Why SDRs Can't Juggle Inbound and Outbound and How to Fix It with Predictable Revenue CEO Aaron Ross

Hello everyone, we're going to give it about one more minute for people to enter into the meeting and then we will kick it off. Okay, we're going to start. Hello everyone, my name is Lindsay Leggett and I'm on the SAS/STR team. Thank you so much for joining us today in this roundtable discussion. I'm going to go over just a few quick housekeeping notes. Aaron, if you don't mind moving to the next slide. And then I'm going to pass it over to our host. This is an interactive 30-minute session. We encourage you to turn on your camera, keep your audio probably muted when you're not talking, but feel free to unmute and really join the conversation with Erin so it really does feel like a very interactive discussion. The ways you can join the conversation are a few different ways. Turn on your— unmute yourself and join the conversation. You can add a comment into the Slack or the chat channel, which Aaron and I will both be monitoring. And you can also hit the raise your hand button to kind of signal that you have something that you'd like to share with the group. These sessions will be recorded, just so you know. And without further ado, I'd like to pass it over to Aaron Ross, the CEO of Predictable Revenue. Thank you, Aaron, for being with us today.

Yeah. All right. Thanks, Lindsay. And hello, everyone. Yeah, we got this, you know, this title. Let me close, move my chat stuff. Why SDRs can't juggle inbound and outbound. All right. Pretty specific title. And the reason why is because I think I saw maybe a year ago, within the last couple of years, a report from the Bridge Group that said 75% of SDR teams basically juggle inbound and outbound, inbound lead response and outbound prospecting. And there's a lot of variety in terms of what that means, but there's a reason why they shouldn't. It's a bad idea if you can do anything to avoid it. Now, first, like outbound, outbound is great, can be great, can be amazing. But of course, everyone in the outbound business, just like everyone in every business, a lot of people's jobs are trying to convince you that it's possible, that it's easy. That you can get results, and it's true, it can, it is possible. You can get results, but it's not easy, right? So it's— what it's easy to do is to get started and go through the motions and be generating like activity, calls, emails, LinkedIn, all this stuff, but it's hard to get results, and it's even harder to get results that stick, that are sustainable year after year. But it's— when you do it, it's worth it. It's totally worth it. So that's just a bit of a prelude. There's a, there's a workshop I'd here before on kind of outbound sales mistakes even smart leaders make. And so there are a couple I will mention. They're important to the context of this. Like, for example, one of them is just the fact that it takes time. Like, it's a journey to create a team, get it started, get results— well, get any results first, then get good results, and then have them stick past once people start coming and going. And pretty typically we'd say You know, even here, 4 to 8 months if you're starting from scratch, 4 to 8 months to get a team up and running. Let's say you build your own team. There's lots of variety of ways to outsource, to get outside help. But let's just say you build your own team. But even if you're getting outside help, it still, it just takes time. It takes longer than people realize. So to get it stood up, staffed, not to just get it working, but to have it be some sort of predictable output and of quality, probably at least 4 to 8 months is pretty typical. Could it happen faster? Yeah, could. Could it take longer? Yeah, and it happens a lot actually. It takes even longer than that, especially if you're in a challenging market. If you're in a commoditized market, if you're in an incredibly noisy market, which is a lot of markets, if you're not differentiated, there's a lot of reasons why it might take even longer. Kind of get the right people with the right process, the right messaging, and kind of build the engine that creates predictable pipeline and predictable revenue. And then let's say that 4 to 8 months gets your team up and running, and you're like, okay, it's working, I don't have to watch it every day. Then you got to add a sales cycle to that, to when you're going to see regular revenue come in. And you can get a lucky deal here and there in the beginning, but to see revenue come in month after month after month, So, you know, if you have a 6-month outbound sales cycle, and one catch, I don't know how many people here are new to outbound, maybe you had some success with inbound, and you're like, yeah, our sales cycle is 2 months. And then you think, hmm, okay, so when we do outbound, our sales cycle will be 2 months. No, 4 months. It's pretty safe bet to double it. So outbound sales cycle, let's say it's 6 months. Pretty typical if you're doing like, you know, mid-five-figure and up. So it takes you 6 months to get the team up and running, it's working the way you want, it's great, plus another 6 months, you know, it's about a year to see like regular deals and revenue coming in. Yeah, you'd see some stuff here and there ahead of time, but to get predictable revenue, a year. And it's not uncommon to see 18 months, like you lose the right person at the wrong time, or there's all kinds of things that can happen. Okay. So that's one, right? That's the first one. Now the second one is the main— let's talk about this one because this is a big one. And I'll be all over the questions that people have for