SDR vs BDR  – Who Should You Hire for Your Growing SaaS?

Chaos is a ladder. Especially in SaaS. Not only while building the product, or hitting the opportunity to step up. However, even when hiring a team and finding the perfect fit for sales reps and business development reps, few deals seem out of reach.

While looking for the right person as SDR and BDR can be turmoil, moving strategically can help a bit!

Even though we’re watching a lot of industry giants like Google, Amazon, and Cisco are actively seeking SDR hires in Latin America

At FirstPrinciples Growth, we hold multiple SaaS products in-house, and having worked closely with the sales team we’ve seen how sometimes businesses miss out on reaching their full potential.

Maybe it’s because you’re not quite nailing down the right talent for the right tasks, or perhaps you’re not giving your team the tasks that let them stand out.

We get it. It happens.

But here’s the thing: we’ve got the know-how to help you avoid those pitfalls and unleash the full power of your team.

In this blog, we’ll talk about all the nitty-gritty, big, and small things to be kept in mind while hiring an SDR and BDR. Also, we’ll emphasize more on how SDR is different from BDR.

Let’s dig into the basics first.

What is a Sales Development Representative (SDR)?

SDRs are the initial connection point for potential customers who’ve already shown some interest. Interest like:

• Maybe they downloaded a case study or
• Registered for a free trial.
• Responded to a marketing campaign
• Engaged with your brand in multiple ways

The SDR takes the bait from there, nurturing these “warm leads” by understanding their specific business needs.

Their main goal?

To find and qualify leads, laying the groundwork for your sales team to score touchdowns in closing deals.

Through conversations and qualification processes, they determine if these prospects are truly a match for what you offer. If there’s a strong fit, the SDR acts as a bridge, connecting the potential customer with the closers on your sales team – the Account Executives – to move forward with a sales discussion.

Essentially, SDRs act as lead specialists, meticulously qualifying prospects to ensure only the most promising opportunities reach your sales team for conversion.

Benefits of Hiring an SDR

Having a strong sales pipeline is like having a full gas tank for your car – it fuels your growth. But how do you ensure a steady stream of high-quality leads, the kind that converts into happy customers?

That’s where SDRs (Sales Development Representatives) come in, offering a multitude of benefits for your SaaS business:

• Qualified Leads, Faster Sales Cycles: SDRs act as lead generation filters. They identify potential customers who’ve already shown some interest and then assess their fit for your product. This means your Account Executives (AEs), the closers on your sales team, only spend time on qualified leads with a higher conversion probability, ultimately accelerating your sales cycle.
• Increased Lead Flow and Market Reach: A dedicated SDR team actively seeks out potential customers through various channels. This expands your market reach beyond those who passively discover your brand, ensuring a consistent flow of fresh leads for your sales engine.
• Improved Sales Team Efficiency and Focus: By qualifying leads upfront, SDRs free up your AEs’ valuable time. Instead of sifting through unqualified prospects, your AEs can focus on nurturing high-potential leads and closing deals, maximizing their productivity and sales impact.
• Enhanced Customer Acquisition and Revenue Growth: A well-oiled SDR machine translates to a pipeline brimming with qualified leads. This directly translates to a higher customer acquisition rate and, ultimately, increased revenue for your B2B SaaS business.
• Valuable Customer Insights: SDRs interact with potential customers on the front lines, gathering valuable insights into their needs, challenges, and buying preferences. This intel can be used to refine your marketing strategy, product development, and overall customer experience.

Investing in SDRs can be a game-changer for your B2B SaaS sales strategy. They ensure a steady stream of qualified leads, free up your AEs’ time for closing deals, and ultimately drive growth and revenue.

⭐ Bonus: If you’re somebody looking to enroll for a BDR role, or as a SaaS company looking for solid training. Get @Kellen_the_man course to get an entry SDR/BDR job

What is a Business Development Representative?

