Tuesday Dec 20, 2022
EP161: Hiring Pipeline Builders Who Can Build Trust.
CROs, VP of Sales or VP of SDRs need to be able to persuade like Atticus Finch, write and email like Tarantino, and perform like DiCaprio. You’re actually looking for people to have a decent conversation with somebody that is built on trust and authenticity. You can’t solve that if all you want to do is hire more SDRs. David Dulany continues his conversation with Corey and Chris. He says, “The number one recommendation that I would make if people were asking is do not hire five SDRs First, hire a really good operational person that can connect the dots and set the stage and set the foundation between all the technology and the processes and the playbook to get that in place and then start to layer on the people that can actually execute on that. “ If companies have a good sales operations person that has the bandwidth to be able to help the SDRs, it makes a huge difference in helping them quickly learn how to create that trust. There’s more to this success plan than this, but you’ll have to listen to get the details on this episode of Market Dominance Guys, “Hiring Pipeline Builders Who Can Build Trust.”
Link to the first part of this interivew: Ep 160: Prospecting, Inbound, or Pipeline Problems; Should You Hire an SDR?
About David Dulany
He is highly-skilled and knowledgable in the SDR/BDR space. His training courses are personable, easy to understand, and most importantly- actionable. At a strategic level, he has the ability to effectively blueprint the entire Sales Development function. From there, recruit, hire, build, mentor, inspire and lead a team of Sales Development Representatives to exponentially grow new business revenue and new logo attainment for start-ups or more established companies.
He considers himself a lifelong student of this craft.
Tenbound is a Research and Advisory firm focused and dedicated to B2B SaaS GTM Sales Development Performance improvement. The Sales Tech industry has exploded over the past few years; however, expertise in the subject is still rare. Tenbound aims to uplevel the profession through cutting-edge research, high quality events, and highly practical online training programs for all levels of the Sales Development team.
Full episode transcript below:
Welcome to another session with the Market Dominance Guys, a program exploring all the high stakes speed bumps and off ramps of driving to the top of your market, with our host Chris Beal from ConnectAndSell and Cory Frank from Branch 49.
CROs, VP of sales, and VP of SDRs need to be able to persuade like Atticus Finch, write an email like Tarantino, and perform like DiCaprio. Actually, you're looking for people to have a decent conversation with somebody that is built on trust and authenticity. You can't solve that if all you want to do is hire more SDRs.
David Delaney continues his conversation with Corey and Chris. He says, "The number one recommendation I would make if people were asking is, do not hire five SDRs first, hire a really good operational person that can connect the dots and set the stage and set the foundation between all the technology and processes and the playbook to get that in place. Then you start to layer on the people that can actually execute on that."
If companies have a good sales operations person that has the bandwidth to be able to help the SDRs, it makes a huge difference in helping them quickly learn how to create that trust. There's more to this success plan than this, but you'll have to listen to get to all the details of this episode, Hiring Pipeline Builders who can Build Trust.
Corey Frank (01:36):
To your point, David, about Q1, it will be really interesting, Q1 and early Q2, to see with some of these cuts and changes in layoffs that folks are having, they're moving away from a pipeline-first culture, which is where they really should be. Chris obviously lives this. Chris has one of the best weapons on the market to control your own future as an organization, to deliver the greatest ROI they could imagine to their investors, and of course, what we talk about, which is the namesake of this podcast, to dominate your market, because it's just all math.
As Chris knows from the physics side of it, a blood pressure of zero over zero is dead. The pipeline pressure is a privilege that many deny. When you stuff more water or oil or gas or leads into the pipe, the law of physics takes over. And substances that move through the pipe, it's flow, it's F equals Q divided by T. Flow requires a pressure gradient between two points such that the flow is directly proportional to the pressure differential.
Higher pressure, more leads, will certainly drive greater flow rates. And I find that that's fascinating when folks are trying to target an ABM strategy, which certainly has its place, as a replacement for general brute force ballistic SDR activities. Wouldn't you say, David?
David Dulany (02:59):
Yeah, big time. I just heard that Warren Buffet has $100 billion in cash right now. And if you think about market domination, this is the time over the next 12 months when companies market dominate, if they really go hard on this. Because if you think about it, if everybody's battening down the hatches and inverting because they're trying to save money and the CFOs are taking over, then that means, and especially when you think about ConnectAndSell, there's nobody out there actually having conversations.
