“How should I structure our SDR teams?” “How should they partner with AEs?”
“How should I structure our SDR teams?” and “How should they partner with AEs?”
First, you need to be able to answer these questions:
- What is your ideal SDR to AE Ratio?
- How complex is it for SDRs to generate each opportunity?
Then use the above framework to determine the best structure. Here’s how it works:
Question 1: What is your ideal SDR:AE Ratio?
Instead of looking at “standard” ratios, use the following model to narrow down the ideal ratio for your company:
- How many opportunities needed per AE?
- How many opportunities do you need from SDRs?
- How many opportunities CAN each SDR produce?
How many opportunities will you need per AE per Closing Period?
Determine how many opps each rep will need by backing out Quota, Average Deal Size, and your Win Rate percentage.
Opps per Closing Period per AE = [Quota] / [Average Deal Size] / [Win Rate]
Example: An AE with a $200k Quarterly Quota, Average Deal Size of $32k, and 30% Win Rate will need ~25 Opps per Closing Period.
How many opportunities will each SDRs need to source?
Now, narrow down the percentage of pipeline you expect SDRs to generate vs. Marketing, AE Outbound or other sources:
SDR Opps Needed = [Opps per Closing Period per AE] * [Percentage of Opps needed from SDRs]
Using the example above, assuming we expect SDRs to generate 60% of pipeline, each AE will need to 15 opportunities per Closing Period.
Finally, how many SDRs required to support an AE?
Look at the number of opportunities an SDR in your business can generate per closing period:
SDRs per AE = [SDR Opps Needed per AE]/[# of Opps SDR can produce]
Let’s assume from our example an SDR can produce 15 opportunities per month. The final ratio will be 1:1 SDR to AE.
Question 2: How complex is it for SDRs to generate each opportunity?
This is a bit more subjective, but understanding your buyer and deal cycle will generally answer this question. Large Enterprise or complex technical product? You’re more likely to fall on the complex end of the spectrum. Self-serve, high volume, no friction deals? You might be priced too low. Also, you’ll fall on the less complex end of the spectrum.
Mapping the SDR:AE Relationship
Pool — Low Complexity | Low SDR:AE Ratio
Use the Pool model when a single SDR can generate enough opportunities to support multiple AEs (uncommon) and sourcing complexity is low. SDRs are generalists and opportunities are “round robin” distributed to AEs. Your SDR Manager should focus 0n balancing quality with velocity.
Specialty Pool — High Complexity|Low SDR:AE Ratio
When the sourcing complexity is high but a single SDR can support multiple AEs, use the Specialty Pool. Map SDRs by “Specialty” — typically vertical or persona. This allows for institutional knowledge and competency as SDRs aren’t context switching.
Diversified Pool — Low Complexity|High SDR:AE Ratio
When it takes several SDRs to produce pipeline for an AE, it’s time to start mapping multiple SDRs to each AE. With low complexity, the need for AEs to drive day to day SDR behavior is lower. You also want to prevent individual AEs from being over or under fed. You can prevent this with a Diversified Pool. This is similar to the standard Pool but each AE has 3 SDRs. Pool each SDR between different AEs to reduce unfair matching. Thus, Diversified Pool.
In reality, few organizations will fall higher than ~1.5:1, and diversification allows you to split time without spreading your SDRs thin.
Here’s an example for an org that has a 2:1 SDR Ratio, Low Complexity and 2 AEs:
“Pod ← →Partner” Spectrum — High Complexity|Mid-High SDR:AE Ratio
Opportunities are tough to generate, and it takes one or more SDRs to support each AE. Typically, you have multiple buyer personas and a complex sales cycle. Diversifying won’t work here. Otherwise, the next AE is pulling your SDR before they can finish an outbound campaign. With the higher complexity, you want AEs and SDRs arm in arm tackling the market. The closer to a 1:1 Ratio the more your model should look like Partner vs. Pod.
In the Partner model, map your AEs and SDRs 1:1. They’ll hold their own 1:1 meetings, territory planning, and outbound strategy.
In the Pod model, map multiple SDRs to each AE. This is generally reserved for complex sales cycles where a Junior AE and multiple SDRs support an Enterprise AE who acts as Quarterback for the team.
Getting SDR structure right is challenging. By following the above framework, you’ll ensure maximized pipeline per AE without over investing in headcount (more on that to come).
Co-Author: Ben Salzman