In 2011, former Salesforce Director of Sales Aaron Ross published a book called Predictable Revenue that changed the structure of sales teams everywhere.
In it, Ross introduced the idea that sales could be more reliable and efficient if the responsibilities that fell to an account executive were split. On one hand, a team of sales development representatives would focus on prospecting to build the sales pipeline. On the other, account executives would focus on closing deals. Breaking down the process allowed sales leaders to measure and optimize each step of the sales cycle to a point where they could predict revenue with standardized formulas.
The strategy worked, ushering in an era of sales specialization.
Most of the debate today isn’t whether or not to deploy SDRs, it’s whether they should report to sales or marketing, what the best ratio of reps to account executives looks like and how to facilitate smooth handoffs from the SDR to the seller. The conventional wisdom is that the SDR/AE split is what’s best for sales teams and the buyer.
But is it?
What Is Full-Cycle Sales?
Sales development reps have some of the highest turnover rates in the sales profession and they often suffer from burnout. Meanwhile, buyers are coming to sales conversations with more research on products than ever before and less patience for jumping through hoops with salespeople.
For a growing minority of sales leaders like Amy Volas, founder of the executive search firm for sales company Avenue Talent Partners, and sales training firm MEDDIC Academy founder Darius Lahoutifard, it’s a sign that sales needs to return to its roots where an account executive carried a deal from the prospecting stage to close.
It’s time to bring back full-cycle sales.
It’s What the Buyers Want
Imagine for a moment that you’re shopping at a mall and a salesperson at a skin care booth catches your attention. They offer you a free sample of some lotion and pique your interest in it. But as soon as you ask them about the product and how much it costs, they tell you that you have to speak with their sales counterpart next week.
That’s what the current buying process is like under the sales development rep model, Volas argues.
An experienced full-cycle enterprise account executive turned company founder, Volas has ample experience as both a buyer and seller. One of her biggest frustrations with the division of labor is that sales development reps aren’t able to address the questions most important to the buyer.
In some cases, a narrow focus on prospecting leads to robotic, BANT-style conversations, where the sales development rep is only concerned with ticking off a list of questions before arranging a meeting with the account executive. Those meetings are frustrating and a waste of time, Volas said.
But she’s also had great conversations with sales development reps who show that they understand her business, ask great questions, uncover pain points and show that their product can solve it — only for them to pass her off to an AE to have the same conversation again.
“We’re turning our buyers off, leaving a lot of opportunity behind, especially in enterprise sales.”
Volas recalled a conversation with a sales development rep who pressed all the right buttons and piqued her curiosity about the software. But the moment she asked to see a demo, they told her, “I can’t do that.”
So she agreed to a conversation with the account executive with one caveat: She didn’t want to repeat the conversation. And yet, “The [account executive] shows up and is like, ‘So, why are we talking today?,’” Volas said.
There’s also a personal relationship that gets built in those early exchanges that gets lost when the rep hands the buyer off to an account executive — and along with it, established trust that could have carried the deal forward.
“It’s that taste of human connection that existed between the two people,” Lahoutifard said. “That is not describable in the transfer of information between the SDR and the AE.”
But it doesn’t have to be that way. A full-cycle sales rep eliminates the need for a handoff and streamlines the process for buyers because they manage the deal from start to finish, Volas explains.
If the buyer just wants a demo, the salesperson is equipped to do that. If they want to advance the conversation forward to a deal, they’re working with the same person. The seller can also take knowledge of the buyer’s concerns from those early exchanges and reassure the buyer that they’re addressing them to close the deal.
Ultimately, forcing the buyer to connect with two separate salespeople only ends up pushing them away.
“We’re turning our buyers off, leaving a lot of opportunity behind, especially in enterprise sales,” Volas said. “When you have a person riddled with meetings and responsible for lots and lots of money … and you have an SDR who doesn’t know how to have a business conversation knock on the door, that door becomes closed forever.”
Full-Cycle Sales Teams Are More Effective
One of the main arguments for the SDR model is that it’s more efficient to have sellers specialize.
It stands to reason that a sales development rep who focuses just on prospecting will be able to fill more pipeline than a seller who is both prospecting and closing deals. But there’s a cost to that specialization, Lahoutifard said.
Prospecting can be a grind. It’s tough to make 100 phone calls and send 50 emails a day just to arrange a meeting. Add on the frequent rejection that salespeople face in general, and you have a recipe for burnout, Lahoutifard said.
