One of the most commonly debated questions in ABM is “who should the SDR team report to?”
The sales development team (at Engagio, we call it Account Development, and thus we have ADRs) can report to Sales, to Marketing or operate independently as its own department.
TOPO found that 64% of sales development teams report into sales. But the top-performing SDR teams in their sample perform more or less the same when reporting to marketing vs. reporting to sales.
However, Todd Berkowitz fearlessly predicted that the majority of Sales Development teams will soon report to Marketing. He followed that up with a post that explained his rationale. He articulated, “I don’t have specific survey data to support this, but my conversations with both clients and other tech vendors seem to clearly highlight two things. More tech companies are using in-house SDRs for outbound prospecting and more of those teams are reporting into marketing.”
That is generally the consensus. CloudKettle argues, “With over a decade of experience working with SaaS companies and having built a few lead generation teams ourselves, we advocate three main reasons SDRs report to Marketing and not Sales. 1) SDRs need to be coached and mentored – a lot. 2) SDRs tend to look up to Sales team members. 3) Passing qualified leads to Sales is Marketing’s job.”
RingDNA offers their perspective and explains that there’s a paradigm shift: “The Old Paradigm– Marketers generate leads, closing is Sales’ problem.’ The New Paradigm– Marketers are closely monitoring lead quality, helping reps qualify leads, and doing everything in their power to maximize the ROI of their efforts.”
The Bridge Group found that inbound-focused groups are 2.1X more likely to report to Marketing.
The truth is, any of these scenarios can work well, as long as it’s run by a dedicated leader who understands the discipline and its role in the Account Based Marketing ecosystem.
Let’s look at the data.
That said, we’ve seen some development teams move into Marketing, which is arguably the home for ABM:
- Marketing and SD are both focused on creating pipeline, while Sales is focused on closing it
- Marketing and SD both need a longer-term mindset, in which opportunities are nurtured
- The concept of Account Based Everything requires orchestrating ABM and ABSD activities into coordinate Plays
“The Marketing and Sales Development motions are really similar – and the messages must be highly synchronized, so the natural home for Sales Development may be Marketing.”
– Matt Amundson Vice President of Marketing, EverString
It’s still most common for SDR teams to report into Sales.
This is likely because sales development often serve as a “farm team” for Sales, and so it makes sense that Sales does the hiring and management. Also, the more the SDR team focuses on outbound prospecting, the more likely it is to report to Sales – since the prospecting skills are closer to the core sales skillset.
Gabe Larson from InsideSales.com weighs the pros and cons of each in this LinkedIn post, and advises to answer certain questions when deciding where your account development team belongs.
- What portion of my prospecting is inbound vs. outbound?
- What do I want the career path of my qualifier role to be?
- Do I have a leader who really “gets” data-driven sales and who wants this function?
- Do I have systems, people, and processes to manage “hand-offs”?
- How much self-sourcing does the inside sales or sales closer team do?
Our advice is that the development team can live in either Sales or Marketing, but what matters is:
(a) Sales is responsible for hiring and training
(b) Marketing is responsible for coordinating activities and Plays
Do you need specialized teams within your SDR department?
Some SDR departments chose to split up into even more specialized teams for example:
- By industry
- By region
- By account size
We’ve seen SD leaders who swear by this – after all, specialization into Sales and SDR made sense, as did further specialization into inbound and outbound Sales Development, so why go further?
The more you speak to the same audience, the better, the argument goes.
“I like specialization. Every time I break out a team to focus on a market size or a vertical, I see big uplift. It lets us optimize what works.”
– Chad Burmeister
But we’ve also seen those who warn against it.
They feel that over-specialization decreases management flexibility: if you lose a mid-market healthcare SDR you’re left with a very specific gap to fill.
Similarly, a specialized DR may find it harder to move up into a sales role in a different niche Of course, the bigger your team is, the less likely these concerns are to happen.
The rule of thumb might be to dedicate a portion of your team to a specific market only if that market represents a significant segment that’s large and important to your business.
When TOPO works with clients to determine which organization the SDR team should live under, they evaluate two primary factors: strategic execution of the sales development function and professional development of SDRs. When it comes to strategic execution, they consider things like, go-to-market strategy, qualification strategy, process and SLAs, lead management and change management. When it comes to the professional development of SDRs, they consider things like dedicated management, coaching and mentoring, peer mentoring, growth path, and resources for learning.
Or, are we overcomplicating it? I’ll close with this advice from Trish Bertuzzi: “Here is the advice we share with our clients. Have the group report to the person/function that has the bandwidth, expertise and passion to lead them. That more than anything else will determine success or failure.”