Sales Development is an important function in many companies today, but it can also be confusing. What’s the difference between a lead and a prospect, or a sales funnel and a pipeline? Is your company’s CAC higher than your CLTV and, if so, is that a good or bad thing?
Whether you’re new to Sales Development or an experienced pro, Sales Development has its own language; a language that’s constantly evolving. To help you out, we’ve put together a glossary of the most terms used in Sales Development and what you need to know about them.
ABM - Account-Based Marketing. A growth strategy, where high-value accounts are treated as a ‘market of one.’ Marketing and sales teams work together to provide selected accounts with a hyper-personalized experience. The SDR role of linking sales and marketing makes them a key component of any successful ABM strategy.
ACV - Annual Contract Value. The average revenue generated by a contract over a year (excluding any one-off fees, such as setup costs). A metric generally used by SaaS and other subscription-based businesses.
AE - Account Executive. A member of the sales team who focuses on closing deals. In most cases, SDRs will be tasked with delivering SQLs to an Account Executive for them to nurture and close.
AM - Account Manager. A member of the sales team responsible for managing customer accounts that have already closed.
Automation Software. Technology that carries out repetitive tasks on behalf of the user. SDRs can use it to save time by automating mundane low-touch tasks, allowing them to focus on more valuable high-touch activities. Common use cases include dialers and email automation.
B2B - Business to Business. A company that predominantly sells products/services to other companies.
B2C - Business to Customer. A company that predominantly sells products/services to individual customers.
Base Salary. The fixed amount paid to an employee, excluding any bonuses or commission.
BD - Business Development. Establishing and improving strategic relationships with complementary businesses with the aim of integration and cross-selling.
BDR - Business Development Representative. An alternative title for a Sales Development Representative (SDR). Used by some companies where the role has an increased focus on identifying new markets and making connections with businesses in those markets.
Bonus. An additional payment on top of the employee’s base salary to reward performance and meeting/exceeding targets.
Buyer Intent. Actions or behaviors by an individual/company that indicate they are ready to purchase a specific product/service. For example, SDRs may look for people who are already searching for a similar solution or engaging with sales material.
Buyer Persona. A profile that represents your ideal customer, describing the individual and their objectives, pain-points, behaviors, etc. The buyer persona should be based on research and existing customers. SDRs can use this information to tailor their messaging for leads that are a good fit. Different from an ICP, which focuses on the company.
CAC - Customer Acquisition Cost. How much it costs a business on average to acquire a new paying customer, taking into account all costs including overheads, salaries, and any additional spend.
Cadence. Literal meaning is a flow or pattern of events. For SDRs, your cadence will typically refer to the timing of your touchpoints.
CAN-SPAM. A US law governing the sending of commercial emails. SDRs should be familiar with the requirements and ensure that any emails they send are compliant.
CASL. Canada’s regulations regarding commercial emails, which prohibits the sending of electronic messages without prior consent and has additional requirements for the contents of any electronic messages.
CCPA. Regulations governing the rights of Californians concerning their data. It only applies to certain businesses, but SDRs should check they’re fulfilling their obligations when handling any data that could be potentially linked to a person or household.
Channels. The different methods and means an SDR can use to communicate with leads and prospects, such as email, calls, social media, etc.
CLTV - Customer Lifetime Value. The predicted total revenue that a customer will bring in over the period they remain a customer. For a business to be successful, this should be higher than the customer acquisition cost (CAC).
Cold Calling. A phone call made to a prospect without any previous engagement or relationship.
Cold Emailing. An email sent to a prospect without any previous engagement or relationship.
Commission. A payment structure based on results, such as the number of SQLs generated. This is usually in addition to an SDR’s base salary.
Community (Sales Development). In-person and online groups of like-minded people solving specific problems related to Sales Development.
Conversion. When a prospect takes a desired action, such as responding to an email or agreeing to a meeting. Ultimately, companies will be looking to convert as many prospects into customers as possible.
CRM - Customer Relationship Management. The management of prospect and customer data, including contact information and interactions, usually handled by purpose-built software. SDRs will generally use a CRM to track their outreach and prospect relationships.
C-Suite. The top-level executives in a business, such as the Chief Executive Officer (CEO), Chief Financial Officer (CFO), and so on. For high-value sales in the B2B environment, a member of the C-Suite may be the decision-maker or otherwise involved in the sales process.
CTA - Call to Action. A sentence requesting the prospect to take a specific action, such as replying to an email, downloading a brochure, or booking a call.
Customer Success. A team focused on ensuring the success of existing customers. After the AE closes the deal, the Customer Success team will typically step in to onboard the customer with the aim of increasing customer satisfaction and reducing churn.
Demand Generation. A marketing strategy used to promote awareness of a business and its product/service.
Demographics. The characteristics of a group, typically based on physical data (such as age, nationality, and sex) and socio-economic information (such as income level, employment, and education level).
Dialer. A piece of software that automates dialing phone numbers.
Direct Mail. The use of physical mail as a sales channel.
Email Service Provider. Software used to send, automate, and manage email campaigns.
Engagement. Interactions carried out by the prospect with the SDR, measured in terms of action and time (e.g. items downloaded, emails replied to, time spent viewing a presentation).
Enrichment. Expanding on and improving the quality of existing data. For example, an SDR may use contact enrichment to improve the quality of their contact information, uncovering extra details they can use in their outreach.
Gatekeeper. Something (usually a person) who controls access to a person. In Sales Development, this may be a secretary or assistant who answers the phone on behalf of a decision-maker you’re trying to reach.
GDPR. The European regulations governing the processing and protection of personal data. For SDRs, this will affect how you gather contact details and how you handle prospect information.
IICP - Ideal Customer Profile. A description of the company that is the best fit for your product/service, including details such as their industry, their size, their turnover, and so on. Different from a Buyer Persona, which focuses on the individual buyer.
Inbound. Prospects that approach your company and express an interest in your product/services, usually as a result of marketing activities.
Inside Sales. Sales activities that are carried out from ‘inside’ the office, such as emails and phone calls, rather than face-to-face interactions.
KPI - Key Performance Indicator. The metrics and results used to measure performance and success. For an SDR, a typical KPI might be the number of meetings booked.
LDR - Lead Development Representative. An alternative title for a Sales Development Representative (SDR). Usually assigned to following up on inbound leads.
Lead. A person or business that has the potential to become a customer and has exhibited some form of interest, such as by downloading a whitepaper or requesting additional information.
Lead Generation. Activities carried out by sales/marketing intending to create interest in a product/service and attract leads.
Lead Qualification. Determining if a lead is likely to become a customer, typically based on how they compare to the company’s ICP.
Lead Scoring. A method of ranking leads, based on agreed criteria, to determine which leads are most likely to become customers. It can then be used to establish priorities for outreach.
LVR - Lead Velocity Rate. The rate of change of qualified leads, measured monthly.
MMargin. The financial amount gained from a product or service after factoring out selling expenses.
Metrics. The quantifiable results of activities, generally used to determine performance, identify areas for improvement, and predict future results. For example, email outreach metrics would include deliverability, open rate, click-through rate, and reply rate.