That's the thing, it's all account-based and product-led growth and we can get rid of all the salespeople, we don't need sales people anymore. That's the trend in the software industry. So, if you zag it the other way, and this isn't just a pitch for ConnectAndSell, honestly, if you're out talking to people and having conversations and engaging the market, you're queuing yourself up for market domination when the economy turns back around.
Yeah, it'd be hard for me to agree anymore than I agree with that. I'd have to really work at it.
Corey Frank (04:07):
Even if you didn't have to agree, you would agree.
Even if I have to agree. It's-
David Dulany (04:11):
You've got to do it right. You can't just throw people at the problem, which is what, when we had a lot of money in the bank and everything was up and to the right and money was cheap, yeah, you could hire a team of 10 SDRs and hopefully they would produce something even if they didn't have any management or operational support. But you can't do that anymore.
You really have to work with them and set up everything correctly on the backend from an operations perspective to support them, give them training to be able to have those conversations, plug in the tools to be able to do it, and do it right. So, that's the simple message of the stuff we do at TenBound. It's, don't be a dumb ass.
Great tagline, "TenBound, don't be a dumbass."
Corey Frank (05:01):
Well, let's talk about a bit, because Chris and I like to, certainly with the sheer volume of phone calls and conversations that Chris' weapon allows you to do, we're certainly a connoisseur and a practitioner of Chris' methodology here at Branch, but there's no spot price on the price of a conversation today or there's no spot price on a demo meeting scheduled. So, maybe you could talk a bit about some of the research that TenBound has done.
This is what I love about Trish Bertuzzi and the Bridge Group, and you wait, like we used to always wait for the J.C. Penney Christmas catalog every year, you wait for that report to come out from Trish on what's the state of our industry. So, from your perspective, on the view of an SDR, what have you seen the last couple of months? What are you looking for from conversations to methodologies to conversion rates, things of that nature that some of our listeners will appreciate and calibrate, especially in Q1?
David Dulany (05:57):
Yeah, it's changed a lot in that, if you think about it, even just a few years ago, SDRs didn't have the cadence capability that they have now with the tools that have come out over the last few years, and we've essentially turned them into many spammers. And this is, even if you went back like 10 years, marketing would be in charge of the tools that would automate email and outbound touches like that.
So, we've taken that technology and given it to a very new unskilled people who are just blasting the market with mainly email messages. But now it's going into LinkedIn and any other things, Twitter and any other places where there's executives gathering. So, the point I'm trying to make is that the conversion rate of non-conversational tools has plummeted. You are talking under 5% of emails are even being delivered, let alone being opened by executives.
And you guys probably feel it when you wake up in the morning, you have a 100 emails that actually get to your box, and then you got a 100 emails in your spam that never even get to it. In that spam folder there's some SDR out there going, "Wow. Any minute now Chris is going to reply back to my email and I'm gonna be able to set up a meeting." So, those channels have been so saturated that the conversion rates are abysmal right now.
So, again, people realize that you have to have conversations in the marketplace, and so you have something like ConnectAndSell. And you also have a number of technologies that are being developed that basically put the same spamming capability into the hands of the SDR that are phone calls spammers, basically. So, you can press one button and send 500 phone calls and hope that one of them clicks over, and those are starting to catch on now. So, now that channel's being worked over. So, those are a few of the trends that we see.
Corey Frank (08:06):
Well, that's powerful, because Chris and I have said that to be in the profession today, what a CRO or a VP of sales or VP of SDR, okay, you got to be able to persuade like Atticus Finch, you better be able to write an email like Tarantino, you better be able to perform like DiCaprio, you better be a technologist savvy like a Zuckerberg. You're looking for the unicorns to do all those functions well, right, Chris? And when the root, the lowest common denominator, the epicenter of what we really ask them to do is, just have a decent conversation with somebody that's built on trust and authenticity, right, Chris?
Yeah. It's funny that, to go back to the beginning of what I'll call the earliest part of the SDR movement, it was predictable revenue, it was Aaron Ross's book, and basically said "specialize". I used to have wonderful discussions with people about specialization. And as you know, Corey, my background is in building manufacturing systems, and if anything's about specialization of tasks, it's manufacturing.
When you're building a factory or a distribution center or whatever, nobody does everything, everybody does something, and the number of somethings you do is relatively small unless you're building Volvos in 1974 and then everybody does everything and then the Volvos fall apart. So, it's really interesting that what's happened with the SDR function, to me anyway, is it morphed in a truly bizarre way into a generalist function.
