbound source pipeline in a 12 month period, it's like, I'll still ask more questions, but the likelihood that is attainable, it's pretty low, right?
And so I say, Hey, good luck to you. I think you're setting yourself up to fail. There are some things you can do to make a dent in that, and [00:12:00] here's what that looks like. But yeah, there's, to my point, there's no single playbook. I can't come in and say, do these things in this order and it will guarantee success.
Ricky Pearl: If you did have a playbook, I'd want yours. Like I've seen you do it so well. I'd want your playbook. Well, let me ask you a few, I guess, tactical questions within that playbook. Here's a challenge that sales leaders will be having. They have a hundred grand to dedicate towards an outbound function.
They've decided we need an SDR. The challenge I find here is you hire an SDR, you pay the money that you've budgeted. Within four months, that SDR could technically fetch more money than that somewhere else in the market because now they've got experience. Like it doesn't matter what you're paying at four months later, they could fetch another 20 grand or another 15 or another 10.
How do you retain talent when you don't have a very fast moving organization where you can straightaway pluck top talent out into account executive roles or higher paying?
Ricky Pearl: How do you retain talent when you don't have a very fast moving organization where you can straightaway pluck top talent out into account executive roles or higher paying?
Seth List: So this is less about, I mean, it's business strategy, but what you're really talking about is [00:13:00] leadership, right?
Ricky Pearl: Well, it's just a challenge that I find with this SDR role is that it's ephemeral in that it's so temporary within people's careers that it's hard to build it in as a continuous business function.
Seth List: I'm the outlier in this, but I cognitively, logically, I understand what you're saying and I know that to be true. That the SDR role is ephemeral for nearly all people in their career. I have made a very long, healthy, lucrative career staying in sales development. And so I sell it. I sell it as an opportunity to have a lot of fun, to learn a lot about how businesses work, to make a bunch of money and to keep the overall stress level relatively low as compared to an account executive role.
Right? Doesn't necessary win, you win your battles in ones and twos, like you book the meeting or you. Right? For an AE that's got that deal that they've loved, maybe been working for 6, 8, 12 months. They've got it the line the signature ready docs are sitting in the inbox, right? And it falls apart.
The stress that you carry with every day that passes as an AE is significantly higher than that of an SDR. I think SDR is a fun, easy way to make [00:14:00] money, learn a lot about business, make some incredible connections and open doors. Get exposure to all different parts of the business to figure out where you actually want to go next.
I reject this notion that sales development is simply a launching pad for early sales talent to get into closing roles and to the, I mean,
Ricky Pearl: Listen, we purposefully try hire people who we think will stay in the role a little bit longer. And we've got our own little tactics to try and do that, but,
Seth List: So what do you, now I'm, I'll ask you a question though.
So what are your tactics? How do you approach getting somebody to stay in the role longer than the Bridge Group reports, Annual Metrics report says they should stay?
Seth List: So what are your tactics? How do you approach getting somebody to stay in the role longer than the Bridge Group reports, Annual Metrics report says they should stay?
Ricky Pearl: So I do it the same way I do all outbound. I'll take in all of these reports, all of these interesting things, I'll go like, that's nice. Let me just apply some logic here. Right? And usually if you start thinking outside the box, you'll find some very interesting perspectives. So, here's one for you.
What do you learn at University that makes you better at sales? In general I'd say there's nothing,
Seth List: Meeting strangers.
Ricky Pearl: Okay, sure. Some life experience like just from being a few years older. But broadly there's no like actual massive [00:15:00] skill that you learn in most degrees that will make you better at, say, being an SDR.
Seth List: Correct.
So why hire them first year out of uni when you could hire them first year in uni? What's the difference in the skillsets?
Ricky Pearl: So why hire them first year out of uni when you could hire them first year in uni?
What's the difference in the skillsets? Well, there's a difference in availability, for sure. So maybe you can only get part-time students versus full-time outs, but two part-time students earning an SDR salary as opposed to working at a McDonald's, you're gonna have them for the four years of their degree. So now you can have a full-time equivalent out of two students for four years. Versus just for their first year outside of uni, and it's the same individual with the same relevant skillset.