BDR, Business Development Representative is a lead prospector, always on the lookout for new companies that could be a perfect fit for your product. They don’t wait for customers to come knocking – they reach out directly through

• Cold calls,
• Targeted emails, and
• Even social media engagement.

Their goal?

To spark interest, build relationships, and identify potential customers who might not be familiar with your brand but could benefit from what you offer.

If they find a promising lead, they’ll nurture it further and eventually hand it over to your sales team to close the deal.

BDRs are the lead generation engine that keeps your sales funnel flowing with fresh opportunities.

Benefits of Hiring a BDR

• Fresh Leads, Wider Reach: Let’s face it, waiting for customers to find you can be a slow game. BDRs are proactive lead generators, actively reaching out to new companies through targeted outreach. This expands your market reach beyond those who passively discover your brand, ensuring a constant flow of fresh leads for your sales pipeline.
• Uncover Hidden Gems: BDRs are like prospect detectives. They use their research and outreach skills to identify companies that might be a perfect fit for your product, even if they haven’t heard of you yet. This opens doors to untapped markets and potential customers you might have otherwise missed.
• Boosted Brand Awareness: Every BDR interaction is a chance to spread the word about your B2B SaaS product. Through consistent outreach, BDRs raise brand awareness in the marketplace, making your company a top-of-mind choice for potential customers when they’re ready to buy.

Who Should You Hire for Your SaaS Product? SDR or BDR?

When it comes to choosing who to hire for your SaaS product – an SDR, or BDR – it depends on where you are in your sales journey and what your specific goals are.

SDRs aren’t solely responsible for filling your pipeline with leads; their primary role is to qualify the leads that come through. SDRs take those warm leads and assess if they’re a good fit for your product. They’re lead qualifiers, ensuring only the hottest prospects reach your closers (Account Executives).

They’re the ones who excel at prospecting, outreach, and qualifying leads, laying the groundwork for your sales team to swoop in and close deals.

Now, if you’re more focused on nurturing existing leads and driving conversions, you might lean towards hiring an ISR, or Inside Sales Representative. They’re like your sales superheroes, skilled at building relationships and guiding leads through the buying process.

And then there’s the BDR, or Business Development Representative, who bridges the gap between marketing and sales by generating and qualifying leads.

Here’s a handy decision tree to make your choice even easier:

• Do you have a steady flow of inbound leads?
  Yes: An SDR can qualify and nurture those leads.
  No: Move to question 2.

• Do you need to expand your customer base and reach new markets?
  Yes: A BDR can generate fresh leads for your sales team.
  No: Move to question 3.
  
• Do you have a smaller sales team or a shorter sales cycle with smaller deals?
  Yes: An ISR might be a good fit with their versatility in lead management and potential deal closing.
  No: Consider a dedicated SDR or BDR depending on your specific lead flow needs.

It all boils down to your specific needs and where you need the most support in your sales journey.

What are the Best Channels/Platforms to Hire Good SDRs/ISRs/BDRs?

Finding the right talent to fill your SDR, BDR, or ISR roles is crucial for a thriving B2B SaaS sales engine.

Here’s a roadmap to explore the best channels and platforms to hire these key players:

Leveraging Online Job Boards

• General Job Boards: Established platforms like LinkedIn, Indeed, or Glassdoor still hold value. Utilize their advanced search filters to target candidates with relevant experience and skills for SDR, BDR, or ISR roles.

• Inclusively Remote: This platform is for hiring for remote jobs. Create detailed job descriptions for your BDR and SDR roles, highlighting the required skills, experience, and exciting opportunities within your company.

Industry-Specific Platforms: Target job boards frequented by B2B SaaS professionals. Look for platforms like:

• Spheredigital
• GTMnow
• Repvue
• The Muse

which cater to the sales industry and often have dedicated sections for SDR, BDR, and ISR positions.

Professional Networking Sites:

• LinkedIn: LinkedIn is a goldmine for B2B SaaS recruitment. Search for profiles with keywords like “Sales Development Representative,” “Business Development Representative,” or “Inside Sales Representative” and filter by experience and skills. You can also join relevant SaaS or sales-focused groups to connect with potential candidates and showcase your open positions.

