Account-based Sales Development is not a new concept. Working within target accounts as a strategy is as old as cold calling. It’s actually quite a simple process: Rep A is assigned Accounts 1, 2, & 3. The rep must work leads until they convert or are disqualified. Once an account converts or is disqualified, the rep is assigned another account, thus always actively working the same number of accounts. Sounds easy, right? There are, however, major gaps in this process:
- Leads are assigned without data to support ICP (Ideal Customer Profile).
- Sellers go into outreach cold and blind with little to no insight on buyers.
- Accounts are often simply assigned based on territory, vertical, or size.
The modern sales development organization has adapted and improved on this strategy. With insights from the buzzworthy Account-Based Marketing initiative, sales leaders are turning their SDR organization into data-driven, appointment-setting snipers. Sales development teams using an ABSD strategy are seeing:
- Increase in the number of accounts to opportunities created.
- Increase in the ratio of outbound messaging to a conversation.
- Make SDRs better prepared for an AE role through account ownership.
If you are considering an account-based model, here are 7 signs to look for that may help you make your decision:
1. Greenfield no longer works
You were a new solution in a growing market at a competitive price point. You took advantage of time, using marketing and cold outreach to convert as many people in your target market as possible. Your buyers did not bite the first time. Then what? Is one more email campaign really going to grab their interest? No. If there wasn’t a conversion the first time you are going to need hyper-focus on intentional outreach to bring on your ideal customers.
When you gain traction, scaling predictably is the only way to continue the momentum. This means adding more of your ideal customers and increasing their overall lifetime value.
Using data to uncover who your best customers are is the only way to make sure you are focusing on what is most valuable to your business.
2. You have data to support your ICP
Each of your customers is a data point. Some customers have left, hopefully, most have stayed. Some pay you more, some less. This is critical data to support your ICP. Learn from your customers.
Which customers have stayed the longest, paid the most, and have needs that align most with your company’s vision? Once you define your ICP based on real data, find companies fitting the same profile. There are many great tools for this: Datanyze, Mattermark, Everstring, Insideview etc.
Here is why this works. You have already “pre-qualified” these target companies. Once assigned, there are only two reasons an SDR should stop working them:
- They convert to an opportunity.
- They push out the timeline for engagement. There is no disqualification because you know they are a good fit.
Throughout the history of inside sales, the “breakup email” has been a controversial topic. It is a last-ditch effort, a Hail Mary to elicit a response from your prospect before moving on. When you assign “pre-qualified” accounts to an SDR, breaking up with a prospect is obsolete. Why give up when you know you can provide value? ABSD empowers SDRs to keep working the account until they have a conversation.
[Tweet “ABSD empowers SDRs to keep working the account until they have a conversation. @TheSeanKester”]
Defining your ICP allows you to create a list of target accounts. Use data to estimate the opportunity value of each account. Segment these accounts based on the opportunity size, allowing for predictable pipeline forecasting.
3. You want a predictable pipeline
The #1 SDR metric driving business value in a lead-based model is the ratio of leads to opportunities. Put more simply, how many people do you need to prospect before one of them converts? With ABSD, this metric still applies. However, there is an opportunity to take it one step further and use data to create a predictable pipeline.
Once you identify your ICP, use data to segment them into categories based on revenue opportunity value. There are many ways to do this depending on your specific business model. In a seat-based model, use Linkedin to identify how many employees serve the function your solution serves. If there are 25 employees within a target account who would be using your solution and it costs $200 per seat, the opportunity value for the account is $5,000 MRR. It is actually quite simple. Create a process of removing as much manual work as possible and turn it into a sustainable model.
Applying data changes the SDR metric from net new opportunities created to revenue pipeline contribution. If your goal is to add 2MM ARR in net new sales revenue, you have 10 SDRs, and your AEs close 20% of all opportunities, a simple formula will set the new SDR quota. In this case (assuming 100% of sales pipeline is set by SDRs) each SDR is responsible for $83,333 MRR per month or 17 accounts with the opportunity value of 5,000 MRR.
This model is dependent on one key metric: Predictable AE closed/won opp percentage.
