The Latest from the ABM Experts
June 15, 2018
The Science of Sales: An Ideal Number of Accounts for an SDR to Manage
Category: FlipMyFunnel Post
Understanding the optimal number of accounts and contacts an average SDR can handle per month is extremely important when deploying an Account-Based Sales and Marketing strategy. First, we’ll discuss the framework for determining the capacity of an SDR and then address why this subject is important and how to use this information to accelerate sales and marketing alignment.
Calculating SDR Capacity
First, let’s start with some basic assumptions. You might need to modify these benchmark assumptions based on your SDR team, target market, etc., but this should give you a good starting point.
- Activity: 80 touches per day (phone/email/social)
- Cadence: 8 touches over 2 weeks per prospect
- Coverage: 5 contacts per account
Based on these assumptions, an SDR:
- Has 1,600 touches in a month (80 touches per day X 20 days per month)
- Can cadence 200 contacts every 2 weeks (1,600 touches / 8 touches per cadence) and 400 contacts every month (200 contacts X 2 cadence cycles per month)
- Can manage 80 accounts per month (400 contacts / 5 contacts per account)
Is 80 accounts per month enough for an SDR to hit quota?
Let’s do some quick math to understand this question. If marketing is tightly aligned with sales, you can expect an account-to-meeting conversion rate of between 10-20%. This means, based on working 80 accounts, an SDR will book 8-16 meetings per month, which is typically inline with SDR quotas depending on average contract value (ACV).
Also, keep in mind that 80 accounts per month is a conservative benchmark. There will be some accounts that are qualified in/out without a full 8 touch cadence on all 5 contacts. Another factor depends on if the SDR is inbound, outbound, or a mix of both. If a large percentage of the outreach is following up on inbound leads, then you can expect SDRs to qualify accounts in/out at a higher rate than pure 100% outbound.
Can I extrapolate and assume an SDR needs 960 accounts per year (80 accounts X 12 months)?
No. A well-orchestrated SDR team will re-engage the same accounts every 3-4 months. As we know, businesses evolve, priorities change, and people move around, so it is imperative to revisit top accounts even if they previously were not ready to engage.
This means an SDR might need about 500 accounts per year. The calculation I used was 80 accounts cycled through every 4 months (320 accounts) plus an added buffer for accounts that are qualified into a sales cycle or completely qualified out that won’t be recycled.
Why is this important?
#1. Capacity Planning
Understanding the number of accounts and contacts required per SDR drives the strategy across the organization. Marketing will use these numbers to ensure they are driving the right ratio of Marketing Qualified Leads (MQLs) and Marketing Qualified Accounts (MQAs). Sales and marketing operations will need to ensure the database supports the demand of the SDR team, regarding having the right number of accounts that match the Ideal Customer Profile (ICP) and the appropriate amount of contacts within the buying committee. Finally, this will drive the size of the SDR team based on pipeline and revenue goals for the organization.
#2. Account Orchestration
Sales and marketing alignment is critical to the success of an account-based strategy. Properly orchestrating the top accounts enables marketing to warm-up accounts before SDR engagement, while providing air-cover during outreach. The end result is more quality conversations and a higher conversion rate for the SDR team.
It is easy for SDR teams to drift and lose focus. Without this type of focus on accounts, SDR teams typically rely on a spray-and-pray strategy, which results in poor customer experience and lackluster results. Pointing SDRs at the buying committees within the best accounts (fit + intent) keeps the team on track and ensures the accounts that will maximize revenue get the attention they deserve.
#4. Properly Cadence Contacts and Accounts
If an SDR adds too many contacts to their cadence at one time, they will not be able to complete their next touch on time and the period between touches will quickly become 7… 10… 15 days. In this scenario an SDR will not be able to build any momentum with the prospect and the effectiveness of the cadence will be lost.
The same is true if an SDR adds too many accounts to their cadence. In this case, the number of contacts per account will drop down to 2 or 1, and the SDR will not be able to build any momentum within the account.
Take the Next Step
If you are not already looking at the data in this way, I recommend you do some analysis across your team. For each member of the SDR team, start to track the number of contacts and accounts they are working on a weekly, monthly, and quarterly basis as well as their account-to-meeting conversion rate. Then start to formulate a strategy with marketing on how best to work together within your top accounts.