Seth List: So, I think your answer to me means you think about who you hire to some degree. I imagine you have other strategies for trying to extend
Ricky Pearl: Sure. I just think there's a lot of talent out there that doesn't fit the mold of people that are actively pushing a sales career uphill. Mothers returning to the workforce. Needing extreme flexibility. Like there's a lot of people who don't want to be an AE in a year. They've got other priorities right now.
Seth List: So where I'd challenge you though is just the idea that so you're [00:16:00] defining the typical SDR hiring profile and saying, I'm gonna go for the tertiary group, right? The people that share DNA but on paper don't look the same as the classic, fresh outta school with a 4.0 and tells you an interview I desperately want to be in tech sales, right?
I get a lot of those. I don't disagree with your strategy but when you pose the question to me that the way I think about it, how I hire as much as who I hire. For me, it's all about process. In the same way that when I enter a business and I do my discovery and I get a better understanding of things like the marketing machine and inbound contribution and the expectations of outbound, any evidence or wins that they've got so far, I'm gonna dig into customers, how many do you have?
Are they paying? Are they happy? Right? How well does our messaging align to what they think they've paid for? All of those things. And it's like, all right, let's go. There are, there's a short list of best practices. There's a starting place for me, right? In terms of the outbound, right? Do what works first, start there, read the tea leaves, and then make adjustments as you go.
Hiring is much the same process [00:17:00] for me. I'm gonna ask a whole bunch of questions about what are the needs of the business, the team, the budget we have to work with the supporting people and resources to get an SDR up to speed once we bring them on staff. And then when I go to hire, I'm running a repeatable process.
I'm starting with that series of best practices to see when I run my process, what comes out the other end. Because keeping SDRs in seed, it's a big part of selling on a job or on a product, is how well the expectations align with the received value or experience. And so, if I tell an SDR on the first interview, my expectation is that you spend 18 months in the role, and if that scares you off, you don't wanna do it.
Let's stop here.
Ricky Pearl: I like that.
Seth List: And I do that really early on, and I'm gonna anchor high, right? Sales selling strategy 101. I'm gonna anchor high if I expect 'em to be in seat for nine months. I'm gonna anchor in the interview at 18 buy myself a buffer. I'm also gonna use it as an opportunity to fill some of those business acumen gaps.
SDRs have been taught to believe that this is a logical career progression. I go from SDR to AE. Well, if my title as their hiring manager is SDR Leader. That means that I am not responsible for headcount [00:18:00] hiring on the sales side. It's all well and good that you crush your quota for a full year, that we've been working closely together to help you get ready for the selling role.
If there's no open job on the sales team, I can't just foist you onto that sales leader. Right? And it makes sense when you say it out loud, but it's something that the SDRs aren't, it's not part of the dialogue that they have when somebody.
Ricky Pearl: You brought up something interesting there.
How much time are you spending with your reps teaching them for the job they're doing now?
Ricky Pearl: I've spoken to a lot of SDR leaders and I've said, tell me the honest truth here. All right? Don't gimme some bloody textbook answer. How much time are you spending with your reps teaching them for the job they're doing now, i.e. how to be a better SDR versus for the job that they want, i.e. an account executive or something different and 99% are starting, to be honest, we barely have enough time to teach them how to do the job. So at the end of the year, they aren't necessarily, I mean, they've got a lot of business acumen out of it. They've got a lot of experience, but they haven't been purposefully trained for an AE role.
Seth List: That's fair.
Ricky Pearl: I mean, maybe leaders like you, this is what I'd love to hear from you.
You're the beacon
Ricky Pearl: This is just what I'm hearing from a lot of others. So, we've got you on here because you're the beacon.
Seth List: Well, you let me know if you hear [00:19:00] otherwise. I think you probably know some of the folks that have reported to me in the past, I spent as much of my time as possible teaching the folks I hire to be fucking excellent at the SDR job. Because I love it and I'm passionate about it, and I set that expectation in the hiring process that my job, first and foremost is to help you find success and joy and some pretty big fat paychecks, right? Finding success as an SDR. And until you do that's the other piece of this is that working with people is a partnership, whether it's manager report, whether it's cross-functional, right?
We're like in a little, I'm reluctant to use the word family, right? While not necessarily romantic or intimate, these are personal relationships. We have to be able to count on each other. There's a give and take in that, right? So my agreement to my SDRs is, come in, put your head down, show me that you're willing to do the work to be an excellent SDR, and I will champion you anywhere you want to go.
