Sales Development Models, Metrics, and Compensation Research (2020)
The 2020 Sales Development Models, Metrics, and Compensation Research by The Bridge Group surveyed 406 executives from diverse B2B companies—mostly North American with a median revenue of $35M and median ASP of $55K—to analyze SDR roles, metrics, compensation, and growth strategies, introducing a nuanced definition of "high-growth" companies that considers both revenue size and growth rate to better align industry standards and guide strategic decisions.
Hello! And welcome to our eighth round of research Since 2007, we’ve been tracking the SDR role (ADRs, BDRs, MDRs, etc.) with a focus on how metrics and compensation change over time. For this round,406 participated. We’ve organized the
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We hope this report will provide guidance as you build out your strategy and/or think about changes to possibly bring you closer to alignment with industry standards. If you have any questions, please reach out to us directly. We want to hear from you. You can email us at: .
- 1.Notes on COVID-19 [email protected] SDR METRICS
The Bridge Group is an SDR, AE & AM consulting models that deliver scalable growth.
firm dedicated to understanding the
https://www.bridgegroupinc.com
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COMPANIES THAT
PARTICIPANTS
• 406 executives from a broad diversity of B2B companies • 91% with headquarters in North America • $35M median revenues • $55K median average selling price (ASP)
Respondents by revenues
<$5M 11% $5-19M 25% $20-49M 21% $50-99M 10% $100-249M 12% $250-499M 7% $500-999M 11% $1B+ 3%
Respondents by ASP
<$5K 2% $5-24K 18% $25-49K 24% $50-99K 21% $100-249K 24% $250K+ 11%
NEW THIS YEAR
Each time we’ve published this research, readers have asked how metrics, comp, quota, tech stack, and so on differ between the fastest growing companies and the rest.
But what exactly makes a company “high-growth”? If Company A grew from $2M to $6M, that additional $4M represents 200% growth. Compare that to Company B who went from $200M to $290M, that’s “only” 45% growth—but an additional $90M in revenue.
Clearly, raw growth rates don’t tell the whole story. We chose to factor in both revenues and growth rate. We marked the top quintile (highest 20%) per revenue band as High-Growth and the bottom quintile (lowest 20%) per revenue band as Laggard.
SDR METRICS
Growth rates by revenue band
PART 1
ORGANIZATIONAL
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Sales development We asked respondents, “which of the following best describes your Sales Development groups—those combining inbound qualification and outbound prospecting—are most common (especially at higher ASPs) teams (i.e., separate, dedicated inbound and outbound groups) follow
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Headcount mix of inbound & outbound For those respondents with specialized groups, we asked how headcount is
Where SDR Groups Report
Since 2012, we’ve found the vast majority of SDR teams reporting to Sales. This year the trend continues with 68% of groups sitting within the Sales organization.
It’s worth mentioning that roughly half of all inbound teams report to Marketing. This makes inbound groups 1.4 times as likely to report to Marketing as specialized, hybrid, or outbound groups.
68% of Sales Development groups report to Sales.
SDR METRICS
-only groups (66%). ly one-quarter of companies. This is most
to AEs/AE territories. This is most outbound -only groups (49%). 61% align SDRs to AE territories 49% route leads round-robin 66% align SDRs to AE territories
| ON AVERAGE | 61% align SDRs to AE territories |
|---|---|
| INBOUND GROUPS | 49% route leads round-robin |
| OUTBOUND GROUPS | 66% align SDRs to AE territories |
Route Round-Robin
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SDR-TO-AE RATIOS
The average ratio is 1 SDR to 2.6 Account Executives. This is consistent with 2018 findings.
Two things to note. One, smaller companies are much more likely to deploy 1 or more SDRs per AE. And two, even controlling for revenues, High-Growth companies report lower SDR-to-AE ratios than Laggards (1:2.0 and 1:2.8 respectively).
Distribution of SDR:AE ratios
Multiple SDRs : 1 AE 9% 1 SDR : 1 AE 18% 1 SDR : 2 AEs 36% 1 SDR : 3 AEs 15% 1 SDR : 4 AEs 10%
Average AEs supported by 1 SDR by revenues
< $5M 1.4 $5-19M 1.8 $20-49M 1.9 $50-99M 2.5 $100-249M 3.1 $250-499M 3.0 $500M+ 4.5
CENTRALIZED, DISTRIBUTED & REMOTE
In 2018, 48% of companies reported reps in the same role working in different locations. Due to COVID/remote/WFH, that number increased to 64%. Note that 23% of companies report plans for “fully remote” SDR groups for the foreseeable future. That was nearly unthinkable just a few years ago.