So, do research. First of all, identify our market. We have some words, but you go figure out who the targets are. So, do strategic marketing research, do tactical marketing research, got to come up with the people, do organizational analysis, figure out where they are and who's most likely to respond or buy or whatever. Then, do message development, think up what you're going to say to them, and then do it in multiple media.
So, write it in an email, put it in a video, put it on LinkedIn, blah, blah blah, blah, blah. And please, do all of this extraordinarily well and you've been here for a month. So, it strikes me that it's an oddity to me of the SDR function, which is, to me, a dead obvious function. We need human beings to create trust with other human beings because trust is the only thing that takes us forward in B2B because B2B buying is so risky that as a buyer you need to trust somebody more than you trust yourself. So, somebody better start that trust process.
Turns out the main feature they need is to be human, which is something that can't be taught to a machine, and then you need to help them have conversations and then coach them on sincerity and conversational effectiveness and that odd conversation, that ambush conversation.
Then, what we did was we turned around and said, "Yeah, let them do everything," or have them do everything. First of all, do you agree with that assessment? Do SDRs have a lot of different things they're supposed to do, because that's what strikes me.
David Dulany (11:17):
That is spot on, spot on. And I'll flip it around. The number one recommendation that I would make if people were asking is, do not hire five SDRs. First, hire a really good operational person that can connect the dots and set the stage and set the foundation between all the technology and the processes and the playbook to get that in place, and then start to layer on the people that can actually execute on that. And nobody does it like that, but some people do.
But if they have a good sales operations person that has the bandwidth to be able to help the SDRs, then it makes a huge difference. A lot of their time is set to other sales operational activities and not necessarily the SDRs, but if they have a bit of that foundational support. Then, the other point that you made is the specialization of people's focuses, because you have to be able to analyze the conversion rate of what they're doing, which is more of an analytical position.
Then, you have to have someone who can really write effective messaging and help them with the scripts and the playbooks to make sure that they're on point. And even beyond that is an enablement function to be able to have some training. A lot of them get absolutely no training. After a couple of days on the job they're just, like you said, they're set out to do a generalist position with five different jobs, and they really struggle.
The other quick thing is that they only have a short amount of time to produce. So, if they're not regularly setting up meetings and building pipeline, within three months they're put on a PIP and shown the exit after six months of being there. So, they're set up to fail in a lot of cases.
Does that mean that if they succeed, they're shown the exit in eight months and they're sent off to be a [inaudible 00:13:17] AE?
David Dulany (13:18):
Well, they're promoted.
One exit for another.
David Dulany (13:23):
So, the economics are tough. Salesforce.com, they have somehow worked out this assembly line of getting the brightest applicants in, getting them into a great SDR function. It makes sense financially. Then, they're either up or out. And they've got this machine set up, and it's worked for a number of years, but a lot of companies try to replicate that, and like you said, they end up with a generalist who's really not very good at anything. And if they can somehow figure it out, they hang on long enough to get promoted to be an AE or in a different position in the company. But a lot of people unfortunately are either let go or managed out or stuff like that.
Corey Frank (14:09):
Well, the downside of that is, it's these large organizations that probably have that type of structure, David and Chris, from a Salesforce or Zoom, et cetera, these larger organizations, that they get the best and brightest, is from a client perspective, we don't have any continuity from an account management perspective. I don't know how many different Salesforce introductions for, "I'm the new Arizona territory manager," that I've had between Zoom or Outreach or Salesforce just in the last three years.
So, internally that may make sense, but customer-facing, I'm thinking, "Gosh, you guys got a hell of a lot of turnover. What's going on over there?" And it may be upward a turnover, it may be not necessarily the wrong kind of attrition, but from a customer perspective, there's not a lot of continuity and knowledge transfer there.
David Dulany (14:56):
And the prospects don't like being qualified by somebody and asked a bunch of questions and then they finally get to it and then they get on another call with an account executive and they have to answer all the questions again. They're, "What did I spend half an hour with the other guy for?"
Corey Frank (15:11):
I think we have about 20 episodes on the proper way to conduct a discovery call. It is not for you as the seller to discover whether you have any money, whether you have a fit for me, but nevertheless, that's what a lot of folks do, right, Chris?
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From crafting just the right cold call screenplays to curating and mapping the ideal call list for your entire TAM, Branch 49's modern and innovative sales toolbox offers a guiding hand to ambitious organizations in their quest to reach market dominance. Learn more at branch49.com. And we're back with Corey and Chris.