Ideally, that's somewhere within the organization, but if you want something that we don't have, I'll help to get you there. But you gotta earn that first, right? You can't come in with a chip on your shoulder and a sense of entitlement that you just [00:20:00] check the box and phone it in for six months as an SDR and you're guaranteed an AE job.
That's not the way that I work personally as a manager, and I don't wanna be a part of a business who's given those AE jobs out to folks who haven't earned them and who aren't ready because the other piece of this, and again, filling in some of the business context for candidates in the pipeline.
I refer to that bridge group report all the time. I'm like, the data says the sooner we promote you outta the SDR role, the higher the likelihood you fail as an AE, right? It's not that I'm keeping you on the team to be selfish. I love you. I hired you. Stay on the team, right? But if you really think you're ready to go, we need to have an open discussion about that and engage my peer, who's the sales leader, to get their expert eyes on you and help us all understand what do you need to learn?
What do you need to prove before we make that jump? Because it sucks to say goodbye to someone, whether because you promote an SDR too early and they fail and exit themselves, or you promote them too early, you don't support and enable them. They misquote as they go on a PIP and then you manage them out.
Both situations are really painful for everybody involved, and when I explain that to a candidate in the interview process, they either make a decision that like, oh, this guy knows what [00:21:00] he's talking about. He's willing to be transparent and honest with me upfront. This is someone I wanna work with.
They're headstrong. They've got confidence that they can go be an AE somewhere else in nine months and they say, Seth, thanks, but no thanks. And they go chase the other job and that's fine. Right? Because hiring people like that for me is setting both of us up to fail cuz it's just not the style in which I lead or manage or develop talent.
And if they want something different, I want 'em to go be happy elsewhere. So I actually refer a lot of candidates out to other hiring authorities that have different genetic makeup, slightly different philosophies about leadership. Not right or wrong, just fit is a really important thing. We got a lot of years in our life to work and I don't wanna be miserable.
Ricky Pearl: And I love that.
Ricky Pearl: It's a great long-term mentality, and this is a long game. Like this really is a long game or infinite game, and people don't realize that. Like they want to know where they're gonna be in 18 months time, but they forget like what's gonna kill them is when they 39, 40 years old, starting to develop heart conditions from the level of stress that they have. It's not necessarily what's happening right now or next year and take a long-term approach. I'll say [00:22:00] to all of my SDRs, whether you could earn 10 grand more now this year, just 10 grand this year or not is gonna be irrelevant.
If you have a potential to earn half a million dollars in five years time, when eight years time in 10 years time, like the half a million dollars makes this 10 grand irrelevant. Do whatever you can now to put yourself in a better position to earn massive money in the future, and that's an investment.
You'll spend hundreds of thousands on your university degree, but people won't earn 10 grand for a better learning environment where it's gonna set them up for a better future. So we're always looking for people that are forward sighted, and the way you put it is just, clearly you've done this before and it's so well thought out. Do you, when you come to a company and you're bringing this in, you've obviously got this massive playbook. You've got a hiring playbook, you've got a, and how to actually set up the technical side. You've got the, channels and what, how, whatever you're. What's your process like for a company to set up outbound?
How long does it usually take until they go from zero to outbound?
Ricky Pearl: A founder comes to you. We are looking to build an outbound function. They're making all the right noises. They've got the right goals, all of that. [00:23:00] How long does it usually take until they go from zero to outbound?
Seth List: I mean it, I hate giving this answer, but the truth is, it depends. If I just if I try to simplify it or summarize it, it's at least six months .If you're going from no one on staff, outbound has never been done or it's been done in the past, but today there's no outbound activity whatsoever.
And the job I'm taking on is to build a team and build a program that results in butts and seats and phone calls and emails and LinkedIn messages live in the wild. Six months till you've got a team in place with something resembling ramped SDRs.
Ricky Pearl: Yeah I think that number's like, honestly accurate. I think everyone would sell it as three. But it's, everyone all said it as three. But the thing is you can't put it together in three, I don't know, like a bolognese. You can put all the ingredients in the pan at three, but it needs to fucking simmer together, right?
Like it needs some time to resolve itself.
Seth List: Wrote down the word ingredients. My wife and I are big foodies and cooks, but yeah, it's like my first effort is to just assess the ingredients in the pantry, right? Somebody's asking me to prepare a [00:24:00] meal for six people, right? I gotta go see what's in the pantry. I gotta see what equipment I'm working with, right?
