The Business Case for SDRs in 2025
Estimated reading time: 4 minutes
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It’s been 14 years since Aaron Ross’ “Predictable Revenue” hit the shelves and 22 years since Aaron and the Salesforce team built out their specialised Sales Development Team to add $100 million in recurring revenue. The landscape for Sales Development has changed dramatically in that time, with over 1 million SDRs out in the market prospecting enhanced with automation technology it has never been noisier.
With increased competition for buyer’s attention, increasing labour costs and decreasing returns, it is no surprise that many naysayers are taking to LinkedIn declaring the death of the SDR!…Are they correct?
Is there a place for the SDR in 2025?
For the last 20 years or so the Predictable Revenue mindset has ruled the sales development world, fueled by a growth-at-all-costs mindset and “cheap” investment. The premise of the idea has been to scale out the SDR team send out 50-100 emails per day per rep and have them call through the list – I have never really understood how the email stops the call from being “a cold call”, but this is semantics. This approach was solid for many years but as the noise in the market grew conversion rates started to decline – interestingly call to connect rates have maintained relative stability at circa 9%.
In the last couple of years, particularly in SaaS, there has been the resurgence of the “Full Cycle Rep” – a seller that prospects and closes deals – to attempt to improve the economics of the revenue funnel. Little secret; this wasn’t a resurgence for the great sellers who prospect day in day out filling their own pipeline.
In many cases the Full Cycle Rep is unavoidable, and specialism doesn’t make sense – highly transactional, low average order values (sub $10k ARR) or low touch sales processes. In lots of these scenarios’ buyers want to self-serve and product-led growth models are key. Companies / products in this part of the market will run incredibly lean, powered by automation with minimal human intervention.
“Not spam canon AI SDRs”
Like all things there is a time and a place – when deployed correctly, with the right use case, the SDR can be one of the most critical functions in a business. When things get tough – recession, pandemic, etc – if you buckle down you can often sell your way out with a consistent and religious approach to creating pipeline. Why do most struggle? Because building, training and retaining an SDR team is really hard and consistently hunting for pipeline is exhausting.
Just to be clear, there is a place for well-executed Sales Development—not spam canon AI SDRs that are programmed with information and not context—”You are hiring” is not personalisation.
By well-executed I mean “Conscious outreach across all appropriate channels that is Relevant, Concise, Topical & Action Oriented”.
The business case is strong in many organisations and industries for Sales specialisation and Sales Development reps. Where the Sales Cycle is long, complex, with many points of human involvement to co-create the business case and go deep on the technical or change management process. These sales processes are often coupled with high Average Order Values, meaning the impact of dropping the ball at any part of the sales process can be huge.
Many organisations are still wildly inefficient in their sales teams, yet to adopt any Hybrid or Inside sales structure meaning sellers in the field are literally driving around between prospective customers. These organisations tend to have a very hands-on sales process due to the nature of the solutions they provide their market. This is a hugely different skill set from what is required in Sales Development – it is hard to find people that can and want to do both elements well and consistently.
This first use case – Traditional Sales Force – is perhaps the most challenging to get started with. There will likely be a lack of skill and will in the organisation to build out the foundational SDR team to prove out the model, often a huge change management programme is required – not particularly appealing for a pilot to quickly prove the concept. Here finding an experience partner that can rapidly get to market is key.
For those companies with hybrid or inside sales teams having SDRs focused on the right thing is paramount to their success, loading 50-100 emails a day out to broadly the right job title will not cut it.
2025’s Top 5 SDR Plays:
We see five clear use cases for Sales Development in 2025 and beyond:
Proactive Net New Customer Acquisition
Probably the most difficult task for 99% of businesses, SDRs should be laser-focused on starting conversations with your ideal customers. Target your key target customers and grab your competitor’s market share whilst maintaining that key human element, with well-constructed value-first messaging. As champions and fans move into new roles, SDRs can track where they got and provide highly personalised re-engagement.
Install Base Retention
Where companies have a large install base covering the long tail with dedicated Account Managers or sellers is just not practical. Often this long tail is on end-of-life systems making them prime targets for your competition. SDR teams can engage and nurture these customers maintaining your install base, nurturing and upselling to them.
MQL Conversion
Sellers are focused on this month or this quarter, they have a revenue number to hit or they will be out of a job, this is a harsh reality of the life of the seller. This means sellers will often ruthlessly prioritise today’s problem even if it hurts them in the long run. Most Marketing Leads are not in the position where they are ready to jump straight into a sales conversation so are frequently not prioritised by sellers. SDRs swiftly engage MQLs, nurturing and qualifying them to a point they are ready for the sales team.
Account-Based Sales Development
Similar to acquiring new customers but this can expand to your existing customer base. SDRs conduct in-depth account research, understand their structure, map out and engage key decision-makers, and potential pain points. In an Internet first world of information equity, publically available information is a commodity, SDRs can speak with your prospective customers directly, filling in the gaps of what is in the public domain to bring together that all-important context.
Event Drive
The B2B event market is worth an estimated $500 Billion (CMI), as companies jostle to stand out and leave a lasting impression in the minds of their customers and out do their competitors in a public forum. Companies are spending millions to showcase at conferences often with very little to show for it – in one organisation we audited less than 2% of their tradeshow leads were followed up on – leaving millions on the table! SDRs can be effectively utilised for both pre-event and post-event activities to maximise event ROI.
The True cost of an SDR
There is a myth floating around that you can hire a handful of junior sellers for £30k a piece and set them away calling and this makes an SDR team. This myth is flawed on 2 counts;
- The real fully weighted cost per SDR is more accurately £105,000 per annum.
- The cost of missed opportunity is theoretically in the millions. Reps with their hands tied behind their backs due to a lack of training, coaching, infrastructure, technology and direction are doomed to fail. So not only are companies throwing away the salary investment they will never land the forecast gains from building this team.
With an average SDR tenure of 14 months, you will have to nail your recruitment and training processes as upfront mistakes will set you back 6-9 months which, according to Gong is circa 45% of the tenure of a VP of Sales. So you must get it right and do so quickly.
How will SDRs fit into your sales strategy for 2025? Their input could be the key to building consistent pipeline
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