Traditionally, SDR teams report into sales organizations. Why? Because sales development often serves as a “farm team” for Sales. 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 skill set. But, they should be part of the marketing team. Here's why:
First, outbound prospecting via SDRs isn’t dramatically different from other demand generation activities though often more personalized. That said, thanks to Account Based Marketing (ABM), marketers are getting less reliant on mass e-mails and other broad-based marketing approaches. Yes, marketers don't make phone calls or send LinkedIn connection requests, but what fundamentally is the difference between an e-mail or advertising campaign run by Marketing vs. an e-mail and phone campaign run by an SDR? There might be a difference in scale, channels, and calls to action, but the endgame is the same. You are trying to generate demand from targeted companies for which you can ultimately drive meetings or demos.
Second, The metrics are also more closely aligned with the ones important to Marketing. Regardless of where they report, the SDR is handing off to the field at a point very early in the sales process. The SDR is not the one to determine whether it’s an opportunity, let alone carry it through to completion. From a demand generation perspective (whether in a traditional or ABM-centric world), CMOs are ultimately trying to drive a qualified prospect (or Marketing Qualified Leads) to engage with sales-people. That is the job of the SDR as well. The sales organization is primarily concerned with closing deals, and sales reps are compensated on their ability to do that. Like others in the marketing organization, the SDRs may have some of their variable compensation tied to pipeline revenue attainment for the company or a business unit, but often, they don’t carry a specific quota. When SDRs report into marketing, they're not focused on making a certain number of phone calls but rather, actually qualifying the incoming leads. For marketing to be effective, there needs to be a feedback process on the quality for the leads generated. The goal is to drive outcomes, not just hit volumes and as long as opportunities are created, demand generation leaders will not be placing much emphasis on activity volume when it comes to KPIs.
Third, and maybe most importantly, SDRs need a lot of ongoing training and enablement. You can send them through sales Bootcamp and have salespeople give them pointers around how to improve their prospecting techniques, but the bulk of the enablement is typically driven by product marketing. More often than not, these are junior professionals, not seasoned sales reps. They need to know the right messages, ways to overcome objections, and enough information about the product and the market to sound intelligent on the phone. Also, they need to know this on an ongoing basis. Many of these things aren’t really the domain of the sales organization, and even if they were, you could easily see situations where they are pushed to make more calls rather than get the proper amount of ongoing enablement.
I’m not suggesting that it can’t work to have the SDRs report to sales. I’ve seen plenty of situations where it works well, especially when there is a good relationship between the sales and marketing organizations. That said, if most of the SDRs efforts are focused on reaching out to inbound leads, they should be part of the team responsible for creating those leads and passing them on.
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