It's the same inventory that I do coming into a job. In our world, we call it discovery, right? But it is, it's an inventory and an audit. Like just what do I have to work with? Things like recruiting, support, they matter. If I come in and you say, you get a, my CRO says, you've got a giant budget.
You got a million dollars to go hire SDRs this year and fund your tech stack, right? Do I have a revenue operator that I can partner with on the tech stack, or am I gonna have to learn this myself? Can I dip into my budget to bring a consultant in because I'd rather pay the money than try to do it myself.
I'm better than a frontline SDR. Propping up Salesforce and outreach from scratch. But can I do it in my sleep? No way, right? There are other people out there that can do it. Do I have access to an internal recruiting resource? Are they dedicated to my function? Are they in my time zone? Do they have experience hiring SDRs?
Right? All of that is gonna affect how much time it takes to get people in seat and a tech stack configured and some early messaging developed such that we can actually now start to go test against the [00:25:00] market. So at Talum One last year, we spent the better part of the calendar year getting the team propped up.
Running hundreds of experiments to understand and identify where outbound could be most successful and impactful for the business. Knowing that we could call across a number of industries, we had unique buyer personas, three different ones, right, that we had to account for. We had a really strong inbound motion.
Right? And all of this is part of the mental equation in terms of what is outbound meant to do. Running experiments to say what is outbound capable of doing, and then amend the plan and the models to account for what's actually happening in the wild. I mean, that all takes time.
Ricky Pearl: Jesus, man. I'll just, I love the way you put it. I mean, I could chat to you for hours and we don't have hours. So, let me ask you just very quickly, like a very simple topic. We've dug into some really meaty pieces here, and I think like, yeah the topics that you've discussed here are what mature sales leaders would be discussing if they were having honest conversations as opposed to the quick on the fly in between meetings.
Five minutes. Listen, I just [00:26:00] need lead a conversation.
Your SDRs, were you under pressure ever to measure them on KPIs that weren't relevant?
Ricky Pearl: Your SDRs, were you under pressure ever to measure them on KPIs that weren't relevant?
Seth List: Certainly not at my last gig. I worked with a really incredible collaborative, realistic group of folks at Talon One. I have been in other organizations where there is just that constant pressure to manage to fluffy bullshit activity metrics. I mean, it's not that activity is bullshit.
You don't talk to people if you don't reach out as a cold caller, like you have to cold call.
Ricky Pearl: Activities like it's a leading indicator, but it is not a KPI. Like, yeah I dunno, it's yeah. Anyway carry on
Seth List: So just as an example, last year, right, Talon One we built, I built the outbound program from scratch with a lot of help cross-functionally rev ops and demand gen and marketing and sales leadership, right? It was not a solo effort by any means. I did not have a team of SDRs crushing quota every month.
I just didn't. But part of my job was to say to the business, while we weren't attaining quota one, we pulled that number, we plucked it right out of thin air. When you'd have no historicals, you've got nothing [00:27:00] to base forward-looking quotas on. And what
Ricky Pearl: Some of the best creative documents I've ever seen in my life are not novels. They are quota allocations,
Seth List: Yes.
Ricky Pearl: You know, just sucked out of some an imaginary metaverse. Anyway, yeah, carry on.
Seth List: But the I parted ways with that business on incredibly amicable terms, small round. A few of us were relieved of duty, but leaving that organization, I was really proud of the fact that I could say, coming into this job, January of 2022, we had zero outbound pipeline, right? There was no outbound team, no pipeline generated as a result. By Q3, we were at parity with inbound pipeline equal dollars. Sitting in the pipe generated through inbound and outbound, and by the time we closed the year, there was 15, 20% more outbound pipeline sitting open, owned by sellers than there was on the inbound.
So the lagging indicators matter as well. We need balance, right? We can't lose sight of one at the cost of the other. And that's both over-indexing on activity at the cost of what's actually happening as a result of all that activity. But conversely, if I had a huge pipeline, [00:28:00] but I was really lax with the team and didn't set any expectation around daily or weekly activity standards.
Right? Then I should fully expect that, that we're gonna bottom out. Right? We may have created it, but if we don't maintain that, the image I get I'm also a super visual thinker. But that, and I don't know if they've got it and your neck of the woods necessarily, but that arcade game where you just, you pump the coins in and the tray slides back and forth.