MQL - Marketing Qualified Leads. A lead that has demonstrated interest in your product/service, based on their engagement with marketing. An SDR may be handed MQLs for further qualification.
MRR - Monthly Recurring Revenue. The amount of revenue a SaaS or other subscription-based business receives each month, excluding any one-off charges. For customers on an annual payment plan, the annual payment will be represented by monthly payments throughout the year.
OKR - Objectives and Key Results. A goal-setting framework businesses use to measure progress by tying objectives to measurable results.
Optimization. Improving a process or action so that it’s generating the best results. For example, an SDR may modify their call script with the aim of getting more meeting requests.
Outbound. Where an SDR reaches out to potential customers who haven’t already displayed any interest in the business’s product/service.
Outside Sales. Sales activities carried out ‘outside’ the office, interacting with potential customers face-to-face rather than by email or phone.
Personalization. Tailoring messaging or service so that it is specific to the individual, such as by using their name or addressing their unique challenges.
Pipeline. In sales, a pipeline is used to visualize and track prospects as they move through the different stages of the sales process. It can also be used to describe the number of prospects (or their monetary value) who are currently going through the sales process.
Prospect. A potential customer who has been qualified and is now in the sales process.
Prospecting. Reaching out to potential customers and engaging with them, with the objective of creating a sales opportunity.
Quota. A sales target given to teams or individuals. Performance against quota is often used to evaluate success and determine any bonus/commission.
ROI - Return on Investment. A metric used to determine the profitability of an investment, whether that’s time or money. ROI is calculated by deducting the cost of the investment from the gain of the investment, then dividing by the cost of the investment. For example, the ROI of your new CRM might be [$500 (value of time saved) - $100 (cost of software)] divided by [$100 (cost of software)] = 4, a 400% ROI.
Sales Development. The dedicated practice of creating sales pipeline for your company through proactive outreach to prospective customers and following up on inbound leads created by your marketing efforts. Sales Development focuses on the early stages of the sales process, from researching potential prospects to contacting leads and ultimately generating sales-qualified leads (SQLs).
Sales Development Manager. A sales manager who oversees the Sales Development function in an organization, usually responsible for building and training the Sales Development team.
Sales Funnel. A visualization used to track prospects as they move through the sales process, showing how many convert and identifying the drop-off rate at each stage.
Sales Triggers. Any activity or change of circumstances that create a sales opportunity, such as a new investment, change of management, change of location, and so on. By looking out for sales triggers, SDRs can reach out at the right time and personalize their messaging, increasing the chance of a positive response.
Scraping. Extracting or ‘harvesting’ large amounts of data from websites, such as pulling lead contact information from social media sites.
SDR - Sales Development Representative. Salespeople who are responsible for carrying out Sales Development, usually sat between marketing and sales. Their job is to carry out early-stage sales tasks, with the objective of maintaining a full pipeline of qualified leads for the sales team. Once a lead has been qualified, they’ll be passed onto an Account Executive.
Segmentation. Breaking down a large market into separate groups that share specific criteria (industry, budget, role, etc.). Proper segmentation allows SDRs to personalize their outreach to each group more effectively.
Social Selling. The use of social media as a sales channel. SDRs may use social networks to create valuable content, connect with prospects, and develop stronger business relationships.
SQL - Sales Qualified Lead. A lead that meets the agreed criteria that demonstrate they’re more likely to become a customer. Once the SDR qualifies a lead, they’ll be passed onto an Account Executives to nurture and close the sale.
Templates. A file or document with the standard information already in place that can then be easily customized. SDRs can use templates with proven frameworks for their email outreach and cold calling scripts to speed up the process and improve results.
Touchpoints. Points of contact/interaction in the sales process, taking place between a salesperson and a lead. For example, an SDR may use a cadence with ten touchpoints, starting with a cold call, then sending an email, and so on.
USP - Unique Selling Point. A statement conveying the unique features that differentiate a company and/or its product from the competition.
Value Proposition. A statement conveying the results and benefits customers can enjoy as a result of purchasing from a company.
Warm Outreach. Reaching out to a lead, such as by phone or email, when they’re already familiar with the company and there is some level of existing relationship.
Hopefully, this glossary has given you greater clarity on the many terms used in the Sales Development world and answered any questions you might have had. If there are any other terms you’ve come across that you’d like explained, reach out and let us know; we’ll be happy to add them to the list.
If you’re looking for ways to set up a Sales Development program or improve your existing process, contact us at Tenbound today for a no-obligation exploratory call.
Overview of what we’re seeing in the Sales Dev world today, how you can play them, and the questions they spark.
Managing Virtual SDR Teams
The traditional, office-based SDR model has been on the way out for years, as remote work tools and bandwidth allowed SDRs to work from anywhere. Growing bandwidth and tools like Slack, Zoom, and various Sales Enablement Platforms have made it possible. We’ve all seen the estimates that the coronavirus accelerated the conversion to remote by 5+ years. Sales Development Leaders are now dealing with an entirely new way of running their SDR teams as the remote era has begun. New challenges have been created by the trend; how do you onboard, train and motivate a group of (usually) early career professionals to do a job that is considered the hardest on the go-to-market team? What tools are best for managing the remote SDR team? Should goal metrics change to account for the new reality? We covered some of these questions in this conversation from the recent Virtual Sales Development Conference.
Outsourced SDR Companies
As Sales pipelines are being eviscerated by lower demand and mass SDR layoffs, there’s also been a lack of backfill. Many companies are turning to outside SDR Outsourcing firms to help them with list building, appointment setting and pipeline generation, at least until SDR headcount is reallocated. As witnessed on the Tenbound Market Map, the number of Outsourced SDR companies has exploded in the past few years, and the demand for Outsourced SDR companies is seemingly endless. Many companies have stepped into this demand, with varying degrees of success. It’s a very opaque market. Selecting the right company to support you remains a huge challenge for Sales Development leaders. Tenbound recently released a survey report on the top companies in this area to help the selection process and visualized the decision making process with a new Framework (coming soon).
Mass SDR Layoffs
As spring 2020 brought the true reality of the coronavirus, many Sales Development teams were either downsized, redeployed or completely eliminated. Suddenly thousands of SDRs were unemployed, and while companies still need pipeline more than ever, now, no one is there to do the prospecting. The upside is there a huge amount of top talent out in in the marketplace right now; it’s a buyers market. In some companies, SDRs may never come back, as companies focus more on their installed base, evolve to a more Product-led model, go fully outsourced or go automated. In some scenarios, Account Executives will be expected to do all their own prospecting. What does the future hold for Sales Development post-pandemic? Is it still a viable model in this new financial reality?
Personalization at Scale
The challenge for Sales Development Leaders remains; how do you research and cull out key points in order to make an impact with prospects, yet at the same time not have your team spend the whole day researching? How do you not get stuck in analysis paralysis? New tools let you 10x your daily workflow and will continue to accelerate this process. McKinsey & Company has called personalization at scale the Holy Grail of marketing, noting that “done right, personalization enhances customers' lives and increases engagement and loyalty by delivering messages that are tuned to and even anticipate what customers really want.” Most Sales Development leaders have landed on a 20% customized approach, with a general message and CTA following, with a set research time allocated to SDRs, ie the “3x3” gather 3 facts in 3 minutes, build in to your messaging, and move on.