Distribution of responses
Fully remote for the future 23% Single state/province 37% Multiple states/provinces 41%
Percentage of distributed + remote teams by revenues over time
< $5M 36% 2018 71% 2020 $5-19M 34% 51% $20-49M 49% 56% $50-99M 63% 71% $100-249M 61% 67% $250M+ 70% 73%
15 SDR METRICS
WA 8% 33% 13% 13%
33%
nd Where companies build 2 offices
| AZ | CA | CO | FL | GA | MA | NC | NY | ON | PA | TX | WA | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| California | 8% | 15% | 10% | 12% | 31% | 16% | 8% | |||||
| Colorado | 25% | 25% | 15% | 20% | 15% | |||||||
| Georgia | 33% | 33% | 33% | |||||||||
| Massachusetts | 17% | 33% | 17% | 33% | ||||||||
| New York | 33% | 33% | 33% | |||||||||
| Texas | 34% | 33% | 33% | |||||||||
| Other | 38% | 25% | 13% | 13% | 13% |
PART 2 RAMP & RETENTION
Experience required at hire
Since 2010, we’ve seen a halving in required experi ence when hiring. This year, average required experience fell to 1.2 years.
Considering widespread 2020 layoffs (across both SD Rs and AEs), we wondered if hiring managers might move upstream in required experience for thei r SDR profile. These findings suggest this wasn’t the case.
SDR METRICS
Experience required at hire
Ramp time
Average ramp times sits at 3.1 months. This is in l ine with our 2018 findings. High-Growth companies report modestly faster average ramp times than Laggards (2.7 versus 3.4 months respectively).
If there’s a universal truth of Sales Development, it may very well be this: ramping new SDRs to full productivity takes about 3 months.
SDR METRICS
Tenure
Breaking a multi-year trend, average tenure increas ed in 2020—now sitting at 1.8 years. As described in <u>this piece</u>, SDR to AE promotions have slowed. On average, months as an SDR— from hire to AE promotion—increased 28% for the clas s of 2019 compared to the class of 2018. We expect this trend to continue for SDRs hired in 202 0.
Distribution of average tenure Average tenure over time
SDR METRICS
PRODUCTIVITY = TENURE-RAMP
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Productivity = Tenure - Ramp months at productivity by subtracting ramp time from tenure. Doing so, we find a median 17 months
CAREER
PATH
The overwhelming majority (93%) of companies offer at least one form of SDR career path.More than half (56%) offer two or more.The prevalence of SDR-to-AE promotion paths vary significantly between low and high-ASP companies—ranging from 83% (below $25K) to 45% (above $200K).
| SDR-TO-AE | Into an AE role |
|---|---|
| STEP-PROMOTIONS | Associate, Senior, Principal, etc. |
| ACROSS TEAMS | Inbound, Outbound, Enterprise, etc. |
% offering a given career path over time
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Minimum Time from SDrto ae promotion For those respondents with an SDR-to-AE promotion path, reps spend a median 17.5 months in SDR role(s) prior to AE promotion.
ATTRITION
2018 2020
[Image: R239] promotions and internal transfers) from these Nearly the entire difference occurred in voluntary turnover (i.e., resignations) which fell by more than half. This isn’t surprising given 2020’s labor market upheavals. As the job
Attrition Note: we asked respondents to exclude COVID-19 related RIFs (as well as routine Total average attrition—voluntary plus involuntary—fell sharply in 2020.
PART 3 METRICS & QUOTA
DAILY
ACTIVITIES
Distribution of average dials per day
Median activities per day by type
| TOTAL | 104 |
|---|---|
| PHONE | 40 |
| 40 | |
| 16 | |
| OTHER | 8 |
QCSper day
Another useful metric is the number of Quality Conversations (QCs) per rep per day. We define a QC as “a connect or response where at least one pie ce of qualifying or disqualifying information is learned.” We find an average of 4.4 QCs per rep per day. That ’s a 45% fall since 2014—or nearly 10% annual decline over that time.
8.0 SDR METRICS
DAILY QCs BY DOMINANT CHANNEL
We categorized groups as either Email-centric, Phone-centric, or Neutral based on their most dominant outreach channel. Responses indicate a 39% / 28% / 33% divide (email, phone, neutral).
By definition, phone-centric groups average higher dials per day. Interestingly, they also report 2.1X as many average QCs per day.
