+44 (0)191 481 3800
Deltic House, Kingfisher Way,
Silverlink Business Park,
Newcastle, NE28 9NX
Type and hit enter
Every sales leader wants to build a sales pipeline that delivers predictable revenue. That is why the top priority for experienced business development (BD) teams is to accelerate deals through the sales cycle and win new customers.
Unfortunately, focus can slip from proactive funnel activity. Without a consistent stream of highly qualified sales leads, the pipeline stops growing and BD teams are left twiddling their thumbs. This is where Sales Development Representatives (SDRs) enter the picture.
The Sales Development function drives outbound sales activity. It provides boots on the ground to engage with more good-fit customers and uncover new business opportunities. It keeps the lead generation engine running and your BDMs busy closing customers.
When implemented effectively, a Sales Development team is essential for any business looking to grow their customer base and generate more revenue.
But is it better to build or buy your SDR team?
Building a Sales Development team is expensive and time-consuming. There is no two ways about it. But when done right it will pay dividends, so it is important to understand where that money and effort should be spent.
Let’s start with the money.
The cost to hire, train, and manage a single SDR is estimated to be just shy of £104,000 in the UK – that’s almost €120,000 or $130,000 – in year one. This includes the cost of technology infrastructure, coaching and development, salary and bonus, plus overhead expenses.
Now let’s talk about the effort.
Hiring a SDR is step one. But creating an effective SDR team requires significant experience, infrastructure, and a process in place to successfully onboard, train, and retain your sales team.
Poor input equals poor output.
That’s why SDR teams are only as good as the coaching they receive.
Your sales process will soon reveal low- and high-performers, exposing areas of weakness and highlighting opportunities for improvement. An effective team leader can increase the team’s capacity to consistently generate pipeline with a focus on continuous development.
Yet training and coaching costs are higher than you might expect. In addition to recruitment, the initial training and ongoing shared management of one SDR costs approximately £27,239 (€30,886/$33,891) in year one.
Looking for growth outside of your domestic market? The capacity to sell in different geographies demands local specialists with multilingual skills – pushing up the price for hiring a multilingual SDR.
As you read more, you’ll realise that calculating the real cost of building an in-house sales team is complex.
That’s why we’ve made it simple with our SDR Cost Calculator.
While £104,000 – almost €120,000 or $130,000 – for an SDR might already seem a lot, if you want to generate more quality leads though, you will need to hire more than one.
To produce a consistent stream of high-quality sales leads, one should start with at least a 2-heads team and scale up to 8-10 if needed. Increasing the size of the team reduces the risk of downtime in the lead generation and nurture processes if your SDRs are sick or on holiday and improves your capacity to deliver predictable revenue, consistently.
With bigger teams though, come bigger challenges.
For Brent Adamson and Mathew Dixon, authors of The Challenger Sale, not all SDRs perform the same, especially in a solution selling environment.
With the shift from low-complexity, transactional selling to solution selling, achieving your revenue goals is tied to the performance of a smaller number of high-performing SDRs.
Selling in complex environments makes reducing the skills gap between top and average performers more important than ever.
While ongoing training helps optimising the overall performance of an SDR team, retention becomes another key area of investment. Losing the reps that generate up to 80% of your pipeline would hamper your efforts to generate revenue.
Bonuses and benefits can help retain salespeople, but they too come at an extra cost of more than £10,000 (€11,341/$12,465) per SDR and are no remedy for a notoriously stressful job.
Last year, Nice calculated that the attrition rate for SDRs in the US and in the UK was as high as 42%.
According to Employee Benefit News, it costs up to 33% of an employee’s annual salary to replace them. This figure takes into account three things:
This causes a loss of revenue and an extra cost of about £34,000 per new hire (around €38,579 or $42,369).
But there’s more.
Hiring, training and setting up for success the right talent takes time. This puts pressure on the rest of the SDR team, who will have to drive the same amount of outbound sales activity with less resources.
The result? An even higher turnover risk and a snowball effect that risks drying up your pipeline.
Using an outsourced SDR team can be a sensible idea to achieve your revenue goals while avoiding the hidden costs (and risks) of hiring a new one.
But here’s 4 simple reasons why it’s not just a matter of lowering the cost:
Choosing to outsource your SDR team with durhamlane can provide your business with the front-end sales support it needs to win more customers.
But our SDR teams do not build only qualified sales pipeline: we can cover the full sales cycle for your products or services, connecting with your marketing function to accelerate new deals through the pipeline, and offer you the support you need to proactively grow your existing customer base.
Want to calculate the real cost of growing your sales team in-house? We’ve made it simple with our SDR Cost Calculator.