Corey Frank (16:19):
On the flip side though-
David Dulany (16:22):
Somebody has to be prospecting and somebody has to be reaching out and engaging the marketplace constantly to build the pipeline. So, it may not be the best situation on both sides from the consumer and company, but on the flip side, we've got to have three to four X pipeline going into each quarter or we're going to be in big trouble. So, we need somebody doing this.
Well, let me jump in on this with my big question. This has been my question about SDRs forever. I remember going to somebody who's still are our customer. They've been our customer now for nine years. They're the folks I was looking at the data this morning who built a $100 million of pipeline, and about 12 people, two years of talking to people. That's pretty much what they do because they talk to people.
David Dulany (17:09):
And they dominate their market and they're now a public company and they do quite nicely. But I remember asking the head of that group about eight or nine years ago, "How do you actually square the circle on this dual mission?" So, your mission is to identify and groom new fresh account executives to go into the front lines of the business, and to generate pipeline.
And those seem like they're contradictory missions, because if I were grooming account executives, I'd be having them understand the business, understand the customer's problem, learning how to do great discovery calls, getting into the time management that's required to be a great AE, because that's number one, two and three things you have to do as an account executive is manage your time because that's the big hard part. And yet here they are, they're scrambling to make pipeline every day. Don't those seem like contradictory missions?
And she told me, "My number one mission is to identify and groom new account executives. The SDRs are essentially fodder for that process." She didn't say it like that. I said it back to her like that because you know me, I always try to clarify, hopefully. Here's my hopeful clarification, "They're fodder for that process, aren't they?" "Yes."
David Dulany (18:27):
I have a different view of the importance, and I just want your reaction to this, my view of the top of the funnel is, it's your life. In fact, the theory of constraints says your business has one constraint and only one constraint. Now, the only question left for management is, where is that damn thing? Where is the constraint? Because managing anything but the constraint is always wasteful. This is a mathematical truth. This isn't like some Beal opinion influenced by whiskey or whatever.
So, you can't have two bottlenecks, you can only have one. That's what it means to be a bottleneck, something is always the constraint. If the constraint is right there where we apply the SDRs, then wouldn't it make sense to apply the most stable, competent, high performing professionals there and not let them leave, make it worth their while to stay?
To me, it's, the best one I've ever seen, the best I've ever seen, Israeli cybersecurity company selling into hospitals to protect the equipment inside of the patients' room from malware attacks, including ransomware. Can you imagine having your father or your mother or your child, their life literally held ransom by somebody in a foreign country somewhere, could even be in a non-foreign country, but they're foreign to me if they would do this because they've managed to hack into the machines that are keeping that person alive, right?
Well, there are people who do that. There are people on our planet who seek to make their living by holding whole hospitals hostage or individual people. So, this company that we were working with has a way to prevent that. As a great mission, we were really excited by it. They hired three SDRs. The average age, the median age of the three, because there were three, you could compute a median by picking the one in the middle, was 67 years old, one year younger than I am.
So, we had one that was about 60, one that was 67, and then one of them was about 78. The mean age was higher than 67, the median was 67. These three SDRs produced, in five months, 68 million of pipeline, and the company sold for $300 million from a standing start in six months. Now, that to me is the SDR function. That's what it's for. It's for market dominance.
So, if the first part is correct, the constraint's just above the top of your funnel. And if you own that, you characterize it, you know how to invest in it, you can make flow happen, high quality flow happen there, and you can do it sustainably. You own markets. Then, why do we put junior people in that role? That's like asking a junior physician, somebody who's in med school, "Look, my heart is really important, but my brain is an even bigger deal. So, you're the brain surgeon."
David Dulany (21:16):
That's so true. And I think you can sleep at night if you have a healthy pipeline. And the vetting candidates for your AE team and building your sales team over the long term, it's great. And it's been a successful strategy for very successful companies. And I point back to Salesforce because they're the ones that have been huge proponents of this.
But if you have to choose between one or the other, wouldn't you rather sleep well at night and have a healthy three to four X pipeline rolling into the quarter and be able to talk to the board about that versus, well, we just found this terrific SDR and promoted them to be an AE and they're going to be great, they're going to last a long time at the company.
It's just, from a business perspective, I'm with you. The whole thing needs to be professionalized and run in a way that's predictable. That's the dream. And you're not going to do it throwing the program together and hoping for the best, that's for sure.
Or populating it with the least likely to succeed.
David Dulany (22:23):
You go back to recruiting, even the root of the problem is, what's the recruiting process for getting people into the role? How did you end up being an SDR? Not you Chris, but I meet some of these people and it's just, have you ever been in sales? Have you ever sold anything? Have you ever done door-to-door-
David Dulany (22:42):
... or any of that type of stuff? And it's just completely foreign. It's just, where are we getting these people?