Email-centric 28 Dials per day 3.3 QCs per day
Neutral 41 4.1
Phone-centric 64 6.8
ATTEMPTS IN CADENCE
The average cadence/sequence has 10.6 attempts. This figure has been on the rise for a decade—growing at roughly 8% annually.
Distribution of average attempts
1-4 4% 5-8 27% 9-12 41% 13-16 20% 17-20 5%
Average attempts over time
2010 2012 2014 2016 2018 2020
30 SDR METRICS
Sales development Model
Broadly, SDR groups fall into one of three categories. They include :
1. Introductory Meetings 2. Semi-Qualified Opptys 3. Fully Qualified Opptys In prior years, the distribution has roughly been 1/3 rd to each. Given 2020’s business climate, we note a significant shift.
Companies shifted down the qualification curve, refocusing model from fully- qualified to semi and from semi to introductory.
We observe this across revenues and High-growthversus Laggard. Unsurprisingly, as ASP rises, level of qualification falls.
SDR METRICS
$$ 1/3^{\mathsf{r d}} $$
Timeframe is defined eed,” “money,” and “timeframe.”
| Right Profile(firmographics,tech,etc.) | Pain/need is identified | Person has authority(or access) | Compelling reason(to buy/change) | Money (has it or can get it) | Timeframe is defined | |
|---|---|---|---|---|---|---|
| Introductory | 65% | 47% | 32% | 15% | 5% | 0% |
| Semi-Qual | 83% | 76% | 83% | 50% | 24% | 28% |
| Fully Qual | 87% | 98% | 89% | 68% | 37% | 56% |
by Model SDR METRICS
Qualification level Pain/need is (firmograhics, identified 47% 76% 98% As ASP rises, “money” and “timeframe” are less fre Outbound motions are more likely to include “right Inbound motions are more likely to include “pain/n
Fully-qualified opptys 10.5 Stage 1 Converted7.0
Stage 0 Passed
Stage 1 Converted 8.8
Introductory Meeting
Fully-qualified opptys
Stage 0 Passed 10.5
Stage 1 Converted 7.0
Semi-qualified opptys 12.5 7.5 2020—this is consistent across ASP, motion, gher in an inbound motion, at lower ASPs, and otion, at higher ASPs, and for larger companies. s higher in an
Stage 0 Passed Stage 1 Converted Across the board, average quotas fell from 2018 to The global median of Stage 0 Passed is 15. It is hi for smaller companies. It is lower in an outbound m The global median of Stage 1 Converted is 7.5. It i SDR METRICS
Monthly quotas , and so on. falls as qualification level rises.
Quota attainment
On average, 68% of reps in a given group achieve quota. There has been remarkable consistency around this metric over the years. Two-thirds of reps achieving quota seems to be the natural equilibrium.
We note a 5% (percentage point) improvement in quota attainment in High-Growth companies versus Laggards (71% versus 66%).
68% of SDRs achieve quota in a given group.
SDR METRICS
Sourced pipeline per sdr
The median pipeline generated per SDR is $3.0M. (Note this is raw pipeline, not “forecast” nor “closed won.”)
There is wide variation across companies—some generating less than $750K in pipeline while others exceed $10M per SDR annually.
Median pipeline is $3.0M. The 25 th and 75 th percentiles are $1.8M and $4.7M respectively.
SDR METRICS
COMPENSATION & TECH
COMPENSATION
We find median on-target earnings of $76K and a 65:35 (base:variable) split.
Continuing a decade long trend, median OTE remains flat. For comparison, median price of existing single-family homes has increased 62% and median household income has increased 38% over the same period.
| ON-TARGET EARNINGS | $76K |
|---|---|
| BASE | $50K |
| VARIABLE | $26K |
OTE in
$Ks
Median SDR on-target earnings have remained flat for more than a decade.
but there is compression at the lower range of High-Growth Laggard
Acceleration technologies
We found the median sales tech stack consists of CRM plus 4.5 additional tools.
The number of tools in use increases as ASP rises, but only marginally—from 4.3 at <$25K to 5.8 at $250K+.
High-Growth companies report one additional tool, on average, compared to Laggards.
While median tools per group is 4.5 + CRM, the average is 5.4.