this. So don't be shy. The inbound— here's the thing is that inbound, when I say inbound SDR, right? This is the job where you have marketing leads or leads coming into your website or some other, whatever the source is, or the gate coming in. And there's a junior salesperson who's responding to them. Maybe calling them, whatever, they respond to those inbound leads, people who know something about you, and finding which ones are a good fit and passing them to sales. That job sounds very similar to the outbound prospector's job where they're talking to prospects and they're calling and emailing and LinkedIn social media or creative ways, maybe, maybe not, to reach out to people and talk to them, see if there's a good fit and passing the right ones to sales. So a lot of the metrics sound the same. A lot of the setting meetings sounds the same. The job sounds the same. The word SDR is just— I don't like— unfortunately we use the word SDR with both, but the jobs are completely different. They're completely different. It's not to say that Someone can't switch jobs. But when you're doing it at the same time, they're completely different. And here's some examples why. The comp should be different, the metrics different, the process, the messaging, the way you use your tools, your mindset. The jobs are completely different. One is very reactive, about speed. The rhythm is different. You know, inbound leads come in, you need to talk to them within minutes to hours or 24 hours. That is the complete opposite of outbound prospecting. When you're— it takes weeks to go through the whole rhythm of going from a cold account to a good meeting, right? It takes an average of 2 to 4 weeks to go from, again, a cold account to a quality meeting and a salesperson was happy with. So the rhythms are completely different. You know, in inbound SDR job, you're talking about leads, inbound leads, conversion rates. All right, and, but the word lead is almost meaningless in outbound. You're talking there about accounts and prospects. So the way you use a CRM usually is different. So typically, if you use salesforce.com or something else that has con— so in Salesforce, they've got the leads tab and they've got contacts and accounts. So for inbound leads or any kind of chunks of leads that you're not really sure where they came from or what The Leads tab is where you sort of send everything to sort the treasure from the trash. You only pass the good ones to, but for outbound prospecting, you usually want to use and start with from the Accounts area, right? Because you want to predefine a quality list of accounts and each account has multiple contacts. I mean, I know there's like small, there's, if you're not doing, um, like very transactional, like single owner types of prospecting, And of course, today you've got things like Outreach and Salesloft that just can fill an account with completely meaningless volumes of activities. But in principle, when you're doing outbound, you're using the accounts with multiple contacts. So the mindset is different. If I'm an inbound SDR, I'm just like, my desktop is filling up with stuff, my inbox is filling up with stuff, I just gotta get through it. It's how can I react to this quickly and sort through it and dedupe. And that's completely different again from outbound prospecting, where I have a blank piece of paper, a blank screen, like, how am I going to make my day today? And I noticed this even way back at salesforce.com, where we'd promote an inbound SDR. At that time, they were just called SRS, sales reps. I don't remember why, because they weren't really, whatever. Uh, and they would be promoted to the prospecting role. And we call them EBRs, enterprise business reps. And it took 6 weeks for that inbound person to retrain, to like flip their mindset from being waiting for things to drop in their lap to I'm gonna make things happen. Now they definitely could make that, they made that switch, but again, as example, the jobs are completely different. And unless you're one— if you have one SDR, yeah, they gotta juggle. But if you want results from outbound, the worst thing you can do is have someone do it part-time. I mean, it's not— or maybe the worst thing you can do is do zero, but you're not going to get significant results until you've got one person or a single resource dedicated to it. It's like any sports team. If you want a team that wins, you don't have 10 people who are both doing attacks, uh, offense and defense. You've got half the team doing offense and half defense. And that's the same thing if you want a highly effective SDR function. All your SDRs don't do both inbound and outbound. You basically say, if you have capacity, you have X number of leads, and it takes let's just do some simple math. Um, again, roughly about for every lead that a human has to review, right? And so we're not counting things that are auto-discounted, deduplicated. So one inbound SDR can say handle about 400 leads a month that they're, they're humanly looking at. Again, that could be higher or lower depending on if you have 1,000 webinar leads, right, versus if you— that might be the same amount of work as 100 contact me, like demos. But let's just take 400 per inbound SDR. So let's say you have 4,000 leads per month. Okay, so you need 10 inbound SDRs to like handle all those leads, and anyone left over is you just dedicate to outbound. So the point is you're trying to do two things: put the right number of inbound SDRs on the inbound leads, depending on the volume there, and you're trying to protect and dedicate your outbound prospectors to do as much outbound, pure outbound, as possible.