“One of the biggest pleasures in sales is to win,” Lahoutifard said. “Of course, you can say SDRs also win by obtaining a meeting, but it’s not like signing a contract.”
In fact, the average tenure of a sales development rep is 1.8 years and the average turnover rate is 38 percent, according to The Bridge Group’s 2021 Sales Development Report. While some of those reps become account executives or content creators, others just abandon the sales profession. And since the role is considered an entry-level position for sales, it can end up draining a pipeline of talented sellers.
“One of the biggest pleasures in sales is to win... Of course, you can say SDRs also win by obtaining a meeting, but it’s not like signing a contract.”
“We’re turning people who are really good and just need good training out of the profession,” Volas said.
Volas also questions the argument that specializing is the most cost efficient mode for sales teams. While the average sales development rep base salary is less than an account executive’s ($45,420 to $56,633, according to PayScale), you also have to pay for a team leader and a suite of prospecting tools. Then there’s also the hidden cost of deals the company misses out on because the prospect didn’t want to engage with a sales development rep.
Volas argues it’s more efficient to have a team of full-cycle account executives from the onset.
While the account executive will have less time to dedicate to prospecting, they’re able to make up for that with industry and customer knowledge that speeds up deals later on. They’re also able to build on successful relationships to get referrals to other customers and expand their pipeline with higher-quality customers.
To Switch to Full Cycle or Not to Switch?
If Lahoutifard were to build a revenue organization from scratch today, he’d start with a full-cycle sales team every time — but deciding whether or not to restructure an existing sales team is trickier.
It’s not easy to convince HR to shift your hiring plans, nor is it easy to restructure an existing sales tech stack. So before you make the switch, it’s important to determine what your company has to gain in a full-cycle model.
“It takes courage to go against the status quo,” Lahoutifard said. “And an ecosystem is built. There are CRM tools, outreach tools and all these tools are built with this architecture in mind.”
Lahoutifard suggests starting with surveying your customers. Ask them how they felt about the switch from the sales development rep to the account executive, and if they would’ve preferred meeting with an account executive from the start.
This can give you a sense of what your customers prefer. And if most would rather not engage with the sales development rep, then it’s a sign that you might also be losing customers.
From there, he recommends looking at your SDR turnover and promotion rates. If they’re not advancing in their careers, then it may signal that it’s not a valuable development pipeline.
“It takes courage to go against the status quo.”
In order to ease the transition, Lahoutifard recommends hiring a couple full-cycle account executives to start. From there, promote some of the top-performing sales development reps to full-cycle positions on a smaller product.
None of this is to say that sales development reps aren’t valuable contributors. Instead, Volas suggests they can be consolidated under different teams based on their abilities. If a rep is good at writing emails, they may be a better fit in marketing. If another rep is interested in operations, they may have a future in sales enablement.
To replace some of the prospecting the reps were doing, Volas would prioritize building a relationship with marketing to run demand-generation campaigns that meet the buyer where they are.
Organizing under a full-cycle account executive model doesn’t have to spell the end of entry-level positions, either. Junior account executives can cut their teeth on lower-stakes deals, Volas said. This could include transactional inbound deals or selling to smaller businesses. She’d also give them a longer ramp time and assign them a senior account executive to study under.
“It would be inside sales,” Volas said. “It would be a role where you have access to understanding from soup-to-nuts every aspect of the sales process.”
As they gain more experience, you can advance them to higher-value products or to enterprise-level sales, Volas said.
Of course, there’s still the risk that account executives struggle to maintain a full pipeline. It’s easy to book several meetings one month and then have less time to prospect the next. That’s why it’s on the sales leader to prioritize prospecting through training and incentives.
At a previous company Lahoutifard would have account executives get together every Tuesday for “Mardi Gras.” The salespeople would go around sharing who they were prospecting and why that day, and then would spend that time reaching out to those customers.
“There should be a balance in everyone’s schedule,” Lahoutifard said.
Despite what to Volas is clear evidence that a full-cycle AE model is the most effective structure for a sales team, she doesn’t anticipate sales leaders to change their minds overnight. It’s difficult to go against the status quo. But buyer patience for SDRs is weighing thin, which means a return to full-cycle account executives won’t be too far behind.
“Buyers are going to continue to speak. They hold the keys,” Volas said. “People don’t want to be handed off.”