SDR METRICS
Technology adoption lifecycle
companies deploy more technologies than
SALES ENGAGEMENT PLATFORMS
You'll note that Sales Engagement Platforms (SEP) span several tech categories. As such, we chose to report their usage separately. 66% of companies above $5M in revenues report using a SEP.
| HIGH-GROWTH | 76% have SEP |
|---|---|
| MID-RANGE | 70% |
| LAGGARD | 43% |
PART 5 SALES LEADERSHIP
FIRST
LINE LEADERSHIP
Excluding companies with revenues below $51 "Managers."
we find the vast majority of groups are led by
Distribution of first-line leaders
Leader
profiles
| DIRECTOR | MANAGER | TEAM LEAD |
|---|---|---|
| The visionary and general | The coach, warden, and therapist | The player coach |
| Designs strategy | Optimizes execution | Executes process |
| Builds the ideal rep profile | Hires the ideal rep profile | Is the ideal rep profile |
| Seat at the executive table | Fantastic people motivator | Management-track potential |
| Great Strategist | Great Coach | Great Role Model |
REP-TO-MANAGER RATIO
The median number of SDRs reporting to a single first-line leader is 8. This is consistent with our findings from 2016 and 2020. As revenues increase, front-line leaders support more SDRs.
Distribution of reps per front-line leader
<3 SDRs 13% 4-6 26% 7-9 36% 10-12 21% 13+ SDRs 4%
Average # of SDRs per front-line leader by revenue
<$5M 4.7 $5-19M 6.8 $20-99M 7.1 $100-249M 7.4 $250M+ 8.1
45 SDR METRICS
, however, has grown modestly (1.7% and 2.7%
Leadership compensation nce roughly 2016 (posting a 2020 $128K $177K $226K
| 2016 | 2018 | 2020 | |
|---|---|---|---|
| MANAGER | $129K | $127K | $128K |
| DIRECTOR | $174K | $172K | $177K |
| VICE PRESIDENT | $220K | $215K | $226K |
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Leadership compensation By ASP/ACV front-line leaders’ on-target earnings $50-100K $100-250K $250K+ $151K $205K Too few rows to provide meaningful data
| $5-25K | $25-50K | $50-100K | $100-250K | $250K+ | |
|---|---|---|---|---|---|
| MANAGER | $123K | $129K | $124K | $129K | $151K |
| DIRECTOR | $157K | $155K | $176K | $180K | $205K |
| VICE PRESIDENT | $237K | $260K | 1 | 1 | 1 |
SDR METRICS
NOTES ON COVID -19
VID-19. While some implications already selling), we’re sure many will take time to become t, we collected a list of hunches on what we’d and what we (see pages 18-19) (see pages 21 & 25) (see pages 28-30) (see pages 33-34) (see pages 40-42)
what we hypothesized
- 1.Labor market shocks will lead managers upstream f or more senior candidates X l promotions slow ✔ ✔ attainment will fall X money & lower complexity X (see pages 51-52)
economy contracts ✔
o share m RIFs
SDR METRICS
observations For obvious reasons, 2020 will be remembered for CO inside Before we began the number crunching for this repor find. In the interest of transparency, we decided t 2. Average tenure will rise as the quits and interna 3. Effort per QC / meeting / Oppty will rise as the 4. Qualification criteria will soften (see pages 31-32) 5. Despite softened qualification criteria, average 6. Companies will pare back their tech stack to save 7. SDR groups will rebound quickly (if unevenly) fro
Headcount changes
st
Relative to march 1
We’ve <u>previously written</u> about the impact of COVID-19 on the B2B labor market in the first half of 2020.
The majority of responses to this research occurred in late Q3 and early Q4 2020. We asked how SDR headcount had changed relative to March 1 st
- 1.
A quarter of groups shrank over that period. Another third grew headcount appreciably. While the majority remained the same or grew modestly.
The median SDR group had no change in headcount from Q1 to Q4 2020.
SDR METRICS
HEADCOUNT CHANGES
headcount over this period.
| HIGH-GROWTH | +18% |
|---|---|
| MID-RANGE | +2% |
| LAGGARD | -3% |
Consulting Execution
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SDR, AE & AM Consulting + Execution our clients - 35+ bers. rship, our quotas. We No two companies are the same, especially when it comes to sales. ur go-to-market t of growth.
For over two decades, we’ve been focused on “more” for more conversations, more pipeline, more growth. Over 4 companies have relied on our thinking to make their num PRACTITIONERS FIRST, CONSULTANTS SECOND. Behind our ideas are our people. Rooted in sales leade team members have built groups, led teams, and carried don’t just research sales strategies, we live them. HOLISTIC APPROACH, TARGETED SOLUTIONS. Our team identifies the key variables that will make yo motion unique. We’re here to help take the guesswork ou
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