Sales Dev Leaders Gain A Seat at the Table
A new generation of Sales Development Leaders is stepping up to lead large and distributed teams, gaining more respect and authority and seat at the Executive Table. A cadre of VP of Sales Development is starting to be noticed at fast moving companies, and are leading big teams. These leaders are strategic, and driving alignment across Marketing, SDR, Sales and beyond. Who knows what the future holds. Where does a VP of Sales Development go later in their career; Marketing? Sales? Our prediction next stop: The Chief Revenue Officer.
With thousands of college students graduating each year with dubious degrees, few marketable skills and a massive debt load, many see Sales as a great entry point to break into the tech industry. With the crashed economy and pandemic, millions of people are also out of work. Mid-career professionals, Vets, ex-Field Sales Pros are now moving toward Inside Sales. The difficulty is that if they just apply for a SDR job without any experience, it can be really tough to get your foot in the door. Enter the SDR Bootcamp. These are springing up all over in different forms, but the value prop is similar; take a recruit, give them Sales training, give them tech training, and find them a job at a tech company that needs vetted professionals. Some manage the recruiting and training process, and offer ready-made SDRs on demand. Others actually do SDR work for you, producing meetings, and then directly place SDRs on your team.
Every day you scroll Linkedin, there’s a new Sales Community springing up. They are talking off even more as we all hunker down inside during coronavirus. People really need community support right now, and they need friends (digitally and maybe sometime, IRL) to help them with questions, make connections, and expand their networks. Now instead of having to leave your house and go to Meet-up, you can do it all online without leaving your room. Companies also need to build communities to ensure they have an audience and can control their message through the customer lifecycle. Salesforce.com did this brilliantly with Trailhead. Most communities are free to join, and have varying value, and some are paid and very exclusive. No consultants, founders or other riff-raff. :)
Similarly to Communities, not a day goes by without another SDR Guru/ Coach springing up and making a big splash on LinkedIn. Social media has allowed someone to leverage their following, start a community and even set up a Patroon group to fund their activities. Could be great work if you can get it. If you’re looking at these as way to help your career or team, ask for the same due diligence that you would if you are buying a software product; provable case studies, real differentiation and realistic outcomes.
Alignment: Marketing + SDR + Sales and The Rise of RevOps.
One of the most exciting developments happening now in the Sales Development world how it's tackling the challenge of Revenue Alignment. How can Sales Development leaders rise above the noise to drive real alignment within their organizations, and to produce better results from Marketing to Revenue? To lead this charge, Sales Development leaders’ tool kits now must include knowledge of Marketing, Sales Development, Sales, Revenue Operations and the political savvy to lead this charge. We see this developing into the true role of a CRO, one who is in charge of the entire process, driving consistent process improvements and interfacing directly with the CEO. This is an amazing opportunity for up-and-coming Sales Development leaders to lead the charge around alignment, and potentially grow their careers to new levels of success.
Data is the lifeblood of Sales Development, and having clean data is table stakes for high performance Sales Development teams. While many teams have purchased high-investment solutions for data cleanliness, the problem many teams are tackling is trying to prioritize the data and set it up for their SDR teams. How do you sort Accounts, People and keep the lists prioritized over the long term? Who should be in charge of the process? What are the factors you need to consider when prioritizing your data? While vendors have come and go attempting to solve this issue, it remains a challenge to solve. RevOps has stepped up to tackle this.
What other trends have you seen?
What did we miss?
Leave a comment!
In the beginning, there was sales. For a long time, it was as simple as that.
Salespeople would work their Rolodex and run the full sales process with just one goal: ABC, Always Be Closing.
However, the idea that one role can address all the complexities of modern sales has changed. Over recent years, the Sales Development role has exploded in popularity, spreading from Silicon Valley companies to sales organizations of all types and sizes.
With the advent of Software as a Service, the importance of dividing the sales team into three parts—Sales Development, Account Executives and Customer Success—gained viability.
Sales Development finds new leads and follows-up on inbounds, Account Executives close deals, and Customer Success ensures the customers never cancel their subscription.
The success of companies such as Salesforce.com and myriad of others has proven out the Sales Development model.
Quite simply, Sales Development is the dedicated practice of creating sales pipeline for your company through proactive outreach to prospective customers and of following up on inbound leads created by your marketing efforts. Instead of a single sales rep handling everything, it divides the job into specialities.
While that may seem simple, we're still seeing confusion in the Sales Development industry, with a lack of clarity on what’s actually involved and lack of expertise on how to implement it effectively.
In this post, we'll cover everything you need to know about Sales Development, from what it is to how you can build it successfully into your organization.
What is Sales Development?
Benefits of a Sales Development program
Implementing Sales Development in your organization
Top Sales Development skills
The SDR process
Building a Sales Development tech stack
Sales Development training and tactics
Monitoring the right metrics
What is Sales Development?Sales Development covers the early stages of the sale. From researching potential prospects to carrying out the initial lead and ultimately generating sales-qualified leads (SQLs).
In Sales Development, the people responsible for carrying out this work are Sales Development Representatives (SDRs). In many sales organizations, they sit between marketing and sales, in some cases reporting to Sales, in some cases Marketing.
Their job is to carry out those early-stage sales tasks, with responsibility for prospecting and qualifying. In a nutshell, their job is to maintain a full pipeline of qualified leads for the sales team.
Depending on their exact role, they’ll either take inbound marketing-qualified leads (MQLs) from Marketing (for example, those who’ve engaged with content), or they’ll go looking for leads themselves.
In either case, they’ll reach out to those leads with the objective of qualifying the lead ready for the sales team. This might involve a variety of channels, tools, and strategies. While the traditional idea is of a rep working the phones, today they are as likely to be sending emails, recording videos, or sending connection requests on LinkedIn.
Is the lead a good fit? Are they interested? The SDR will follow up with the lead, usually with the objective of priming them and booking a meeting. At this point, they’ll then hand them over to an Account Executive (AE) as a qualified lead.
To be clear, SDRs carry out a very different function to AEs. AEs will usually be involved in the tail-end of the sales process, getting the SQL across the finish line and signing the contract. The SDR sets up the deal, the AE closes it.
SDRs are also different from Business Development Reps (BDRs), although some companies use the term interchangeably.
BDRs usually have the objective of identifying new markets and making connections with businesses in that market. The SDR job is more focused on finding and qualifying inbound leads.
Of note: “Sales Development” in this context is sometimes called “Business Development”, which is confusing because Business Development is also the specialty of forging strategic partnerships with complementary companies for integration and cross-selling purposes, something totally different than Sales Development. For this article I'm talking about Sales Development, as defined above. Sales Development Reps (SDRs) are alternatively called Business Development Reps, Lead Development Reps, Account Development Reps, Revenue Development Reps, or a plethora of other creative terms.
Benefits of a Sales Development programDon’t all these different terms and roles just confuse matters? Why do we need all these different job functions?
For a start, connecting with prospects requires time and resources. Having a team of SDRs allows your sales team to keep a tight focus on specific objectives. This focus means they can use different playbooks and receive training that’s specifically tailored to their tasks.
