8 Reasons Sales Development Teams Fail

The original version of this article, authored by Craig Rosenberg, was published by TOPO, now Gartner. 

Sales development teams — also called lead qualification, lead development, account development, telemarketing or inside sales — are responsible for handing qualified leads over to a salesperson who follows up and, hopefully, closes the deal. The best companies have highly optimized sales development processes in place.

We have identified eight reasons that sales development teams fail, along with some tips on how to avoid these problems.

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No. 1: Sales development is treated as less important

Many organizations view the sales development team as the bottom of the food chain but in reality, they are absolutely critical to making or breaking your pipeline. 

As such, sales leadership needs to care deeply about how the group is perceived and how they feel about themselves. Organizations should find ways to recognize sales development’s efforts. Some examples:

• Invite top sales development performers to sales club
• Mention individual and overall team performance at sales meetings or all-hands meetings
• Send saleswide and companywide emails recognizing great qualified leads or excellent work
• Ensure that sales development is thanked for qualified leads that close 

No. 2: The team lacks direct management and leadership

It is absolutely critical that sales development teams have leadership at all times. 

Sales development is challenging and will fail if someone isn’t there full time to help optimize, coach, motivate, hire and care about the team. This problem is a guaranteed recipe for failure.

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Once there are more than eight sales development representatives (SDRs) to one direct manager, an organization should hire or promote someone else to be a direct manager. Otherwise, it’s very difficult to manage and coach effectively. 

If the headcount/costs are a factor and there is a strong director and mature sales development process, you may consider hybrid, player-coaches as a fallback option.

No. 3: No training or coaching

While SDRs should understand the product, the key to success is to dedicate time and resources to specific training and coaching.

Training

Training and onboarding should consist of:

• Buyer persona training 
• Sales development skills training 
• Headset training 
• Tools training 
• Product training

Coaching

Managers should provide four to five hours of coaching per month. Some ideas for coaching:

• Call monitoring 
• One-on-ones 
• CRM, tools and process coaching 

No. 4: No agreed-upon qualified lead definition

There are some key points to this part of the process:

• A definition has to be agreed upon by both sales development and sales.
• Sales must commit to a service-level agreement to follow up on leads that fit the definition of a qualified lead.
• The definition cannot be too restrictive. It’s best to start broad and then tighten up later once there is data and sales rep feedback.

The argument over lead definitions needs to be resolved before the first qualified lead is delivered so expectations are set for both sides. The definition should be refined and optimized over time.

No. 5: Not focusing on generating qualified leads

Many organizations allow sales development to become the dumping ground for other tasks, such as sales support, inviting people to events and doing surveys.

Decide on what the qualified lead definition will be, decide on a quota, and then focus and optimize toward exceeding that goal. This is one reason the team needs a dedicated manager to keep the SDRs focused. 

No. 6:  Bad compensation plans/wrong incentives

The sales development compensation plan should be simple:

• Monthly quota for qualified leads (e.g., 10 qualified leads).
• Compensation per qualified lead (e.g., if the SDR bonus is $2,000, each qualified lead is $200).
• Accelerated compensation for qualified leads delivered over quota (e.g., each qualified lead over 10 will be paid at $300).

If you want to compensate for closed deals, then give them a bonus when a deal closes. But SDRs should be compensated based on what they can control, and they cannot control whether or not a deal closes. If SDRs are tied only to revenue, they will become sales support by making quotes, setting follow-ups and so forth. 

No. 8:  Wrong people in the job

It’s hard to identify if someone can really do the SDR job until they are actually sitting in the seat. Problems arise when the SDR team becomes an underperforming, demoralized mess. Here are a couple things to consider:

• Optimize the job profile based on previous hires — good and bad. 
• Release people who are bad fits — the SDR job can be a negative experience for people who aren’t suited for it. 

No. 8: Lack of communication

Communication is often the root cause of a failing team. The sales development team sits in between sales and marketing so there has to be lots of bidirectional feedback. Here are some important “must-have” meetings:

• Sales development-marketing meeting. In an ideal process, marketing is feeding leads to the sales development team to follow-up on. Sales development and marketing need to meet regularly to optimize lead programs. Both sides need to look at overall lead quality and follow up.
• Sales development-sales meeting. Sales development needs to meet with sales to optimize the lead process based on both qualitative and quantitative feedback. Another area that can lift conversion is to optimize the hand-off and introduction from the salesperson.