Why SDR Teams Die: Top Reasons & How To Revive Them

In the last few years, more companies than ever have decided to eliminate their SDR teams.

While it’s always tragic when it happens, there's an underlying reason for everything in business.

Knowing the “why” of this failure is a deep fascination of mine, since I know how powerful a well run SDR team can be. When it’s done right, the SDR model can be a big contributor to your pipeline efforts and take large amounts of pressure off your AEs and marketing. But when done wrong, it’s a cash (and reputation) burning machine.

From speaking with revenue leaders across the software industry, there are 3 common points of failure that I’ve identified: ?

1. Bad Unit Economics
2. Lack Of True Customer Understanding
3. Hiring The Wrong People

In this article, we’ll go in-depth into each failure point, discuss why it matters, and lay out a detailed plan on how to turn the tide.

Disclaimer

We’ve talked about this before and this goes without saying, but you have to have the foundations of a healthy GTM motion before SDR can truly work for you. I have never seen the SDR model work before these three markers were checked off:

Product Market Fit

Your product is well-aligned with the needs of your target customer, validated through paying users, market demand, and a stable / increasing ACV. You solve real problems for your customers and have a clear place in the market.

Message Market Fit

Your message resonates, and prospects are willing to engage and enter your sales funnel.

Successfully Sold Beyond Founder-Led Sales

You’ve scaled your sales process beyond founder-led sales, with at least two AE consistently hitting quota. This shows that your sales process is replicable and not solely dependent on the founder's unique skills or relationships.

Point Of Failure #1: Bad Unit Economics

What it means: Your ACV, sourced revenue per SDR, and total SDR program cost were out of sync.?

Why It’s Important: You can’t run an unprofitable SDR team. Sales development orgs have hemorrhaged money over the last 2 years, leading to record layoffs.?

This can only be fixed in one of two ways:

Decrease SDR OTE & SDR Program Cost

The quickest and easiest way to tilt the unit economic scale in your favor is lower the OTE (On-Target-Earnings) of your SDR team.

If you’re paying well above market and there’s a clear imbalance between pay and results, this can work.. minimally.

Here are the downsides of this approach:

• The news of lower pay isn't going to sit well with your current SDR team, no matter how beneficial it’ll be to the business. Expect some to start looking elsewhere.
• Having a lower (specifically lower than market average) OTE makes it harder to recruit new, top tier talent.
• Less pay means lower incentive to outperform. Many salespeople are money motivated!

The other, and more favored method is to increase SDR sourced revenue. Here's are the top metrics to drive more bookings and ultimately improve SDR sourced revenue.

Increase Connect Rate

• Time Zone Ranking: Rank the time zones you call for each hour of the business day. See an example here.
• Phone Deliverability / Spam Testing: Call your personal phone from the number you use for cold calling to ensure that your phone number isn’t showing up as “spam likely”
• Phone Validation Services: There are great platforms on the market today, like Phone Ready Leads, that validate phone data and identify the numbers with the highest likelihood to answer.

Increate Connect to Conversation Rate

We define a "conversation" as a call with a duration 3 minutes or more.

• Nail The First 30 Seconds: Deliver a short, concise & impactful message in the first 30 seconds that gets your prospect’s attention and resonates with their pain points.
• Ask The Right Questions: Ask open ended, thought provoking questions that gets your prospect thinking and opening up about their challenges (which extends the conversation).
• Social Proof: Share stories about how you’ve helped other companies achieve similar results (even better if it's a company the prospect knows and trusts).
• Presence & Authority: Speak with presence and a sense of authority. Use language, tonality, and wording that projects power and confidence.
• Human Touch: Most importantly, don’t forget to be human. If you sound robotic or like a scammer, you’ll get hung up on and won’t have the opportunity to do any of the actions listed above.

Increase Conversation To Meeting Rate

• Nailing The 30 Second Pitch: After the intro, share a 30 second, compelling message of what you do, why it matters, and the results you can deliver. End with an open-ended question to understand how your prospect could benefit from a similar solution.
• Recommend, Don’t Ask: Recommend a meeting with your account executive as the next step, based on the pain you’ve gathered on the call.

Improve Email Deliverability

• Proper Inbox Setup: Half the battle of cold email today is reaching the prospect’s inbox, so technical setup of your mailboxes and having a strategy is critical.

Increase Open Rate

• Improve Your Subject Line: Write a short, non-salesly, “internal looking” subject line that gets the prospect to open your email.
• Improving The First Line In Your Email: Along with the subject line, the prospect will also be able to see the “preview text”, or the first line within the email before opening it, make sure it’s relevant and attention grabbing.

Increase Reply Rate

• Address Pain: Highlight a real challenge likely faced by your persona, based on your research and knowledge of the customer profile.
• Easy CTA: End your emails with an easy to reply to, interest based call-to-action.
• Personalization & Relevance: Personalize your message with relevant details about the company and persona.