In their State of Sales report, Pipedrive found that only 62% of salespeople spend most of their time actually selling. By having SDRs who stick to prospecting and qualifying, sales reps can spend more of their time getting leads signed up and closing deals. As an entry-level position, a dedicated Sales Development team means you’re not paying your top closers top dollar for the job, saving you time and money.
SDRs also have the opportunity to contribute to strong prospect relationships. As the first point of contact that a prospect has with your company, they can make a good first impression on your prospects, for example by quickly responding to any inbound interest.
With their clear objective, SDRs have the freedom to experiment and expand how they achieve that goal. They can try different channels and approaches, from the traditional calls and emails to newer avenues, such as video messages, on-site chat, and SMS. In turn, leadership can work on standardized processes, creating playbooks of best practices for the role.
Importantly, today’s SDRs are often tomorrow's sales managers, AEs, and Customer Success leaders. The role is used by many companies to identify and develop sales talent that they can use throughout their organization in key roles.
Implementing Sales Development in your organizationSales Development is powerful, but it isn’t a magic bullet. You can’t just hire a few SDRs and expect to get amazing results. It needs to be set up correctly to be beneficial.
One of the first steps is to determine what kind of Sales Development program you need. For example, who is the ideal customer for your product? Will SDRs have to deal with the C-suite at enterprise companies, with multiple decision-makers needed to approve the budget? Will they be relying exclusively on MQLs, or will you need SDRs to go out looking for leads?
With a better idea of your requirements, you can start hiring. It’s a good idea to start by employing a sales manager with Sales Development experience to build and lead the team. The right leader will know what to look for in new hires, and how to train them to get the best results.
Alternatively, you may decide to outsource the Sales Development process entirely. With the right leadership in place, you’re ready to start recruiting the talent.
Top Sales Development skillsWhile everyone would like to bring on experienced SDRs, the reality is that anyone with several years of experience as an SDR has most likely moved on to a more senior position. Instead, it’s likely you’ll have to create a program that identifies the key skills, then nurtures that talent with additional training. Skills to look out for include:
Communication. Whether it’s sending a video message or jumping on a phone call, SDRs spend a large amount of time talking with prospects. On the one hand, that means being able to clearly and confidently get their message across while overcoming objections. However, it’s even more important that they’re able to listen. Paying attention to what the prospect does (and doesn’t) say is key to identifying their most pressing concerns and determining whether or not your product/service is a good fit.
Detail orientated. SDRs need to pay attention to the details, whether that’s product knowledge or prospect information. This enables them to confidently explain how your product/service can specifically help a prospect, rather than offering vague features and benefits. This also comes in handy when updating the CRM, ensuring all relevant parties have access to all the necessary information.
Discipline. If an SDR lacks self-discipline and motivation to carry on making calls and emails, they won’t succeed. To get the best results, an SDR needs to be capable of using their time wisely and getting on with the job, even when their manager isn’t looking over their shoulder. Being an SDR isn’t an easy job, and it takes persistence to keep on going despite hearing ‘no’ more times than you thought possible.
Solution-focused. The best SDRs are always looking for solutions, both for their prospects and themselves. For example, being able to quickly assess a prospect’s situation and provide genuinely helpful advice increases trust and perceived value, demonstrating that the SDR has their best interests in mind. At the same time, your SDR needs to be creative and resourceful when overcoming unexpected objections. While your SDRs should have a playbook to use, they should also be resourceful enough to think on their feet and find new solutions.
The SDR processOnce you have your SDR team in place with the right skills, what do they need to do? The process typically looks something like this:
1) Confirm your ideal customer profiles and buyer personas
If you’ve been following along, you should have already given serious consideration to your ideal customers when you were planning out your Sales Development strategy. Now you need to make sure you know every last detail. For your SDRs to do their job, they’ll need to know exactly who they’re looking for, and how your product/service helps them. For effective targeting and outreach, your SDRs need to know everything from job title to company size, from pain points to product fit.
2) Align sales and marketing
It sounds simple. Just four little words. But aligning marketing and sales can be an overwhelming challenge. When it’s working well, Sales Development can help. However, it’s important that both departments are on the same page, which starts with agreeing on what exactly an MQL and SQL look like. That way, SDRs will be approaching the right prospects, and passing on the right leads to the sales team.
3) Establish clear roles and processes
As with any job, the SDR needs to know exactly what’s expected of them. Many companies find it handy to separate the inbound and outbound functions, as they require different skills and approaches. In either case, having a documented and repeatable step-by-step process, with guidance on how to find and engage with the right prospects, makes it much more likely that your SDRs will succeed. Think about the whole process, from start to finish, covering how your SDRs should find prospects, what channels they should use, how they should follow up, and so on.
4) Hand over qualified leads to the AEs
The SDR’s last step is to hand over SQLs to the AEs. Along with a full understanding of what makes a SQL (see step two), you’ll need to make sure the handover is as seamless as possible for the lead. Again, have a documented process that covers the process to prevent leads falling out of the funnel. This is one of the reasons a CRM is so useful, as it helps all relevant parties keep track of leads and their details.
Building a Sales Development tech stackIn this modern age of sales, you can’t just hand an SDR a phone and a copy of the Yellow Pages and expect good results. Rather, you need to equip them with the specific tools necessary to do their job to the best of their ability.
Advances in AI and technology means that a large number of mundane and repetitive tasks can now be automated. The right software will save significant time and allow your reps to focus on high touch activities that provide more value to the prospect. While there are many different types of tools you can use, the most important categories are:
Customer Relationship Manager (CRM) software. SDRs spend a large amount of time in the company's CRM, managing leads, and making sure prospect information is up to date, accurately reflecting where they are in the buyer journey. Popular examples include:
Data sources. Whether it’s learning more about MQLs or identifying new prospects, SDRs need a reliable and comprehensive source of information to do their job. Rather than having to waste time trying to search for businesses on Google, the best data tools bring all the information together so that it’s easy to filter the results and find everything you need to know about your next prospect. Popular examples include:
Outreach tools. If your SDR is sending out emails from their inbox or manually dialing each prospect, it’s time to upgrade. As well as allowing you to dramatically scale up your outreach, using dedicated software enables you to see how you’re performing, from tracking email opens to analyzing phone calls to identify best practices. Popular examples include:
Sales Development training and tacticsEven with the right skills and tools, your SDRs need more direction than just being told to get on with it. They need the right training to build up those skills, with instruction in the best practices so they can be confident from the very first call.
Scripts. Your SDRs should never pick up the phone or start writing an email without knowing what they’re going to say. While over-reliance on templates can lead to awkward conversations, they’re still a good place for your SDRs to start from. Rather than facing the horror that is a blank page, you should provide them with scripts and templates that cover the essential points, from key questions to how to ask for the appointment.
Then, encourage them to personalize the outreach, both to prospect but also to their own individual style. Don’t have any scripts or templates? Start by breaking down the high-performing messages you’re already using.