Right. And when the coins. When the coins get pushed off the,
Ricky Pearl: Yeah.
Seth List: Yeah. And you could spend hours there, right? Control your controllables. I can pump coins in. I get to decide when and what angle and all of that, but I can't control the outcome. That's sales development, control your inputs, right?
So we gotta keep tabs on how many are coming in. But as a business leader, as a leader at the executive table, you've gotta care about what falls off the ledge, right? How many of these deals are actually turning into customers, how many are happy, healthy customers? How big are the deals relative to, the inbound channel, right?
Ricky Pearl: And I love that. I'll ask one of the things I say to all of our prospects in discovery. So if all you want are leads, new pipeline,[00:29:00] we are not the agency for you. If you're also interested in every prospect that says no, and you really wanna understand why, then maybe we are a good fit. For us it's as interesting what's not working because that is where more than 99% of people say no to some marketing activity. So if you're not interested in how you can open up that 99%, then you know, all you need is, oh, I mean, it's still gonna be complicated.
It's just not.
Seth List: Yeah. Well, and especially in a startup environment with most of the founders I've worked with, I love 'em, but they've convinced themselves, they've got a unique value proposition that even if they fit in an existing category, that they're doing it just slightly different.
But it doesn't actually matter what we think internally. It doesn't matter what the founder thinks or the how the product or the CTO or the frontline seller, what matters is how the market perceives it.
20% negative response rate
Ricky Pearl: And I've got right now. We've got a campaign at the moment that has had a 20% response rate, which is pretty significant. An email only campaign, 20% response rate is pretty significant. But all saying no. And the founders convinced this is the market. I'm like, I've never quite seen such a large response to an outbound [00:30:00] campaign all being negative.
So there's a challenge here
Seth List: Something's broken or there's something that needs to be
Ricky Pearl: And that's why I'm here. I'm saying like exactly like, let's find the strategic gap. What is it? Is it the messaging? Is it maybe this isn't a good product market fit and we need to just change the market? Maybe it's a different, like whatever it is, different persona, different whatever. Lots of things we can do, but this isn't right.
Like this recipe didn't turn out the way we had planned. We're gonna have to change ingredients or something in along the way. And that's the part that I think people miss in outbound is that it is not just pipeline generation. It is an interface with your market.
Seth List: Yeah. Well, and I, credit words due I'm a big fan of Lars Nelson over at Snowflake. He's got probably a decade on me even. But, at Snowflake, like sales development has a seat at the table. He is a leader across the revenue organization, not just within this little pocket of sales development.
Cuz to your point, what I mean, this whole idea that SDRs are the tip of the spear. We tend to think about that in the sales context, right? Like the spear, they open up these things and they pass em off to sales. But the [00:31:00] product insights that SDRs can glean, even if they don't know they're doing it right, like even if we're just teasing it out of email responses and sentiment, if we're, reviewing call recordings, looking for keywords and signals that tell us like we're on the right track, but we're not quite there yet, right?
Because it's either product doesn't actually solve a problem that the prospect has, or it solves a problem, but not to an extent for them to make change. Right?
Ricky Pearl: Yeah. Might not be in the way they want.
Ricky Pearl: We mostly refer to it as BDRs here. We use the term interchangeably pretty much across the globe, but I have this Venn diagram where the BDR is in the center of sales marketing, cuz outbound in my world is still a marketing function, customer success and product. They really sit in between all four of those and it's a function that can bring it all together.
And we've got, we use SDRs as part of customer success to try identify where in the cycle there might be an opportune time to throw it back into sales for an upsell and the SDR will phone up the clients and say, Hey, Gary asked if you could get some time back [00:32:00] on your diary. Wanted to see how things were going.
I know you haven't spoken to Gary for the last year you've been dealing with Mary. Would you be free? And the SDRs are setting up meetings for the AEs to go for the upsell. We've got them taking all of their feedback to product saying like, this is why everyone's saying no. These are the integrations they've been asking for.
These are the questions that we've been objections we've been getting, like it is just so core to business, particularly for startups.
Seth List: So two thoughts. I know we're coming up on time here, one is that I think that, in the early days, right.