Here are a few examples:

• Headcount Growth
• Persona Role & Responsibilities
• New Product
• New Executive
• Internal Promotion
• Industry Shifts + Trends

Increase Reply To Meeting Rate (Hot Reply)

• Timing: You can do everything right listed above and not book a meeting.. and the reason for it is often timing. Most of your prospects aren’t currently in the market looking for you.
• Even if you have a great product and messaging, the prospect might not want to meet if it’s not a priority right now.

Improve the following metrics to improve the quantity of completed meetings and SDR sourced revenue.

Increase Show Rate

• 48 Hour Rule: Whenever possible, set up the meeting within 48 hours of the cold call.
• Uncover Real Pain: Your prospect will only show up to the appointment if they believe the problem you’re solving is worth their time. This can only be done by uncovering real, action provoking pain.
• Recap Email w/ Video: Send an email recap of the call, along with a short video on what to expect during the meeting.
• Text Reminders: Send a text reminder 24 hours, and one hour before the start of the meeting.
• Include Multiple People: Having multiple people on the call.

Increase Close Rate

• Target Higher: Target companies with a higher employee size and/or annual revenue amount.
• Qualify Upsell and Expansion Opportunities: Ask questions during the cold call that uncover additional product opportunities and more potential seats (for ex. An adjacent department or sister company).

Point Of Failure #2: Lack Of Customer Understanding

What it means: You weren’t in tune with the true needs / pains of your target customer. You can sometimes get away with this on inbound leads, but not with outbound due to the thin margin of error.?

Why this is important: If you’re not in tune with what the customer wants, your message won’t resonate and you’ll start to see a significant drop in all of your conversion rates.

Below, we’ve listed everything your SDRs need to know about your ICP (Ideal Customer Profile)

Firmographic Profile

Firmographics are the basic details about a company that help you understand if they fit your target market. This includes things like industry, company size, location, and revenue.

Top Challenges They Face

These are the pain points and problems that your product can solve. By knowing what keeps your prospects up at night, you can position your solution as the answer to their problems. This makes your message more compelling and relevant.

Top Personas Within Your ICP

Knowing the top personas within your target companies means understanding the key decision-makers and influencers. These could be roles like the CFO, Head of Sales, or IT Director. It's also important to know if they are "above the line" (executive level personas who can make decisions) or "below the line" (managerial or operational level who cannot make decisions). This distinction helps to address their specific pains at different authority levels.

Technographic Profile

Technographics refer to the technology stack that your target companies are using. This includes the software, hardware, and other tech tools they rely on. Understanding their tech environment can help you highlight how your solution integrates with or enhances their existing systems.

Psychographic Profile

Psychographics are about understanding the attitudes, interests, and values of your target customers. This is more about their mindset and how they approach business problems. Knowing this helps you craft messages that resonate on a deeper level, aligning your solution with their broader goals and values.

Point Of Failure #3: Hiring The Wrong People

What it means: You didn’t have the right leader and/or individual contributors in place to win. Many times it’s not the person, but how well they fit your company and the stage of your SDR program.?

To illustrate how to solve this and why it’s important, here’s an excerpt from our guide: “How To Source & Hire Elite SDRs”.

Choosing The Right Persona

A common mistake made by companies building the SDR function is hiring the wrong persona, or failing to identify the SDR persona that will fit their unique situation.

Many popular voices in the SDR consulting world recommend hiring young, inexperienced candidates with little job experience and business acumen. While this may work for some, it typically leads to high turnover for companies without a mature, repeatable SDR motion.

We’ve found that there are three types of SDRs on the market, and who you’ll need to hire today is highly dependent on the stage of your SDR program.

SDR Persona 1: “The Trailblazer”

The Trailblazer is experienced, has an entrepreneurial spirit and a high tolerance for risk..hire them at the onset of building your SDR team. In addition to their core job, have your Trailblazers work alongside sales leadership to build the SDR role foundations + baseline playbook.

SDR Persona 2 ”The Enhancer”?

The Enhancer is process oriented and enjoys taking the unorganized and making it “scale-ready”. Once you have a solid SDR foundation, hire Enhancers to make it repeatable through trial & error, testing and documentation.

SDR Persona 3 ”The Executor”

The Executor’s job is to follow a proven, repeatable SDR process. Only hire them once you’re REALLY established. As long as they’re coachable and provided with great initial onboarding, they won’t need prior experience to be successful at your company.

Intrinsic Qualities?

No matter the stage of your SDR program, the intrinsic qualities don’t really change. Here are the top ones we look for based on observing hundreds of successful (and non successful) SDR hires:

1. Hungry with a strong “Why”
2. Has a hunter’s mentality
3. Coachable
4. Independent
5. Analytical
6. Resilient?
7. Empathetic
8. Curious
9. Adaptable
10. Organized

For companies with newer SDR programs looking to hire “Trailblazers”, you may want to overemphasize on the following intrinsic qualities:

1. Entrepreneurial
2. Creative
3. Ability to handle high pressure

Conclusion

Conclusion

Thanks for making it all the way until the end, hope you enjoyed the read!

Looking for more sales development insights tailored for leaders? Follow me on LinkedIn or check out my SDR Model Success Blog.