Role play. No matter how well trained an SDR is, the first time they make a call is likely to be a stressful experience. Help them overcome their fears and get used to the idea of talking on the phone by role playing. Mock calls give them a chance to work through any anxiety and help you spot potential problems in their delivery before they ever talk with a customer. Run them through the most common objections, then throw the odd unexpected question in. By gaining confidence with mock calls, they’ll be more comfortable when they move on to the real thing.
Playbook. Once you have enough information gathered and have mapped your SDR process, pull the information into a Sales Development Playbook. The playbook can be a digital document put into Google Docs, use a specific software program, or even a paper-based binder. The important thing is to get everything together into one document so you can have a first version to start improving it.
If you’re struggling to find time to build a Playbook or regularly carry out training for your SDRs, you might find it’s worth outsourcing this to a reputable sales coach.
Monitoring the right metricsTo find out if the SDRs you hire are doing a good job or not, you need to establish what metrics you’ll be using to measure performance. Specifically, you need to measure their activity and their results.
Activities refer to how your SDRs are spending their time. For example, how many calls are they making each day? How much time are they spending on those calls? How many emails are they sending?
Results. SDR success is normally based on the number of meetings they’re able to book. It’s their main objective, so it makes sense to use this as a KPI rather than holding them a quota of closed sales.
However, there are other metrics you should consider. For example, look at the metrics relating to their outreach. What’s the positive response rate? How many calls does it take on average for the SDR to book one meeting? How much pipeline are they generating compared to other SDRs? How are they converting?
You should also look at the quality of the leads they’re generating, using metrics such as average deal size. While an SDR isn’t responsible for closed sales, it’s useful to track how many SQLs go on to become paying customers. If it’s too high, it’s likely that the SDR is reaching out to prospects that aren’t a good fit.
ConclusionAs Sales Development has grown in popularity, it’s become an essential part of the modern sales organization. However, to get the full benefits, it has to be properly implemented. With the right underlying processes in place, by hiring the right team with the necessary skills, and by providing them with the right tools and training, you can enjoy more appointments, more pipeline, and more sales.
If you’re looking for ways to set up a Sales Development program or improve your existing process, contact us at Tenbound today for a no-obligation exploratory call.
You don’t need me to tell you that, over the last few months the whole world has gone a little crazy. Thanks to Covid-19, everything’s changed, and that includes Sales Development.
But while everyone is trying to adapt, what has been the actual impact? How has Sales Development changed over the last three months? What can we expect in the near future?
We teamed up with RevOps Squared to research how the pandemic has impacted Sales Development teams. Here’s what we found out.
Concerns over Sales Development layoffsWith record unemployment figures, it shouldn’t be surprising that layoffs were one of the biggest concerns. At the time of the research, over 20% of companies surveyed had already let SDRs go. Additionally, over 60% were still concerned about layoffs in the near future. Interestingly, respondents from larger companies were the most likely to be concerned about their future.
These results remind us that we’re still in the early stages when it comes to the economic effects of this pandemic. Even as lockdown restrictions are lifted, we’re going to see more layoffs over the next three to six months, especially any SDRs who are struggling or on a performance plan.
With the pressure that comes from these concerns, it’s clear that companies need to ensure they’re consistently communicating with their SDR teams to alleviate concerns as much as possible.
Companies also need to think about how they are planning to fill the pipeline not created by the SDRs they laid off. Where is that pipeline going to come from? What resources, such as outsourced SDR companies, are available and ready to help?
Levels of Sales Development activityA large number of SDRs have reduced their activity as a result of the pandemic. 36.5% have reduced their number of daily dials, 30.8% have reduced their number of daily emails, and 39.5% have reduced their number of Cadences.
This is largely down to a desire to be respectful. People are still trying to process what’s happening and, as a result, some SDRs have slowed down. However, considering the concern over potential layoffs (see above), it’s essential that SDRs fulfill their role. Executives are now tying activity back to revenue, so smart SDRs are actually increasing their activity. Logically, if there are less opportunities being developed, and the pipeline is reduced, we need to be talking to more people than a few months ago.
If that seems difficult, it’s time to take another look at your messaging. 75% of SDRs are using new/different messaging. Overnight, your prospect’s pain points have changed, but they still have pain points. They still have problems to solve. They still need your help. Of course, you need to be respectful, but that means adjusting—not reducing—your message.
Lack of dedicated inbound teamsDespite the differences between inbound and outbound, both in terms of activity and mental attitude, only 32% of companies had a dedicated inbound SDR team.
Smaller companies just starting out often have a hybrid SDR program to start with, handling both inbound qualification and outbound sales. Traditionally though, those roles are split into separate job functions as soon as possible. However, our results showed no correlation between company size and whether they had a dedicated inbound SDR team.
This really really poses more of a question; if there is no dedicated inbound team, and AE’s are notorious for not following up on all their leads, who is actually following up?
Management of inbound leadsOn a related note, 27% of companies have changed how they handle inbound leads. In most of those cases, that’s involved rerouting inbound leads from SDRs to AEs. With a lower number of leads coming inbound due to the crisis, and layoffs on the SDR team, we see this continuing.
This is understandable, as companies try to reduce any perceived friction and unnecessary steps in the process. However, handing leads directly to AEs means they’re handling more unqualified leads. There is also the risk of leads “falling through the cracks” in this case, ie being send directly to AE’s who get overwhelmed and don’t perform the proper amount of follow up.
SDRs serve an important function, tracking down all the inbound leads worth qualifying and making sure they have enough touches. Cutting out that process is a false economy, and results in more leads not being contacted. Companies need to carefully consider the buyer journey and then ensure that their lead qualification and nurturing process matches up.
ConclusionThe whole economy has taken a hit, and it’ll be many months before we understand the full effect of the pandemic. However, all is not lost. By going back to basics and making an effort to understand prospects, their industry, their personas, and their pain points, SDRs can still be effective.
Finally, self-care is critical. We’re all working from home now, and it’s easy to neglect exercise, sleep, diet, and so on. By taking care of the fundamentals, both in sales and in your personal life, you can come out on the other side of this stronger than ever.
For the full research report, complete with insights and recommendations, download your copy today.
Whether they’re looking to supplement their internal teams or build pipeline, many executives are considering outsourcing their Sales Development team. There’s a tremendous amount of demand, and the industry is growing exponentially (something we’ve seen with the latest update of our Market Map).
However, outsourcing comes with challenges. Anybody with an internet connection and a telephone can set themselves up as a sales prospecting organization, but that doesn't guarantee success. In our recent study, we found that only 32% of respondents would outsource to the same firm again.
How can you choose the right SDR outsourcing company? How can you get the best results? Here are the top factors that you need to consider.
The locationWhere is the company based? Offshore companies are cheaper (typically half the price), but local providers are generally better suited for outreach to enterprise-level businesses where a high level of English is required.
For example, if you need personalized emails and calls made to prospects in the US for a high-ticket product/service, then outsourcing to an offshore company could backfire. Trying to ‘save money’ by going for a cheaper option is a false economy if they’re not suitable for your target market. On the other hand, if you have a low-ticket offer and you’re looking to increase your outreach, then offshore will likely be sufficient for your needs.
The peopleIt's common to view an outsourced service like a machine, producing leads on demand. However, that machine is made up of people, people who’ll be directly contacting leads on your behalf.