SDRs as the translator, the conduit
Seth List: If I think back to the 2008 to 2010, right? I think that there was an impression on the product side of the business that sales just complained about what the product didn't have, and it was to their detriment that like, product just won't build this thing and so I can't get my deals done right?
And it set them up at odds. I don't know that will ever go away, but I think it fails to acknowledge what we just talked about, which is that sales development isn't actually incentivized to get the deals done. They got no skin in the game really in most comp plans. SDRs don't make anything if the deal closes on occasion, right?
But most of their compensation is tied to getting that first meeting set or the opportunity qualified, makes 'em a [00:33:00] really wonderful, as a function, a beautiful resource to get product feedback straight from the horse's mouth on the prospect side, right? Because SDRs is not incentivized a lot to like create a sense of urgency or importance on a specific feature to get the deal done.
They're just really the translator, the conduit to say, here's what I heard from the market.
Ricky Pearl: Yeah. That's why I actually prefer the term business development as opposed to sales development. Cause I think it is about building the business as a whole,
Seth List: Yeah, for what it's worth my first SDR gig, we were actually market developers, not sales developers, which, I mean, some of this is semantics, but the other thing, and if you want to take it on as a fun and interesting art project, I don't have much in the way of design chops, but if we think about that Venn diagram and a confluence, I agree with you wholeheartedly.
The fun and interesting part is, how big the SDR segment is, how much it overlaps with each of those functions, shifts and evolves as the business around it evolves. So in the early days, right, sales development may be more tightly aligned to sales and marketing. In the very earliest days, maybe it's most tightly aligned to product, right?
And [00:34:00] then it shifts and it evolves. And the notion of customer success, how do we leverage SDRs with the really love
Ricky Pearl: I'm seeing a spider graph now.
Seth List: Yeah, like dances around, right? As the business changes and evolves, because if you don't have customers to prospect into, then the SDR is never gonna do that, right?
So their involvement with the CS function is non-existent in the early days. Fast forward 10 years where you've got deep penetration within the market, like huge market share within your category, right? Then the idea of leveraging SDRs to help uncover upsell cross-sell opportunities is much more relevant, much more impactful.
Ricky Pearl: Using internal referrals, following champions around, like, so much can start coming out of it. But mate, I could honestly keep going forever because these are the conversations I like to have with friends over coffee, right? Like, this is a passion and clearly a passion of yours and something that you have refined and thought about so much that it would be almost I don't know.
It would be daft for a founder to try and think of these things for the first time themselves, to figure it out for themselves when you've [00:35:00] spent 15 years thinking about these exact problems and they could just borrow your ear, borrow some of your time to save all of theirs and get it a hell of a closer to success, a lot quicker.
Seth List: Well, thank you. I'm flattered and I sell them my time. It's still trying to make a living, but yeah, it's fun. And it's fun at this point in my career to work with other subject matter experts in these early businesses who also bring deep experience in their functional area. I'm really enjoying being a student in my career as well.
Right? The idea of just staying humble and curious and human that's not just feedback. Best practices I pass down the chain. I try to live that for myself every day as well cuz there's there's just so much out there. Things continue to change and evolve and when you stop dead in your tracks, you die.
Ricky Pearl: Particularly in this game, it moves bloody, it moves so quickly.
How do they get hold of you?
Ricky Pearl: So, a sales leader or a founders listening to this, they've got ambition of building out a team. They're not necessarily looking to hire one SDR who's just gonna work with head of marketing, like they want to build out a proper outbound function.
Maybe they got some funding to do that. How do they get hold of you?
Seth List: LinkedIn is great. Put a little [00:36:00] note in the invite that will help me a lot. You can also get me at email@example.com. My inbox is open to all and I'm not the only guy out there like I definitely have a particular way of doing things, but it's been a lot of fun to find other SDR nerds practitioners with deep experience.
There are others out there like me with 10, 12 pushing 20 years of experience that care a lot about this. So as a founder, just find someone talk to a few folks before you go make hires and keep your fingers crossed.
Ricky Pearl: I love it. Thank you so much for taking the time to talk to us today. I learned a lot. You've definitely broadened my way of thinking. I've gotta do some deep introspection on our hiring practices. And maybe offline, I'm gonna get some advice for you on some of the other hairy challenges that we have in outbound.
Seth List: I'd love that.
Ricky Pearl: Thanks so much. We'll chat soon.
Seth List: Thanks, Ricky.