Aaron, it looks like we have a few questions.

Yeah, we've got some questions coming in. Uh, let's see here. Let me just take a quick look. So first, I'm actually gonna throw out the question: does this, does this resonate? I mean, by the way, if you, if you don't agree, that's fine. You can You can let me know, but I'm telling you from experience. And now, so let's see here, Robin. Now, if budget's tight, does one outbound SDR work, or is it better to wait and budget for and hire two? Well, that's a good question. I would say outbound, we take, you know, we took it, I can't even talk today, right? We, it takes a long time. You have to be prepared for it to take longer than you want. If it happens faster, great. So if you can start, if you can start with one person, uh, start with one full-time ideally. And by the way, if they're ramping, there's so many, if they're training and ramping, they should be doing, and they should be calling inbound leads as part of their onboarding. It's part of their training. As soon as they're trained, like as soon as you can get them to full-time outbound, better. Especially these days, as soon as you can get 2 people, even if it's 1 full-time and 1 part-time, but you know, 2 people, it's so important because everyone I think is more emotionally and physically isolated. And it's very lonely if you're the only person doing something. Should you still do it? Yes. If you can get someone else to be a buddy and they could be, again, there's managers and coaches are better than nothing. Full-time prospector is ideal, but for the buddy system, for to egg each other on, to have also, if one person, if it's working or not, when it's one person, it's like, hmm, is it that person or is the process? When you have two people doing it, you can have, it's easier to tell if both are failing or both are succeeding. It's probably not them, right? You have more data points to kind of gauge what's working, what's not. So hope that answers that question. And remember, if you have one SDR, yeah, they use kind of how to balance their time, which is inbound leads come first typically, right? Because they're already coming to you, whatever's left over, how can you block off time for them to do outbound? But the outbound's a nice to have, you know, just don't expect much from it. So there's another question here. Hey, what type of skill set should the SDR have? Is it typically a kid, a couple years out of college? So again, for inbound SDR or outbound SDR? The career path is typically you start at inbound because it's easier, people coming to you, and you can have someone who's straight out of college or a couple years out of college. It's pretty common. We've never had a situation like the market today where there's a lot of experienced SDRs available. That's never been the case because usually SDR, it's a stepping stone job. If someone's done it and done it well, they don't want to do it again. So if they have experience and they're any good, it's It's hard to find people who are willing to take that job again. So that's different. But in, in regular years in the past, yeah, you'd hire someone who had zero to few years experience in something. And they saw this as a career step, a stepping stone to sales or tech sales. So they started inbound SDR. They do that, get good at that for, you know, 6 to 8 to 12 months, get promoted to outbound prospector, outbound SDR, do that for again, 6 to 8 to 12 months. 8 to 12, 8 to 14 is pretty typical. And then they go to, ideally, to the sales career path, small business sales and up. But as a reminder, these SDRs have talked to customers on the phone. They're so knowledgeable. And if they've done well, they can do anything well in your company: support, customer success, partnering, marketing, like almost anything well. So that's one of the best parts about creating this SDR role and career path is it can be an amazing feeder for talented people who may not have a ton of experience, but to bring them in, make them super smart and experienced about the customers, and they've proven they have the qualities to be successful. Because if you don't have the qualities to be successful as a prospector, like that proactive mindset, you're basically saying they can do almost anything. Right. I think, whoops. I was trying to move the chat, didn't work. So I got one more question. Phil had this: In startup mode, how do you balance those two different outbound versus inbound roles? As a team constrained with resources, hiring and expanding the team can be hard. Do you believe philosophically these roles should be separated from day one? Yes. So I do believe philosophically they should be separated from day one, as soon as that is possible in any shape any form or shape. It kind of means that if outbound is a high priority, you'd find a way to make it happen. If it's not, then, yeah, again, don't expect much from it until you've got one or at least one or two dedicated people on it. So if you have— and there's the thing is there's a lot of variability with inbound, right? If you only have 50 leads a month, that could be probably handled by a sales ops person or someone part-time. If you're getting towards 100, 200, 300 leads a month, okay, you need someone who's probably dedicated to that as part of their main job, 'cause that's where most of the revenue's coming from, possibly, unless you have