Why you probably have the wrong ratio of SDRs to Marketers
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I’ll cut right to it: SDRs should not be the default way to ramp up your GTM. They are part of a bigger GTM system, they aren’t THE system. So, you probably have too many SDRs and not enough marketers. If this is the case, your GTM team is inefficient, and no one wants that, especially in a downturn when cost cutting is key.
While this post may be slightly one-sided because I am a marketer, I feel strongly that having a large SDR team and a small marketing team is a highly ineffective way to build a B2B business. SDRs simply cannot be effective without marketing as you scale past 1 or 2 SDRs. At that point, it’s better to hire a marketer than to add another SDR. I’ve worked at startups at various stages of growth with bottom up, top down, and B2B2C, and this general advice has always held true.
Quick note: I’m using SDR (Sales Development Rep) to mean SDR or BDR (Business Development Rep). You say to-may-to, I say to-mah-to, let’s call the whole thing off.
Disclaimer: Since I wrote this newsletter, a lot has changed due to AI & automation. This makes the case for a more balanced ratio of marketers to SDRs even stronger.
In this newsletter
If you take away anything from newsletter: Do not layoff a bunch of marketers and keep all your SDRs in this downturn. Marketers improve the efficiency of your SDRs. Costs may go down by cutting marketers in the immediate, but efficiency in acquiring customers (aka CAC) will go down soon after and the impact on brand will be felt long after. You can get more meetings out of the same number of SDRs when marketing is creating content, automating emails, increasing web conversion, etc.
Marketers : SDRs
Breakdown of marketing & SDR responsibilities
Why you need clear rules of engagement
How to get the ratio of marketers to SDRs right
Opportunities for marketers
Marketing course announcement: We’re planning a cohort-based course for early & growth stage marketing leaders, tell us what you want!
Appendix because I have a lot to say on this topic
More thoughts on SDRs & marketers
Fail modes across SDR & marketing teams and how to fix them (paid only)
Access to Figma and spreadsheet versions of diagrams and tables (paid only)
The problem: You have too many SDRs
If you continue to add SDRs when you don’t have a properly scaled marketing (and rev ops) function, you won’t improve efficiency—you’ll decrease efficiency. In other words, if you have 5 SDRs sending slightly iterative versions of the same email to a random smattering of prospects and aren’t testing, learning, and systemizing at scale you’re doing it wrong.
Here’s why having too many SDRs is a problem:
Email chaos: You’ll contact some prospects way too often, SDRs will send emails manually that could just be automated, and messaging will be inconsistent. Even worse, SDRS and marketers often email prospects at the same time when you don’t have a good system in place. This is a waste of time for both teams and a bad prospect experience.
No “Fuel”: Most prospects aren’t immediately ready for a meeting. SDRs often try to drive straight to that meeting, when many prospects need to read content, download a resource, or attend an event first. You need a marketing team to create this value-add content. We’ve all seen “meeting bribery” towards the end of the quarter and bad discounts that just tarnish the brand and waste money on the wrong prospects. More on balancing the fuel and the engine here.
No testing or scaling: With SDRs sending out individual email campaigns, you won’t be able to test and scale what’s working as quickly. What’s working for SDRs should be automated if possible, and without marketing and rev ops, this won’t happen. You’ll be stuck adding new SDRs forever and won’t achieve economies of scale.
Meeting focus vs. full-funnel conversion focus: SDRs will often over-index their lead gen and outreach on the audience that gets them meetings. This could mean they focus on an audience that is totally divergent from your actual ICP. If you book meetings or sell to the wrong ICP this will have long-term negative effects on retention. Marketing tends to take a more full-funnel approach.
Siloed marketing and sales teams: When the balance is off, one team typically overtakes the other and you don’t get the benefits of both teams’ perspectives.
For a more detailed table on all fail modes related to having too many SDRs and how to fix it, subscribe to our paid newsletter.
Why you have the wrong ratio of SDRs to marketers
Why do some companies end up hiring SDR after SDR and get the budget/headcount plan approved for more SDRs before they even have a marketer? Here’s my take.
Everyone’s calculating SDR headcount based on # of AEs. When you Google “SDR to marketing ratio”, you get a ton of results for AE to SDR ratio, but basically nothing for SDR to marketing ratio. (I guess there’s an SEO opportunity here that I might be able to capture.) To create a well oiled GTM machine, you need to get the ratios right across all teams: Marketing, SDRs, AEs, RevOps, and Customer Success.
It’s perceived as easier to prove the effectiveness of SDRs. Plus, headcount planning for SDRs seems easier: “Add 1 SDR, output x meetings,” they say. But it’s really not this simple. Messy attribution and “cannibalization” of marketing activities by sales may inflate SDR numbers.
Messy attribution: If you are using last touch or first touch attribution, you will likely over-count SDR impact. Getting customers is a team sport and attribution is rarely clean and very rarely mutually exclusive. The meetings booked by SDRs likely would have happened anyway if marketers set up automated prospecting, email marketing nurtures, and high quality content with inbound forms. All of these methods are more scalable and efficient than hiring a bunch of SDRs.
The idea that SDRs = outbound and marketing = inbound limits your efforts and impact and can lead to the wrong hires. Marketing can be really helpful with automated outbound. SDRs can be helpful in qualifying inbound and contacting inbound when they drop out of automated processes. When you team up in the right way on inbound and outbound it works better and you need fewer humans.