• Twitter: Use keywords like Hiring for BDR roles in SaaS, and you’ll find multiple opportunities. Select the latest filter and reach out via DM or email.

Employee Referral Programs:

• Incentivize Your Team: Your existing employees are a great source of referrals! Offer incentives for recommending qualified candidates for SDR, BDR, or ISR roles. They’ll likely have a good understanding of your company culture and can recommend individuals who would be a good fit.

Recruitment Agencies:

• Specialized Recruiters: Consider partnering with recruitment agencies specializing in B2B SaaS sales positions. These agencies have a network of pre-vetted candidates and understand the specific skills and experience required for SDR, BDR, and ISR roles.

Higher Education Institutions:

• University Career Centers: If you’re looking for entry-level SDRs or BDRs, connect with career centers at universities or colleges with strong business or sales programs. You can participate in career fairs or sponsor on-campus events to connect with talented graduates eager to break into the B2B SaaS sales world.

Optimizing Your Recruitment Strategy:

• Compelling Job Descriptions: Craft clear and concise job descriptions for SDR, BDR, and ISR roles. Highlight the responsibilities, required skills, and exciting opportunities within your B2B SaaS company. Use AI job description writer to save your time and write effective job description
• Showcase Your Company Culture: Let your company culture shine through in your job postings and communications with potential candidates. Emphasize the growth opportunities, work environment, and what makes your B2B SaaS company a great place to work for SDRs, BDRs, and ISRs.

By implementing this multi-pronged approach, you’ll cast a wider net and attract qualified candidates for your SDR, BDR, or ISR positions. Remember, hiring the right sales funnel specialists is an investment in your B2B SaaS company’s future growth and success.

What is the Market Rate Compensation for the Above Positions?

Recently, Calendly’s Chief Revenue Officer spoke on its LinkedIn channel about how she allocates its marketing budget to each of its leads, with goals they have to hit. Then it’s their team’s job to decide how they’re going to hit those goals, including which tools, tactics, resources, channels, etc., they’re going to invest in.

Compensation for SDRs, BDRs, and ISRs is a dynamic equation influenced by several factors.

Here’s a breakdown to understand the complexities:

• Company Budget: This is the foundation. Bootstrapped startups naturally have less wiggle room compared to well-funded companies.
• Company Stage & Growth: Early-stage companies might offer lower base salaries but compensate with higher commission structures or equity incentives for future growth.
• Location & Cost of Living: Compensation can vary significantly depending on the location. A high-cost-of-living city will likely require a higher salary compared to a more affordable location.

Market Rates: A Ballpark Figure

While there’s no one-size-fits-all answer, here’s a rough national average (USD) to provide a starting point:

• SDR: $50,000 – $75,000 total compensation (base salary + commission)
• BDR: $55,000 – $80,000 total compensation
• ISR: $60,000 – $90,000 total compensation

The actual compensation for an SDR, BDR, or ISR role can vary significantly depending on the factors mentioned above.

What are the KPIs to Evaluate the Performance of a BDR & SDR?

For BDR leaders drowning in data, identifying the key performance indicators (KPIs) that truly reflect a BDR’s contribution to revenue can be a challenge. Here’s an in-depth breakdown of the key performance indicators (KPIs)

KPI metrics for BDR

Activity Metrics:

• Number of Calls Dialed & Number of Emails Sent: These KPIs provide a basic understanding of an SDR/BDR’s outreach efforts. While a high number might suggest diligence, it doesn’t guarantee quality conversations or lead generation.
• Actionable Insights: Focus on the quality of interactions rather than just quantity. Monitor call recordings and analyze email content to ensure outreach is targeted and engaging.
• Number of Meetings Booked: This metric signifies an SDR/BDR’s ability to connect with potential customers, identify their needs, and generate genuine interest in your B2B SaaS offering. A consistent flow of booked meetings translates to a healthy pipeline for the sales team.

