In some form or another, sales development has been around for a long time. In fact, some of the world’s most famous companies (like Salesforce.com) were built on it.
The idea of breaking out a specialized sales development role from the sales department is based on unassailable logic:
- It focuses account executives on what they do best: closing deals.
- It professionalizes the process of opportunity creation and qualification – giving the job to people who are especially suited to it.
- It boosts sales productivity, accelerates growth and lowers costs at the same time.
At the start, the sales development role combined both inbound opportunity qualification and outbound prospecting efforts. It was a big step and the companies that pioneered it grew at impressive rates. But it was only the beginning.
As soon as the account based model takes hold, it leads to more personalization and more human touch. Sales development is the natural place for that.
— Craig Rosenberg, Co-founder and Chief Analyst, TOPO
A simple model
Traditional sales development was not particularly sophisticated. In fact, it’s quite simple:
- Hire hungry, ambitious young people
- Stick them on a bank of phones
- Give them big, broad lists of people to call (and/or inbound contacts to qualify)
- And stand back
It was a blunt instrument, but it worked a lot better than asking account execs to waste their time hunting for opportunities.
The Two Big Developments
Today, sales development has become much more focused and dramatically more effective.
The new sales development discipline has been well evangelized by the people who pioneered it, in books such as Predictable Revenue by Aaron Ross and Marylou Tyler; The Sales Development Playbook by Trish Bertuzzi; and From Impossible to Inevitable, by Ross and Jason Lemkin (we highly recommend all three).
The transformation in sales development has been driven by two big developments:
1) Separating inbound from outbound
Just as sales development itself is a specialization, the new version takes it one step further: creating two teams with very different goals.
One team focuses on responding quickly and efficiently to inbound interest created by marketing (email, advertising, the web, etc.). The other focuses on creating opportunities using outbound tactics (primarily phone and email – more on this later).
Both teams are important. But both involve different skills and different tactics. A recent Bridge Group study showed that inbound/outbound role specialization resulted in a 16% increase in Pipeline Power Score (their metric for revenue generation efficiency and effectiveness).
“Sales development specialization is an accelerator on the path to repeatable and scalable pipeline.”
— Trish Bertuzzi, The Sales Development Playbook
2) Focusing the outbound team on key accounts
The split of sales development into two teams coincided with the rise of a powerful strategy: an Account Based orientation (instead of a lead-centric one).
While inbound teams are heavily weighted to smaller companies (there are just many, many more of them), outbound teams can be focused wherever they’ll make the most impact. For any company chasing big deals, the natural focus for outbound sales development teams are the top tiers of named target accounts.
And when that happens, a new kind of machine is born.
This our Clear and Complete Guide to Account Based Sales Development is about the collision of outbound sales development with Account Based thinking. But for now, think of it this way: creating and training an entire team of specialists whose only job is to penetrate big, named accounts, is a very big idea indeed. Let’s track back and cover the critical context of the new sales development approach: Account Based thinking.
“If you want to go upmarket, which you absolutely must to grow, you have to go outbound. Winning large customers is much more about causing a sale, not just catching one.”
— Ken Krogue, President and Founder, InsideSales.com
The Rise of Account Based Thinking
As we detailed in The Clear & Complete Guide to Account Based Marketing, thinking of accounts instead of individual leads is hotter than a hot thing in an oven on a hot day.
The first wave of Account Based strategies were grouped under the misleading name Account Based Marketing (ABM) – probably because Sales had always thought in terms of accounts, while the idea was new for marketing (whose core processes and tools were built around leads).
Regardless of where it sat, Account Based thinking took off because it’s exactly what most B2B companies need most:
Big deals build big businesses
For most B2B companies, Customer Acquisition Costs and Lifetime Value economics are far more compelling in the enterprise market. And for many, big deals are worth 10-20 times more than the average deal size. These are company-making deals and they’re worth building a sales and marketing strategy around.
Buying teams are getting bigger
According to CEB research, the average buying team today includes 5.4 people. With increasing risk aversion, technology complexity and compliance concerns, few experts see this shrinking anytime soon.
As every sales pro knows, the bigger the team, the less likely they are to end up buying. After all, it only takes one veto to kill a sale (or one person on holiday to stop a deal in its tracks).
This risk is far higher if you’re tied to a lead-centric approach, talking to single individuals in isolation. Clearly, winning big deals today means working the entire account.
Inbound can only get you so far
As powerful as inbound marketing can be, ‘fishing with nets’ will always catch a lot more small companies than big ones (there are far more of them out there).
More importantly, inbound programs take 6-9 months to start seeing results and a full 12-24 months to start seeing significant value. For a new product or line of business, you have to start that process all over again.
Most companies simply don’t have the luxury of waiting for the lead-centric inbound model to ramp up. Outbound, account based efforts are a much faster route to revenue.
Finally, even companies that have already established their inbound machine are finding that they’re starting to reach saturation. It’s just far more crowded out there and everyone is competing against a lot more content aiming at the same audience. For many, inbound is starting to see diminishing returns.
The pioneers proved the model
Reports from the front lines of account-based programs have been astonishingly positive. Account based programs have been shown to yield the highest conversion rates and greatest revenue growth of all the programs they run. And the wider sales and marketing community has taken notice.
We don’t need to hammer home the argument here: the power of an account based approach has been accepted by virtually every progressive sales and marketing leader – and is being put into practice by every high-growth B2B company that isn’t selling exclusively to small businesses.
This article originally appeared in Engagio.
This article was written by Jon Miller from Business2Community and was legally licensed through the NewsCred publisher network.
He is a speaker and writer about marketing best practices, and is the author of multiple marketing books including Engagio’s Clear and Complete Guide to Account Based Marketingand Marketo’s Definitive Guide to Marketing Automation. Jon has a passion for helping marketers everywhere, and is on the Board of Scripted and is an adviser to Optimizely and Newscred. In 2010, The CMO Institute named Jon a Top 10 CMO for companies under $250 million revenue.
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- Building The New Account Based Sales Development Machine - November 13, 2016