How do you help finance understand the role of SDR’s, and include them in structuring territories and OTE’s?

These are few elements I would take into account to o enable our finance teams to understand what SDRs represent and have them play a role in structuring territories & OTE.

- Educate Finance About SDRs: It has the crucial job of prospecting and qualifying leads, so it can pump your AEs with ready-to-close opportunities.

- Give Them the Numbers: Finance is data-driven. Estimate how many more qualified leads, conversion rates and sales SDRs can bring. For instance, if every SDR is able to produce X additional meetings a month that equals Y total more deals. Be realistic, and make sure you have enough fuel ($s) to feed that engine.

- Discuss Compensation and Territories Together: Bring finance to the table when you set On-Target Earnings (OTE) for SDRs, using benchmarks from your industry to back up those numbers. Because your AEs divided the U.S. in half, make it easy for them to win by aligning SDR territories likewise;

- Collaborate and Communicate — Always keep the lines open. Financing being involved with these decisions brings ownership — but they also have great potential to provide insights into how budgets and resources can be allocated.

When you are able to clearly communicate the benefits and also make finance part of the process, it becomes a whole lot easier for them to get on board with hiring SDRs – but not only that — structuring territories in this way saves your company money too.

To help Finance understand the role of SDRs, you need to explain the role in a way that demonstrates anticipated cost savings and ROI based on work distribution, comp plan(s) and increased sales.

Here are some specific questions and a suggested approach to demonstrating your cost savings and ROI:

• Why do you need to add headcount to the sales organization?

  • Identify the limits/constraints of an AE-only model relative to Total Available Market (TAM) for your business

  • How are these limits/constraints mitigated with the addition of the SDR role?

• How is work differentiated between SDRs and AEs?

  • Create job descriptions that clearly delineate the role of the SDR

  • Update your AE job description to remove SDR functions

  • Visualize the new sales structure through an org chart

• What is the bottom line cost & ROI?

  • Update comp plan(s) as needed to incorporate the SDR function

  • Provide sales projections based on the revised sales organization model, including ROI for the additional staff costs

  • Provide staffing projections based on anticipated SDR-to-AE workload

    • Ideally, you can show that adding lower-cost SDRs for prospecting will show long-term cost savings compared to hiring additional AEs

  • Set timelines for initial proof of concept (if needed)

Ultimately, this exercise will help you rationalize when/how to add SDRs to your sales organization. Perhaps a full add-to-staff can't be justified, but an adjustment of existing staff roles to include SDR functions can, so you can show proof of concept.