Lead Qualification Metrics:

• Lead Acceptance Rate (LAR): This metric reflects the effectiveness of the SDR/BDR’s qualification process. A high LAR (leads accepted by the sales team) indicates that the SDR/BDR is adept at identifying leads with a strong potential to convert into customers.

• Actionable Insights: Regularly analyze the reasons for low LARs. Are leads not qualified thoroughly enough, or do they not align with your ideal customer profile (ICP)? Refine your qualification criteria and train your SDR/BDRs to effectively assess lead fit.

• Average Deal Size: This KPI measures the typical value of sales opportunities generated by the SDR/BDR. A rising average deal size suggests the SDR/BDR is successfully targeting high-value leads, contributing to increased revenue potential.

• Sales Qualified Leads (SQLs): This is the ultimate output of an SDR/BDR’s efforts. The number of qualified leads passed on to the sales team reflects the effectiveness of the entire sales development process.

Engagement Metrics:

• Average Call Duration: Lengthier calls typically indicate productive conversations and a deeper understanding of the prospect’s needs. However, excessively long calls might suggest inefficient communication.

• Email Open Rate & Click-Through Rate: These metrics gauge the effectiveness of email outreach efforts. A low open rate might necessitate revising email subject lines or tailoring content for better relevance. Similarly, low click-through rates could signal a need for more compelling calls to action (CTAs) in emails.

• Meeting Attendance Rate: This KPI reflects the value prospects perceive in meetings booked by the SDR/BDR. A low attendance rate could indicate a mismatch between promised value and actual meeting content.

Conversion Metrics:

• Pipeline Contribution: This metric reflects the total potential revenue value of sales opportunities added to the pipeline by the SDR/BDR’s efforts. Tracking pipeline contribution helps assess the SDR/BDR’s role in driving future sales growth.

• Win Rate (for BDRs): If your BDRs are responsible for closing deals, track the win rate – the percentage of deals closed from qualified leads they generate. A consistently high win rate signifies effective qualification and deal-closing skills.

Expert Note

As a first-time sales manager in a SaaS company, look for an outbound program to supplement your heavy flow of low-quality inbound leads. If you’re generating leads averaging 1000 per day, but converting less than 1% to paying clients. You need to start planning to track:

1. dials per day/week (they’re using email as a crutch)
2. connects per call
3. demos set per week/month
4. % of demos accepted by AEs
5. monthly/quarterly close rate of opportunities
6. quarterly revenue per SDR

Final Thoughts: BDR vs SDR from Our SaaS Experience

In the world of B2B sales, two titles often get thrown around interchangeably: BDR (Business Development Representative) and SDR (Sales Development Representative).

While there can be some overlap in responsibilities, there are also key distinctions between the roles, especially in larger companies. Understanding the BDR/SDR dynamic is essential, particularly for AEs who rely on them to generate qualified leads.

In early-stage startups, these roles might be combined, but as companies scale, separate BDR and SDR functions become more common. Always ask clarifying questions during interviews to understand the specific BDR/SDR responsibilities within the company’s sales process.

Key Take Aways:

1. Both BDRs and SDRs are not responsible for closing deals; they prepare the groundwork for AEs (Account Executives) who take over at later stages of the sales cycle.
2. Company structures and role definitions can vary significantly. Titles and responsibilities might blend, so during interviews, it’s crucial to clarify BDR/SDR roles and the overall sales process within the organization.
3. Generally, in companies with both roles, BDRs are considered a step below SDRs. However, some companies might have different seniority levels within BDR and SDR titles (e.g., Jr. BDR vs. Enterprise SDR).
4. For Simple Sales Structure: BDR and AE only and for more Complex Structure: BDR -> SDR -> AE (each role progressively qualifies leads and moves them closer to closing).

Note: The average time for BDRs/SDRs to move to AE roles (usually SMB or Mid-Market) is 12-24 months. Top performers with prior sales experience or those who ramp up quickly can be promoted in as little as 6-12 months, especially in startups or smaller companies.