a big partner channel. And so you're kind of deciding, which is based on when, as your lead inbound leads grow, it's like, you know, it might be even the VP of sales doing a handful at the beginning, and then they get a junior person to do it. And then the junior person fills up and then you get a second person. So at some point, you just have to say, if outbound is really important, we need to make the decision to get someone who's dedicated to it. And that's— you just gotta make it happen. And if it's not happening, don't expect much. You can't put it in the projections. If someone's doing it part-time, don't even bother putting it into the forecast or projections. All right, we can come back to this if there's more questions, but ultimately, again, the point is the jobs are completely different. The mindset, the metrics, the rhythms are completely different. They need to be separate as soon as possible. As soon as you have 2 people, ideally they're separate. So one more mistake here, just on like the big picture with outbound, and this is related, is inaccurate metrics. These dashboards have like outbound, outbound dashboards, but they dashboards in general are so inaccurate. Outbound is especially inaccurate because there's a lot more subjectivity with outbound dashboards. You know, was it qualified or not? Should it be passed or not? Did— was the salesperson who requalified— is that salesperson knowing what they're doing or not? Right? So there's like training and coaching between the prospectors, the SDRs, inbound, outbound salespeople. It's hard to make that consistent, and people are just putting whatever they think in sometimes. So what you end up happening, and you end up with a dashboard where the pipeline number is often, um, it's hard to say. I actually don't know how inaccurate it is. I wouldn't be surprised if a lot of people have— if the actual, the true outbound pipeline is like half of what they're showing, or 75%. Not only because the inaccuracies, inaccuracies of the Is it qualified or not? Kind of, should it even be in the pipeline? Because a lot of, a lot of fluff gets in through lack of training and consistency. But there's also called attribution. A lot of things that are labeled as outbound actually are mislabeled, misattributed, attributed, and should have been a different campaign source. I'll give you an example. So if I'm, if I am prospecting to a company All right, and I get a prospect into General Electric, right? And then an opportunity comes in from another— into the website. But while I was prospecting it, right, I'll claim that and GE comes in, I'll claim that as outbound. But then it turns out the salesperson talks to that prospect and a friend of theirs referred them in. So it turns out through conversation, you discovered that it wasn't that prospecting that sourced that, it was another source, it was a partner. It happens all the time. There's a lot of gray areas between inbound and outbound when prospectors are putting things out on LinkedIn and through email, and there's all kinds of stuff coming in through your website. And the more— the bigger you are, the more gray areas you've got. So there's a lot of inaccuracies on the attribution. Bottom line is your dashboards are inaccurate. It's hard to trust them, especially with outbound, and if you don't really believe in them, They, they— it's like the grocery store. The studies show that 5% of transactions have an error, but of course, for some reason, 80% of those errors favor the grocery store. So in outbound, pretty much, let's call it, yeah, tremendous inaccuracies in dashboards. How often do you think that the inaccuracies are showing a falsely deflated pipeline from outbound? I don't— it never happens. It's always falsely inflated for a variety of reasons, rarely intentional. So the sort— the solution to that, by the way, is an audit process. For every opportunity that's being qualified, especially outbound, which is more important there, that has to be checked by a manager. There's some third party in the company that goes through and checks them all for consistency. Was it qualified? Was it entered correctly? Was it outbound? That way you can trust that your outbound pipe, the outbound pipeline is accurate. So, you know, if we're investing X, we're getting Y. So I'll put my— we got time for some, I think a few minutes for more questions in the chat box. And this is the way you can reach out if you want to follow up in a different way. But I think, again, remember inbound, outbound, completely different jobs. Specialize them as soon as you can. And then along with that, that will help with your metrics as well, having separate inbound and outbound metrics. Like, I've seen these— I've seen dashboards where they have one SDR report. It's like number of calls and emails and appointments. They're like, well, what's, what's in there is outbound versus inbound. Like, it's all, it's all muddied together. That doesn't make any sense. So it'll help with metrics. And then if you go through the next step of having things like an audit process to really clarify what's going into your pipeline, you can start to really understand what's working, what's not in your SDR functions versus Honestly being, I would say misled, not intentionally. It's just, people are people. They just have, are too optimistic and a lot of fluff gets into the pipeline.