Startups often overvalue “engine” and undervalue “fuel”: When you overvalue “engine”, you think adding more people and sending more emails and doing more cold calls will keep working without diminishing returns. It won’t. More on fuel and engine in this MKT1 post
Marketing is thought of as “just top of funnel”: When marketing gets pigeonholed as only driving top of funnel growth and just “handing off” prospects to sales to close, it might seem logical to just have SDRs cover top of funnel and eliminate marketing. But in reality it’s the opposite, marketing is set up to cover the entire funnel and SDRs are best utilized as assistance in a specific area of the funnel. See the funnel diagram below.
Sales want a “feeder” role for AEs: It’s easier to hire SDRs and choose the best ones than it is to hire AEs in many cases. If trained and invested in, this works well. That said, I think we are over-reliant on this method of sales hiring without thinking about the ramifications on prospect experience, marketing and sales silos, and the overall inefficiencies created. As an aside, I’ve transferred a few SDRs to growth marketing roles, and this works well too, but shouldn’t be the only reason to hire another SDR.
What should SDRs do compared to marketers?
In a traditional definition of an SDR, they are responsible for prospecting, cold outreach, and qualifying leads for sales. The problem with this definition is that much of prospecting, outreach, and qualifying can be automated by a smaller number of people with the same effectiveness of having a large SDR team. Marketers and revenue operations teams are often better suited to do this automation, so you might need to shift headcount to those teams away from SDRs.
In my definition of SDRs, they handle one to one communication to drive leads to sales, when automation doesn’t work. They are a (marketing) channel for high-touch, bespoke, personalized communication. This isn’t a punchy definition or a super riveting job description, but nonetheless I believe this is what’s needed. To use an engineering analogy, think of marketers as AI and SDRs as the human-in-the-loop. To use a hospitality analogy, marketers are online booking and the front desk team and SDRs are the concierge. When you think of SDRs in this way, you’ll realize you need fewer SDRs.
Breakdown of responsibilities between SDRs & Marketing
Note: this is not comprehensive on all of marketing’s responsibilities, just those that directly relate to the SDR and sales process.
Marketing and sales have different skillsets and incentives, this is a good thing
There are some critical distinctions for understanding the breakdown of marketing and SDRs role responsibilities that may get lost in this Venn diagram:
1. Marketing typically owns 1 to many communication across the entire customer lifecycle. Sales owns 1:1 to or 1 to a few communications in between lead and meeting.
This makes sense since:
Marketing can best segment your audience with a marketing automation tool
Marketing is used to setting up a/b tests and optimizing accordingly.
Various marketers come together to make these communications happen: Product marketing, content marketing, growth marketing (and depending on the medium, design).
Marketing typically owns positioning, messaging, and brand, so it’s easier to get the message right.
Similarly, marketing also creates the content that can be used in these communications (think blog posts, templates, webinars), so marketing has a stronger understanding of what to link to or include in emails rather than just “Do you have time in the next few days to schedule a meeting?”.
2. Incentive structures and compensation are different. Sales obviously gets commission based on revenue, typically on a quarterly basis. Marketing doesn’t.
Sales are incentivized on short-term revenue. Yes, they should be thinking about long-term revenue and setting themselves up for the next quarter or two quarters out, but usually the focus is on hitting this quarter’s number at all costs—because that’s how you get paid.
Marketing cares about pipeline and revenue this quarter, but they’re also focused on long-term success. They are thinking about building up brand awareness, audience education, the overall prospect and customer experience, etc. Because of this broader mix of responsibilities, some of which are difficult to track in the short term, they aren’t usually working on commission.
To build a sustainable business you need both short-term and long-term focus. If you are only focused on the short term, you will never get efficiency in your system and your growth rate will stall. If you don’t invest in sales AND marketing, you’re hindering your growth potential.
A few other ways to use SDRs
SDRs are useful for filling in gaps automation can’t (like hyper-customized communication to high-value prospects, and making calls). Here are some less obvious ways they can help be manual helpers in a highly-efficient GTM engine:
Finding contact info that Clearbit, ZoomInfo, etc. doesn’t have.
Helping you test new audiences in a manual way to get more anecdotal data, before you build out all those automated drips. This is the case for hiring an SDR early on or putting an SDR on a new product line or audience.
Making sense of a complicated org chart to get to the right buyer for a key account.
Prospecting when you can’t scrape or find a list that covers your TAM.
Sharing feedback directly from customers that can inform other GTM efforts, especially when they have an organized way of sharing it.
SDRs can be effective content distributors and event promoters when they send targeted content to the right prospects.
Inbound SDRs can also be used as “order takers” when you don’t have a self-serve flow built out but you have people who are ready to “buy now”; this can be done through on-site chat or a quick call. This also helps SDRs start to build skills they will need to be an effective AE.
SDRs can join networking apps and communities for events and message people and book meetings through that channel, which helps you get more out of the event than just showing up.
More from MKT1
✂️ Templates for paid subscribers: Paid subscribers can find all templates here, including org chart diagrams in Figma and growth/demand gen templates to help you automate that 1-many communication!
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👁️ Related newsletters: Scaling marketing orgs from 1-25+, 4 ways marketing is different from sales, and Growth marketing teams
📖 Keep reading: Paid subscribers get access to the rest of this newsletter, which includes how to create rules of engagement and ownership, and figure out the right ratio of marketers to SDRs.