With the Rise of the Inside Sales Rep and the Sales Development Team, one of the most common questions that comes up is about the ratio of appointment setters to closers. First, a quick primer. Sales Development Reps/Business Development Reps (BDRs) were popularized by the 2011 book Predictable Revenue. BDRs use email and phone to prospect, qualify leads, and set appointments for Account Executives (AEs), which close the deals.
Overall, the main goals is to have much more specialized functions on the sales team. Too often, expensive sales people are used to cold call (prospect), respond to inbound leads, set appointments, deliver demos, write proposals, and close deals. The modern approach is to have one team dedicated to prospecting (Business Development Reps), one team dedicated to following up with inbound leads (Market Response Reps), and one team taking the qualified leads to close (Account Executives).
Now, back to the original question regarding the ratio of BDRs to AEs. Of course, every business is different, but one constant stays the same when thinking through the ratio of BDRs to AEs: the Account Executives should have as many Business Development Reps as necessary such that the AEs are only working active, qualified opportunities. Everything that takes place before an engaged lead is ready to start the buying process should be handled by the BDRs. More often than not, sales teams have too many AEs and not enough leads. One strategy in this common scenario is to let go of the low performers and use the money saved to hire more BDRs until the successful AEs are well fed.
The next time someone says they want to hire more sales people, ask the hard questions and figure out if they really need Business Development Reps and not more Account Executives.
What else? What are some more thoughts on the ratio of Business Development Reps to Account Executives?