When assessing a company, find out how their SDRs are recruited. Will you be able to communicate with and assess them directly? Will you be able to listen to recordings of their calls to hear how they interact with your prospects? The difference between an SDR who’s just dialing it in and one that’s highly motivated will have a huge impact on your results.
CooperationOutsourcing your SDR team isn’t a case of set it and forget it. You can’t just hand the company a list and a few scripts and then walk away. You need a strong relationship, where they have a seat at the table.
This is essential if you run into problems. They should feel that they can come to you, explain the problem, and come up with suggestions to move forward. If they don’t come forward, they’re either acting as a commodity, or you’re treating them like one. By treating them like the extension of your company that they are and giving them input, you can work together for better results.
A standardized approachThere are three variables you have to manage when prospecting: The marketplace, the message, and the messenger. When you're considering an outsourced SDR function, you have to choose a company that can help control those variables.
The marketplace, or who you’re reaching out to, is straightforward. So, if the company you choose has a standardized process, with control of the messenger, the only variable you need to solve for is the message. This means you can easily troubleshoot any problems that come up and pinpoint the issues, allowing you to focus exclusively on optimizing the message.
Agreed KPIs Traditionally, SDR performance is measured on how many meetings are booked. However, not all appointments are created equal. If your outsourced company is using hard-sell techniques on poor-fit prospects, you might get plenty of meetings… they just end up going nowhere. To encourage a more meaningful approach, you might also monitor their meeting-to-opportunity acceptance rate as well as the meeting attendance rate.
It’s unlikely you’ll be offered any kind of guarantee (if you are, that’s a red flag). However, a good outsourcing company will work with you to agree on what is a reasonable result against your KPIs, then work hard to make it happen.
Information sharingEnsure your outsourced firm doesn’t operate in a black box. You want to understand the processes and messaging they are using, and if successful, be able to use those with your own in-house SDR team. You’ll want to develop or validate your SDR playbook with information gleaned from the outsourced team.
ConclusionSuccessfully outsourcing your SDR program is a challenge. However, by considering their location and their culture (and how those fit in with your ICP), then making sure you’re both working together and agree on how to measure performance, you can give yourself the best chance of success and take advantage of the many benefits of an outsourced SDR team.
If you’re looking to successfully outsource your Sales Development program, then Tenbound can help you implement the best strategy for your business. Contact us today for a no-obligation exploratory call.
How many ingenuine, out-of-touch sales messages do you receive on social every week?
Here are direct quotes from just a few of the many in my LinkedIn inbox:
❌ “I definitely think our business could benefit from each other and I'd love to have a chat”
❌ “In case you’re aspiring to take the next step up in your career, so I wanted to send you something that can be a big help”
❌ “Thanks for connecting & your interest in our event” (Wasn’t interest, just connected)
❌ “I would love to hear more about your biz dev, do you do outreach to companies?”
❌ “There might be some opportunities for us to work together. We are an excellent solution for…”
Despite recent clapback from the community against these selfish, unsolicited pitches on social, it’s unfortunately still a very prevalent approach in the B2B world.
Because social is a different context from direct selling with cold calls or emails. Yet many sellers don’t recognize the difference.
Many personal and professional benefits exist for social users, but it takes the right best practices to create positive experiences for those in the community.
To use social networks correctly, SDRs need to understand how to navigate information, relationships, content, and conversations within this unique digital environment.
Here’s a breakdown of the 4 key elements behind using social as a sales professional.
At the core, social is a digital highway of information exchange. LinkedIn profiles, company pages, posts & activities, targeted groups, and more.
Every time a qualified account or prospect interacts on social, they provide invaluable insights on their priorities, personality, goals, interests, and challenges.
An SDR has to balance their level of personalization & preparation for conversations with the amount of time it takes to research that information.
With social, reps can get real-time intelligence on key stakeholders while gaining access to a reservoir of contextual data like previous experience, connections, and new team members.
Social networks like LinkedIn and Facebook are massive communities with an unending flow of content, so they have to manage how audiences grow & optimize how content is distributed.
A one-to-many environment is not the best place for direct sales outreach, but it’s an excellent stage to build personal brand and attract people that care about targeted topics.
In contrast to social selling, audience development is about finding your tribe, sharing value with the community, and building authority within your industry.
Rather than generating sales opportunities through high-volume, direct sales touches, social is about the long game: growing and building trust with a targeted community to improve performance on outbound-focused channels like phone, email, direct mail, etc.
Relationships are at the core of sales.
One great, authentic connection with someone in your professional network can generate future learning, referrals, testimonials, partnership collaborations, and even career opportunities.
However, your momentum with new relationships on social media can plummet if you’re sending automated, sales-focused messaging to everyone you find.
Not only does this messaging disrupt your ability to create one-on-one relationships, it can also degrade your reputation within the targeted communities you care about most.
Instead of a cold pitch message to everyone you come across, imagine the momentum you could create by building long-term relationships and creating positive experiences.
At the end of the day, social in the context of sales development is about influence.
SDRs can use market knowledge, audience, and relationships on social to influence the thoughts and decisions of qualified buyers, both inside or outside of their network.
The ability to influence on social is the difference between powerful thought leaders and the mass majority of B2B sellers that aren’t seeing success.
Are you staying up-to-date on topics & changes in your space?
Are you creating value for and connecting with the audience you want to grow?
Are you building memorable, lasting relationships with your network?
When the focus shifts away from “social selling” to social influence, you separate yourself from the overwhelming number of people that fill inboxes every day.
In the grand scheme of a sales development playbook, social is still a relatively new channel.
As more social users push back against direct sales on social, the mass, generic messaging approach will become less effective and more damaging to your future online reputation.
However, a growing number of sales leaders, managers, and reps are providing massive value to the community on social, creating opportunities for their business without the need to pitch.
With the right mindset behind how to leverage social networks within your sales development process, you can unlock new ways to connect with buyers and create opportunities.
In January and February most sales teams were going through SKO season, reviewing what went well in 2019 and planning for 2020. As with any year, the idea of getting ahead of pipeline is top of mind, trying to win more deals early in the year to crush their numbers and hit accelerators as they cruise into Q4. And the role of creating pipeline falls heavily on the shoulders of Sales Development Teams. No pressure!
Then March came around and the world changed. Businesses closed, everyone began to work from home, budgets went dry, and a new reality set in.
But guess what, many businesses, while adjusting forecasts for the year and quarter, still have to create pipeline to hit any adjusted goal. And guess what, that responsibility still falls squarely on the shoulders of Sales Development Teams. No pressure! Except now you’ve got double the pressure as you adapt to new realities: Buyers are distracted by things at home, and those valuable office direct dials are worthless.
The Main Driver of Pipeline Generation is still the SDR
The person who is dialing, emailing, direct mailing, and text messaging.
The SDR is responsible for 3 pipeline-centric goals:
As we know, cold call dialing is the preferred method to reach these goals in the best of times. In current times, what's the truth.