Aaron, we've got a few questions coming in. I'm gonna read you a few, 'cause we've got about 5 minutes left. From Bruce, it seems like the success rate for outbound calls are shrinking more and more. Do you favor email outbound over phone outbound? Also, what are your thoughts on SMS?

Well, right now we favor LinkedIn as number one. Email is number two. Calling— we're believers in calling, but it just depends. Are the people you're reaching out to on their phones or not? There's a lot of remote work. There's a lot of reasons why calling has been more up and down or erratic this year. Email is just too busy. LinkedIn is the current Star. So all three, but LinkedIn is often number one, usually number one. You know, again, some companies— I talked to one yesterday, a lot of their market is not on LinkedIn. So you gotta— it ultimately comes to knowing your market, knowing your customer. But B2B is LinkedIn.

Great. A question from Robin: Suppose all is inbound now regarding planning for 2021. Suppose you want to start outbound and hire 1 or 2 outbound reps. Sales cycle is 60 to 90 days. ACV is $20K to $30K. How would you calculate what revenue is expected from outbound?

Yeah, you know, there's an article, it's from the Impossible book, but I put up as a blog. It's called How to Build an Outbound Team Right the First Time. I'll throw it up in the in the chat, I believe. There we go. That's probably a good starting point. Whoops, that's private. Hold on. Or maybe—

I can get it.

Yeah. So it's got— because remember, timeline, revenue-wise, it's kind of hard to say how it's going to pay for itself cash-wise. So you're looking at revenue, again, you're probably— it's around a year-ish to to get that and have the confidence and belief of it. Cash-wise, a little harder to say, but it's a starting point for getting your handle on how long things take, some basic projections, and the costs easier. The main costs are just the salaries. So salaries of a prospector, prospectors, and you can include some part-time management. Obviously, if you— there's some technology, which is less than the salaries, and then if there's like an outside consultant or fee, could be some But salaries are the main part.

Great. We've got Douglas asking, when you are aiming to, aiming to increase opportunities with enterprise-level leads, is there a payoff by directing these leads from inbound to an outbound channel? That's question part 1. And then part 2 is talking about the balance between spread of the first contact and personalization.

Yep. So Douglas, let me just— I'll come back to that. I got an answer for you. So just back to Robin, one question on one point is that remember, if your current— if it's all inbound and your current sales cycle is 2 to 3 months, you have to project your sales cycle for outbound will be longer than that, 4 months, 5 months. And ACV though, your average ACV from outbound should be a lot higher than your average ACV from inbound because you're specifically looking for bigger deals. I think it's all on that article. Couldn't be certain, but just some things to keep in mind. Okay. So let's go back to Douglas. So when you have inbound leads and from enterprises, a lot of times they're lower-level people. So you should reach out to them with your inbound SDR, talk to them, get information. If they don't have any power or influence, that is often when you kick it, then you kick it over to a prospector. Who would go up to the executive level or whatever is appropriate to suss out, hey, is there something here? Like, was that— whoever that came in, was that a real signal that there's a problem or not? So that's something you can do, is partner the inbound motion with the outbound motion so they're more in sync and help each other to get to the right people at the company. I think that was your question. Now, What I wouldn't say is there's, I don't, there's not a reason you normally would not direct a lead automatically to outbound unless they've already been working the account and they've got activity and they're kind of like, they've, there's come these rules of engagement, the Quantri rules of engagement. Is it kind of like outbound? Are they working it? Are they active in it? Then leads would go to them. And if they're not, then they'd go to the inbound person. SGR to qualify first. There's all kinds of complexity and rules and things to— like, it just gets more complicated as you get bigger. Any follow-up from Robin or Douglas? Especially, those are good questions. And by the way, Bruce, I think I mentioned, just to be clear, we like the mix of email, LinkedIn, and phone the best. And so I didn't answer your SMS. SMS texting is usually better once you've made contact in some other channel to start texting. I do know, uh, Justin Michael is a guy who said he FaceTimed the VP of sales as a cold call and the guy picked up and he's like, what the hell? But, you know, he's just like, hey, which one? Put a face— he basically had, he had the, the, the courage to just to do it. And it worked out that time. But normally, uh, SMS and other things are a follow-up. Once you make contact in another place. But hey, I'm all for trying things out.

Aaron, we are right about time. Any final words before we let the team or the group end?

Yeah, I say, so again, Jason M. Lemkin and I did this book Impossible to Inevitable from impossible.com. It's got a huge section on outbound. There's a ton of very tactical stuff in there in this book. Again, you can get to fromimpossible.com, there's a link to the book itself. And if you are investing in a team, between the article I sent there and the book, there's a lot of education. There's a lot of noise out there, and I feel like we're— I and our team really try to put the truth in a way that's helpful and not trying to mislead people into making the wrong— You shouldn't do outbound if it's not a fit. So how do you know if it's a fit or if it's the right time? So just want to be out there to help you all through this and really appreciate you showing up for today and hope you enjoy SASTR.

Thanks everyone for joining. Have a good afternoon.

Thanks, Lindsay.

Thanks,