4. Your AE’s closed/won opp percentage is predictable
Great VPs of Sales know their closed/won opp percentage. It is the only way to forecast revenue growth. If you have a great VP, this number is likely segmented based on the size of the opportunity. However, too often the account opportunity value is not set until the first conversation with an AE.
In the ABSD model, opportunity value is estimated before the SDR is assigned the account. Therefore, AE closed/won percentage is critical data to set SDR pipeline contribution metrics. The closed/won percentage typically varies based on the size of an opp. For example, a 1k MRR opp closes at 30% vs. a 5k MRR opp closing at 15%.
Many elements play into this number beyond the size of the opp. Factors to consider include the number of stakeholders involved, involvement of procurement, and IT constraints around security or implementation.
Understand the dynamic elements involved in differing deal sizes along with AE closed/won percentage. Apply the insights to set the right process and expectations for the SDRs; the result will align company revenue goals with SDR quota. Better alignment produces more buy-in. More buy-in nets better results.
[Tweet “Better alignment produces more buy-in. More buy-in nets better results. @TheSeanKester”]
There is a secondary benefit to ABSD often overlooked: Brand reputation.
5. You don’t want to burn brand reputation
By targeting the right accounts based on your ICP, reps are encouraged to be strategic and hyper-personalized in the way they penetrate accounts. Intentional and targeted messaging mitigates the risk of email “blasting” potential buyers with un-personalized messaging.
Understanding your TAM is critical, there is a finite number of potential buyers. Organizations cannot afford to burn down the forest with bad messaging. This is an all-too-common side effect of the greenfield strategy when the net new demo number is the metric driving performance. SDRs’ activities are directly correlated to what is measured. Measure net new and it becomes a numbers game. Reaching out to more people = more opportunities. It’s simple logic.
How do you mitigate this? Flip the script and assign “pre-qualified” accounts with the new metric: pipeline contribution. By assigning a set number of accounts, the SDR process changes. It becomes strategic. The only way to advance and be assigned a new account is through a conversation. Conversation rate is exponentially higher when the messaging is personalized. I don’t think anyone would argue with that.
Which leads to identifying the right type of messaging to use…
6. You’re targeting a specific vertical or new market
ABSD helps align processes with goals such as segmenting out a new vertical or doubling down on your data-driven ICP. The outcome is targeted and intentional messaging. But what is the right messaging?
There are many answers to this and most depend specifically on your business. However, there are a few key elements to consider:
- What market am I going after?
- What are their pain points specifically based on the context of their business?
- Who is the person ultimately making the buying decision?
- What is the persona of a user of our solution?
- Who will directly experience the benefit?
Uncover what emotions influence the decisions of your buyers. What do they think about everyday? What keeps them up at night? What business goals do they strive to achieve? Understand the context of how your solution provides value to their specific pain points in the world they live in. Tell a story. Understanding emotional goals helps you understand what is really important.
Answer these questions for every vertical. Empower your SDRs to cater their messaging to the right persona at the right time. The value prop for a VP is going to be different than a manager or a rep.
Creating buyer personas does not have to be the sole responsibility of the sales development manager, work in tandem with marketing. Define personas and identify messaging touchpoint strategies (emails, call scripts, and social drips).
7. You want your SDR team to work in tandem with Marketing
Sales and marketing alignment has historically been a hot-button topic. Just do a Google search and it brings back 33 million results. With the newly trending strategy of Account-Based Marketing (ABM), high performing organizations are teaming up to engage targeted accounts. The results are a unified front of content and intentional sales campaigning.
All great sales organizations leverage buyer personas to be effective. ABM’s strategy is a complement to buyer personas. Success with ABM is measured on identifying key business goals and challenges of their buyers to customize programs focused on these issues.
When it comes to Sales and Marketing relationships in an ABSD + ABM strategy, alignment is critical to success. Sales Development and Marketing should coordinate efforts around both marketing and outbound prospecting to drive for a unified front and cohesive messaging, ultimately leading to increased conversions and overall revenue growth.
The Account-based sales development model is based on an old strategy but has been modified to fit the needs of the modern sales development organization. More importantly, it is here to stay. If you care about growth, want to create predictable revenue, or strive to maintain alignment with sales and marketing efforts, get started with ABSD today.