At Chorus, we have been tracking cold call data through the Covid-19 Pandemic and it turns out, it’s still effective. With some changes. Here’s what we have learned from the data:
What does this mean, while people may be working from home, they are still picking up the phone when it rings. And without the normal social interaction, maybe people are more prone to answer a call just to have the distraction they are used to when they are in the office.
What Does a Great Cold Call Look (and Sound) Like?
The truths of objectively excellent cold calling are still a black box. There are mountains of bookmarked articles claiming silver-bullet best practices and tried-and-true techniques.
And yet, The Bridge Group found that one-third of all SDRs aren’t hitting quota industry-wide.
And that was before Covid struck! Now the old messaging has to go out the window, and you MUST develop new messaging that adds a level of true empathy. What wasn’t easy before, is much harder now.
So how are these SDRs being coached to make their cold calls work? What do they say and do?
Conversation intelligence platforms like Chorus do offer benefits of recording and analysis to SDRs and full-cycle reps.
But can cold calls be assessed and coached in the same way as a sales meeting?
Let’s Think About the Differences Between a Cold Call and a Meeting
Data based on 5M+ sales calls from the State of Conversation Intelligence tells us that on a cold call pre-Covid:
You have to work faster to get your desired result.
SDRs and cold calling in general need to be assessed and coached on differently than sales meetings. Now more than ever.
In the past 2 months, this data has changed. As I said before, cold call volume is down over 25%. 100 dials is now 75 dials. Yes, connect rates aren’t off much, but with lost pipeline and revenue to make up for, that lost productivity will come back to bite companies later.
It’s time that the world of sales coaching and enablement rises to this challenge.
Say Hello to Chorus and Tenbound
We’re excited to announce a new partnership with Tenbound to help Sales Development leaders through all times.
While Chorus can enable enhanced visibility into the performance of your SDR teams, Tenbound can offer you the white-glove service you need to implement changes based on that performance.
How Can Tenbound do this?
With a focus on training your Sales Development teams, Tenbound aims to help cultivate the skills your teams need to optimize their performance.
Areas of focus where Chorus’ AI and Tenbound’s services can help you succeed:
1. Call Opening
2. Objection Handling
3. Value Propositions
4. Locking down Next Steps
With Chorus’ Cold Call Central and Tenbound's Strategic Support combined, SDR Teams are set up for success to crush their goals and drive more pipeline for their team
Most of us are aware that the buyer’s journey has changed dramatically in the last few years (and months given the global pandemic).
This is supported by a CEB (acquired by Gartner) report in 2016 that shared “buyers on average are 57% of the way through their buying journey before even reaching out to a vendor”.
Fast forward a few years since that report, the explosion of Inbound Marketing, and the development of buyer journey optimized content I would argue that it is probably closer to 90%.
That is, buyers have almost all the information they need to make an informed purchasing decision.
In 2007 Chet Homes shared the statistic that only 3% of any market is in the “buying mode” now. This means that 97% of prospects aren’t actively looking to purchase a product or service.
When you acknowledge the above statistics, it is easy to understand why the spray and pray method of prospecting doesn’t work anymore (not that I believe it ever did truly work for 99% of B2B sales teams).
If your prospecting efforts consist of sending templated messages to prospects who just match the “job title” of your past customers, it simply won’t cut it.
Just because someone matches your buyer persona doesn’t mean they are actually interested in buying what you have to offer.
You’ll be sending out hundreds of emails and generating only a handful of replies. And that isn’t fun for you or the prospect.
Prospecting is tough. It’s time-consuming, it takes tenacity to stick with it and the will power to continue prospecting each day.
But it doesn’t have to be so hard.
By taking a smarter approach to prospecting and focusing on triggers and highly personalized emails, you’ll be able to reduce the volume of emails you send, whilst increasing the number of conversations you have with engaged prospects.
This isn’t a silver bullet, but it is an efficient method for starting more conversions that begins before you even draft an email.
What is Trigger-Based Lead Sourcing
Lead sourcing (or list building) is the process of building a list of leads without previous marketing activities.
It includes finding the source of targeted leads and extracting them into a CRM system (or a spreadsheet). Usually, if the source is good enough, finding the names, phone numbers, and addresses of your leads shouldn’t be a problem.
Trigger-based lead souring takes this a step further by only sourcing prospects when an event or sales signal has occurred. It is at this moment you have an opportunity to start a conversation when there is a higher chance that the prospect is “in-market”
Examples of triggers range from obvious to not so obvious, these include:
Below are two of my favorite trigger-based lead sourcing playbooks and step by step instructions on how to perform them without the need of intent data or expensive software.
Remember, only 3% of leads are ready to buy now and it’s your job to nail the timing.
And this isn’t about building large static lists of prospects, it is about curating smaller, dynamic lists and refreshing them with new data on an ongoing basis.
Pro tip: LinkedIn remains the best database for finding the most up to date information on prospects’. If you combine these playbooks with LinkedIn, you will be able to identify a number of decision-makers who are ready to make a purchase or at least considering this option.
Playbook 1: The Social ExpansionThe Social Expansion playbook helps you send highly targeted and personalized messages based on your audience’s interactions.
This playbook helps you identify thought leaders or influencers among your target audience and build a list of those who have interacted with them through comments. When they engage with a post, they are actually giving you a signal that they may be interested in buying the product or service you offer.
From there, you can start a conversation on whatever platform you monitored, including LinkedIn, Quora, Slack, Facebook groups, and so on. Always keep in mind that there are a number of places where your prospects spend time online.
Here’s a step by step guide to the Social Expansion Playbook:
Take a screenshot of their activity on LinkedIn and include that in the email - this will take more time, but worth it if your LTV is higher.
Playbook 2: The In MarketWith the In Market Playbook, you can identify prospects who have expressed an interest in a competitor or non-competing, complementary solution. They will most likely be interested in your product as well.
When your prospects upvote a certain product, you can start the conversation about your own service or product that is relevant to their interests.
Here’s a step by step guide to the In Market Playbook:
Whilst you can automate these steps, I always recommend having a human check over the email addresses, formatting of the data, and any additional data points you intend on using in your outreach.
These are just two examples of using trigger-based events or signals to initiate your outbound sequences.
Use these as a foundation and build your own playbooks that work with your specific audience and your tone of voice.
The days of spray and pray are over, you know this and so do your prospects. Spend more time personalizing your emails and making them relevant to your prospect and you’ll be booking more meetings without burning through large volumes of leads from a list.
About Mark Colgan
Mark is the Chief Revenue Officer at TaskDrive. In his role, he leads the direction of a 100+ person, remote team by aligning Sales, Marketing, Customer Success, and Product – and he loves it.
His brain’s default mode is ‘Revenue Generation’ and his personal mantra is Give without expecting anything in return.
The Tenbound Virtual Sales Development Conference is the only full day live Virtual conference 100% dedicated and focused Sales Development!
Taking place on June 18th 2020 from 8:00am - 2:00pm PT, all sessions are led by the real Sales Development practitioners and the Tenbound team, who will share the most recent strategies, tactics and playbooks you use today to hit your Sales Development goals in this new reality.
This is a must attend virtual event.
All sessions are streamed live and will be recorded for registered attendees to watch after the event ends via tenbound.com.
