BDR ROI CALCULATION

Introduction:

This report aims to analyze the cost-effectiveness of hiring a Business Development Representative (BDR) for your company.?

The analysis will focus on the performance of BDRs in terms of the number of meetings they book, and how many of those meetings are qualified and closed, as well as the associated revenue generated.?

We will assume that the company sells a software product for $25k annually.

**NOTE: this only takes into account a fully ramped BDR (which can take 3+ months) and with an active pipeline MoM meaning that there's no sales cycle delays.

BDR Performance:

Based on industry standards, we can estimate the number of meetings that a top-performing BDR, a mid-performing BDR, and a poor-performing BDR can book per month.?

1. A top-performing BDR will book 20 meetings per month,?
2. A mid-performing BDR will book 70% of that, or 14 meetings per month.?
3. A poor-performing BDR will book 30% of that, or 6 meetings per month.

Revenue and Cost Analysis:

Assuming that 70% of meetings are qualified and that only 10% of qualified meetings result in a sale, we can calculate the revenue generated from each BDR.

1. A top-performing BDR will generate 20 * 0.7 * 0.1 * $25k = $35k per month.
2. A mid-performing BDR will generate 14 * 0.7 * 0.1 * $25k = $24.5k per month.
3. A poor-performing BDR will generate 6 * 0.7 * 0.1 * $25k = $10.5k per month.

Based on the above figures, we can calculate the cost-effectiveness of hiring a BDR who costs $100k per year.

1. A top-performing BDR generates $420k per year and costs $100k in overhead, resulting in a profit of $320k per year.
2. A mid-performing BDR generates $294k per year and costs $100k in overhead, resulting in a profit of $194k per year.
3. A poor-performing BDR generates $126k per year and costs $100k in overhead, resulting in a profit of $26k per year.

Weighted Average Analysis:

To determine the most common scenario for businesses, we will use a weighted average approach, with the most emphasis on mid-performance and the rest split between a poor performer and top performer. We will use a ratio of 60:20:20 for mid-performing, top-performing, and poor-performing BDRs, respectively.

1. Weighted average profit per year = (0.6 * $194k) + (0.2 * $320k) + (0.2 * $26k) = $154.4k

Conclusion:

Based on the analysis above, every time you hire a BDR, you are most likely going to end up with a profit of $154.4k. Otherwise, 1.5x ROI.

And if you’re looking for massive growth, this is not nearly enough. Which leaves you with two options:

1. The traditional approach would be to hire more BDRs, which will be time-consuming and challenging to operate. Plus, this approach carries a significant amount of risk since your overhead costs are increasing dramatically every hire.
2. Another option is to focus on hiring top performers to increase your ROI. However, this is nearly impossible to achieve without the right systems, advisors, and processes in place. This is where BizDev Labs comes in.

At BizDev Labs, we specialize in helping startups 2x or 3x their ROI from outbound, ensuring fewer team members to achieve the same results and that when you hire, they’re way more likely to become top performers.?

Our expertise covers all aspects of business development, including:

1. Implementing proven systems that streamline and optimize your outbound efforts.
2. Connecting you with experienced advisors who can provide valuable insights and guidance.
3. Establishing efficient processes that minimize headaches, operations, and bandwidth issues.
4. Experimenting and finding innovative approaches to achieve more with less

By partnering with BizDev Labs, you can scale your startup with ease and focus on what truly matters: innovation and growth. Say goodbye to the stress of managing a large team of BDRs and the risk of underperformance.

Don't let the limitations of traditional BDR hiring methods hold back your startup's potential. Ready to take your startup to new heights?