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Who gets hired first when things turn around, SDRs or AEs?

Sales teams have been bloated for quite some time. I've been saying for years that you only hire another AE when the current AE's cannot handle more meetings, period.

So this means, as we see the economy turn back on, I believe SDRs will be hired first.

1) Less expensive
2) Can hire 2 for 1 in many cases
3) They are hungrier than AEs meaning they will scratch and claw to prove themselves.

What do you think?

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    • Profile picture of Sarah Drake
      @sarah
      ( 690 POINTS )
      1 month, 3 weeks ago

      I agree with you Richard. Depending on the industry, it could take a while before companies see the types of Sales pipelines that they are used to. In saying this, I think a company’s best bet is to hire SDR’s who will not only scratch and claw to prove themselves like you mentioned, but will also begin forming relationships with prospects even if they aren’t ready to buy just yet. They can be the ones working their tail off (along with marketing) to keep your company top of mind for when the market is ready to buy again.

      • Profile picture of Colin Campbell
        @colin-campbell
        ( 2.1k POINTS )
        1 month, 3 weeks ago

        “Depending on the industry” – big yes to that, but probably stage of growth, too, right, @sarahdrake?

        • Profile picture of Sarah Drake
          @sarah
          ( 690 POINTS )
          1 month, 3 weeks ago

          Great point. Are we talking about a startup or an enterprise company? There are so many factors that come into play when growing sales teams once things go back to normal.

    • Profile picture of Colin Campbell
      @colin-campbell
      ( 2.1k POINTS )
      1 month, 3 weeks ago

      Ooh, that’s a great question.

      Speculating (obviously), but my guess would be it depends heavily on stage. For teams that have had to pare way back, I’d expect them to hire AEs first, and ask them to do their own prospecting.

      Not saying that’s right, but I bet lots of sales leaders will think to themselves “I need revenue – that means closers.”

    • Profile picture of Richard Harris
      @rharris415
      ( 1.6k POINTS )
      1 month, 3 weeks ago

      @colin-campbell, if this is what they are doing, I’d expect them to hire AEs first, and ask them to do their own prospecting. , then they fired the wrong people.

      Hiring AEs asking them to prospect is the most insulting thing I hear in sales time and time again.

      It’s insulting to the hard work SDRs do, it’s insulting to the AE as they is not their strength, and it’s insulting to oneself for not learning how to evolve.

      If you are a sales leader reading this and making this decision, “you’re fired!” #BlameRichard

    • Profile picture of Max Altschuler
      @max-altschuler
      ( 4.2k POINTS )
      1 month, 3 weeks ago

      Great topic! Need pipeline so I think SDRs. Also, think there will be more SDRs let go now, so AEs will still be there when things come back and they’ll have the capacity to take on more.

      • Profile picture of marygreencny
        @marygreencny
        ( 2k POINTS )
        1 month, 3 weeks ago

        Do you mean additional layoffs or these people have just recently been let go? Wondering if you foresee more layoffs.

        • Profile picture of Richard Harris
          @rharris415
          ( 1.6k POINTS )
          1 month, 3 weeks ago

          More cuts are coming. They will happen around 15th of month and first of the month through June imo.

          Agree, more SDRs will be let go, but I think that’s short-sighted. This is really dependant on pipeline movement. If an AE has a pipeline that cannot or will not move, then sadly I am not sure of the value unless they are great at prospecting.

          I would hope that before companies lay anyone off they look for other parts of the organization that can use help. Customer Success really comes to mind in my opinion. Protecting revenue is more valuable now than ever.

          So my opinion is you don’t keep the AEs right now unless there is the business to close.

          It’s a tough discussion to have so I hope folks know I am not without concern or empathy. People need jobs, have families, rent, mortgage, etc. So don’t just do this stuff because Richard said so.

    • Profile picture of Graeme Gilovitz
      @aussieg
      ( 1.5k POINTS )
      1 month, 3 weeks ago

      I agree that I would first bring in an SDR Over the AE.

      But I don’t know if SDRs are less expensive. My team are not that cheap (half are very experienced and the other half more junior) and they get bonuses on SALs whilst the AE might get a slightly higher salary their bonuses come way down the line on deals closed. Upfront some SDRs could cost you more.

      BUT having said that, SDRs can drive your funnel like no one else. Marketing can bring inbounds but that can be fickle whilst outbound is something more controllable.

      And let’s be honest, how many AEs actually like to prospect.

      I would much prefer to have an extra SDR any day of the week over an AE right now. in fact I need about 3 of them!

      • Profile picture of Richard Harris
        @rharris415
        ( 1.6k POINTS )
        1 month, 3 weeks ago

        Upfront how do SDRs cost more? Even from a first 90 days they cost less, and to your point they “produce” more in 90 days than an AE typically does other than in a more transactional environment.

        Hopefully you can find some quality SDRs. I know Salesloft had to restructure and some highly trained folks are looking for new gigs.

        • Profile picture of Graeme Gilovitz
          @aussieg
          ( 1.5k POINTS )
          1 month, 3 weeks ago

          Hey @rharris415 – you may have misunderstood me.
          An SDR gets the salary plus we pay bonuses on meetings attended – the good ones can set high volume of quality meetings which you need to pay for relatively up front in the process whilst on the other hand an AE will get the salary and bonuses after deal closure (which in our case could be 3 to 9 months down the line).

          Thanks for the heads up on new hires! Got any recommendations?

          • Profile picture of Richard Harris
            @rharris415
            ( 1.6k POINTS )
            1 month, 3 weeks ago

            Thanks for the clarification. Here are some additional thoughts.

            The measurement of revenue a company receives should not be based on the first year ARR, but on the LTV.

            If you’re in Saas and you don’t have a 3 year LTV, then that’s a problem.

            So when one does the math over the LTV, the “high up front costs” are minimal at best. Especially when ” the good ones can set high volume of quality meetings”

            CFO’s don’t like it when I draw this distinction, but then I also remind them then how come our valuation at $10m ARR is $100m. How do you balance and justify a 10x multiple on $10m to get $100m valuation, but then treat sales and SDRs as some high upfront cost expenditure?

            When they go quiet, that’s when I know I “took a piece of their soul”. 🙂

    • Profile picture of Macky Bradley
      @mackybradley
      ( 3.9k POINTS )
      1 month, 3 weeks ago

      I was on a webinar today listening to you @rharris415 (RingDNA)

      I think you are spot on as usual, SDR’s will be back first. 2-3 months before everyone else.

      Will the SDR’s be back in the office? or Remote.

      Can you imagine having to train a whole class of SDR’s when you return.

      Then trying to train them remotely. Wow.

      The struggle will be real!

      Cheers!

      Macky

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