This one day event is focused on the latest trends in Sales Development. Register now as session rooms are limited to the first 500 attendees who join the broadcast. If you are unable to join the session you will still be able to access the slide deck and session recording post-event.
The Tenbound Virtual Conference experience also includes amazing networking and learning opportunities. When you register you will be automatically added to the event community and able to connect 1:1 directly with other attendees, Tenbound Market Map tool providers and the Tenbound team!
What sales development leaders need to know about the connection between sleep and productivity and how to get more of both.
Even before the uncertainties of the COVID-19 pandemic, Americans were underslept. A large body of research shows we were quite unproductive as a result. During the current crisis, we face even more threats to both sleep and productivity: anxieties keep us up at night, while distractions working from home, burnout from a lack of boundaries between our professional and personal lives, and the cognitive overload of Zoom all curb our focus. Now, more than ever, it's imperative to understand the connection between sleep and productivity and invest in your team's rest.
The Science of Productivity
There's a deep body of research on the negative effects of sleep deprivation on mental processing. The prefrontal cortex area of the brain, which directs what psychologists call "executive functioning", has been found to be particularly impaired by a lack of sleep. Problem solving, reasoning, organizing, inhibition, planning, and executing plans - processes essential to performing our jobs - are all the domain of the prefrontal cortex. It is true basic motor and visual skills decline when people are sleep deprived, but they do so not nearly to the same extent as these higher-order mental skills.
And the more sleep deprived you are, the worse the consequences. This is the concept of Sleep Debt - how much sleep you miss, or owe your body, relative to your sleep need over the course of 14 plus days. The bigger the debt, the worse the impact on how you perform your job. Yet, when organizations think of ways to make their teams more productive, more regular sleep is rarely the answer.
How Your Team's Sleep Debt Impacts Its Productivity
The last 100 years of sleep science includes tens of thousands of studies on the direct impact of sleep debt on workplace performance, and the implications are becoming harder to ignore.
Deloitte, the multinational professional services network, has escalated sleep deprivation to a "business issue", supporting the scientific community's findings that "people’s ability to learn, concentrate, and retain information is greatly impacted by how well-rested they are.” This remains the case regardless of remote work practices or the status of the COVID-19 pandemic. Indeed, rigorous academic research shows that sleep debt affects productivity in profound ways:
● Increases in cognitive lapses that reduce alertness and attention: Researchers found a 400% increase in mental lapses following one night of missed sleep - and the same result for participants who slept for 4 hours over the course of six nights.
● Increases in response times and increased errors in tasks that require sustained attention, especially under time pressure and as task duration lengthens. Research has tied sleep deprivation to an 11% increase in response times - equivalent to the increase you would see from someone with a 0.8 BAC (the threshold at which you're deemed legally impaired).
● Difficulty learning new information and acquiring new skills, with a decreased likelihood to revise and adapt strategies in response to failures. Researchers have found one night of sufficient sleep improves motor learning task speed by 20% and accuracy by 39%.
● Degradation of working memory: When you sleep at night, cerebrospinal fluid and slow-wave activity both help flush toxic, memory-impairing proteins from the brain. Research has found a 40% reduction in the ability to form new human memories under conditions of sleep deprivation.
● Fewer insights: Sleep, by restructuring new memory representations, facilitates the synthesis of your day. Researchers found 2x as many subjects gained insights after 8 hours of sleep than after wakefulness.
● More sick days: Sleeping less than 7 hours a night has been found to make you 300% more likely to catch the common cold. Direct costs due to sickness absence could decrease by up to 28% if a workforce gets sufficient sleep.
Worse, sleep debt can have negative consequences for traits and habits that foster team collaboration and morale, including:
● Increased likelihood to use a negative tone of voice. Decreasing sleep debt by 8 hours reduces negative vocal emotions by up to 67%.
● Emotional irrationality: Sleep deprivation leads to a 60% amplification in emotional reactivity.
● Less empathy: Decreasing sleep debt by 8 hours increases empathic response by 30%.
● Difficulty reading emotions
● Increased risk taking
● Unethical behavior
It’s actually possible to measure the productivity costs of sleep debt in dollars and cents. In an 8-month controlled trial we ran with a Fortune 200 sales team, sellers using Rise increased key activities as their sleep improved. Outbound calls increased by 50%, while overall revenue increased by 14%. When you assume roughly 70% of your salesforce is underslept, it's easy to see how fatigue-related productivity losses add up quickly.
Why We Fail to Make the Connection Between Sleep Debt and Productivity
So why don’t organizations prioritize sleep? Caffeine may be one reason, since we can use it to counteract low levels of wakefulness. But this use ultimately boomerangs, as caffeine negatively impacts that night's sleep, triggering a vicious cycle.
The more insidious reason leaders don’t focus more on sleep debt is we as humans tend to underestimate just how underslept we are and how impaired our performance really is. Indeed, sleep researchers have wondered, if sleep is so important to our daily performance, then why don't we realize it? What they've found consistently is significantly sleep-deprived individuals repeatedly rate themselves subjectively as only moderately sleepy. In "Why Six Hours of Sleep Is As Bad As None At All" the author aptly describes the findings of seminal research: "Lack of sleep ... apparently tricks you into thinking you’re an office all-star. People who slept just six hours per night for two weeks functioned as poorly as if they’d gone without sleep for 48 hours—yet they thought they were performing at the top of their game."
How to Improve Your Team's Productivity Through More Sleep
The good news is some organizations appear to be changing their tune. Google and Goldman Sachs cover healthy sleep in employee trainings. Aetna actually pays its employees about a buck for every night they sleep seven to nine hours. We at Rise Science are seeing an uptick in companies prioritizing sleep for improved productivity outcomes.
The even better news is that improving our sleep—and reaping the rewards for productivity—is in our control (unlike much of the current moment). Managers and other organizational leaders can encourage their teams to harness the benefits of regular sleep. Not sure where to start? Research shows that simply giving employees more control over their schedule, without even directly influencing their sleep, has lasting benefits.
But there are also ways you can explicitly prioritize sleep for improved productivity outcomes. These fall into three main categories: awareness, environment, and behavior.
If all this sounds like a lot, consider the alternative: less focus, decreased memory and learning, irritability, and a cut to your bottom line. A lot is uncertain right now, but the need to run a business remains. If you’re looking for tools and tricks to stabilize your team’s productivity, why not start with the one that is a certainty? Sleep is the most important investment you can make.
At Rise, we're committed to bringing you content that's 100% backed by science. To discuss, go deeper, or question any of the claims we make here, please get in touch: firstname.lastname@example.org.
Jeff Kahn is Co-Founder and CEO at Rise Science. Rise is the only app that delivers the real-world benefits of better sleep.
Jeff and his Rise co-founder were the first to publish research on technology-enabled sleep behavior modification over a decade ago, and have recently completed the largest known study on sleep and real-world job performance across the NFL and sales teams.
Jeff's research and work have been featured in The New York Times, Harvard Business Review, and The Wall Street Journal, and on ESPN, NBC, CBS, and Fox Sports. Jeff holds a B.S. in Health Systems Engineering and an M.S. in Engineering Design & Innovation from Northwestern University.
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