We're getting literature majors-
David Dulany (22:49):
... and we're getting Poly Sci folks who can't get a job in Washington because their party out of power. And we're getting a lot of that stuff. We had a guest on this show once and we talked about "hire a grandma". I wrote an article long time ago, 2012 I think it was, that basically said, the biggest untapped resource in the world of modern B2B sales is people at the end of their careers who are retiring, retired, or semi-retired, who would love to talk to people during the day, especially people in the field they came out of. And they're out there.
So, you can't really say, "Oh, they're too expensive," because trust me, down at Quail Creek where Helen and I have got another place, there are out of 2,400 houses, there's probably 1700 women over the age of 65 who would love to have a few conversations a day with folks and ask them if they'd like to have a meeting, and I guarantee you they would be hunter killer head-hunters. There would be 20% conversion rates to be looked at, and they're not going to leave.
So, when I talk to people in Silicon Valley about this, well, as with many topics I talk to people in Silicon Valley about, and remember folks, I am a legit Silicon Valley CEO, but when I talk to people in Silicon Valley about this, they just look at me like, it's not just the two heads and five horns, I'm now up to 16 heads and 18,000 horns. It's, "What is wrong with you? Don't you know that it's all about hiring the youngest most able people you can, throwing them into the thing and seeing if they reinvent whatever?"
And it's, "Well, but we know how to set meetings? Haven't we been doing this for, oh, I don't know, a 100 years or so? Don't we know the craft and the rules of the road for setting appointments? Why are we trying to ask somebody to reinvent that because there are some other tools around that you could use somewhere in the process when we have, I don't know, 25, 30 million people we could draw on who'd be happy to do this job, and they'd stick with you." Again, nobody's listening to me on this one. I'm just saying it's an untapped resource.
David Dulany (25:03):
And I think you hit it right on the head in that you have to look at it from the problem and reverse engineer it back on building the sales development program at your company where the problem is, we need more pipeline, we need three to four X pipeline, and that is the problem that we're trying to solve. We're not trying to solve for the age range of the SDRs, we're not trying to solve for a promotion path, we're not trying to solve for all these things that are just the dogmatic approach of Silicon Valley companies. We're trying to solve for that pipeline problem.
So, let's build the program back from that and really figure out the best way to do that. It might involve plugging in ConnectAndSell, it might involve hiring people that don't fit in the program, it might involve training programs and different things like that. You've got to start at looking at from the position of a business owner versus, okay, we've got some money now, let's just build it the same way as everybody else.
Yeah. Oh, man, what can I say? There is nothing that produces repeated utility more effectively than a flood of money asking you to do what the last person who took money did.
David Dulany (26:18):
Exactly. Yeah. It's almost like you said, they look at you funny when you bring this up, but I think that if you try to go outside of the set Silicon Valley playbook, you're looked at a little suspiciously because it's, wait a minute, you're not following the benchmarks and the plays that have rocket-shipped these other companies from the last few years. So, they look at you funny.
And that's one of the things with running a business, being a business owner and not having any investment funds, you look at things completely different than I think if you're a 25-year-old tech genius who just got a big funding round. So, you've got to look at it from a business owner perspective.
Yeah. Well, you don't get a lot of that from sales leaders because they're only going to be there for 17 months. So, when you meet a-
David Dulany (27:10):
Sales don't stick around, yeah.
... you meet a sales leader on average, just random, and eight and a half months left in their job.
David Dulany (27:17):
They're actively looking two months from now. So, short timer doesn't even cover it, as long-
David Dulany (27:26):
That's true. As long as you get a 1.5 to two years at a place, you can be at five different companies in 10 years, or whatever the math is, and nobody looks at that funny. So, you're just surfing the wave of company to company, picking up some equity and a nice fat salary, and do what everybody else does. Then, you come in, Chris, and you're, "Hey, sensibility and logic, and my pipeline reports behind me," and they're just, "What? I don't get it."
Corey Frank (28:03):
How much of that is just lack of proper structure? We always say here that structure precedes culture. You can't have culture without a proper structure otherwise it's playtime with the ping pong tables and the unlimited PTO and the pre-lunches and the perks, and people try to force-feed the culture, particularly they dumb it down to the lowest common denominator, "Hey, I have a bunch of young people who are BDRs, so let's make the place fun." And it's just adult daycare. I think everybody really-
David Dulany (28:33):
That sounds awesome, dude. I want to work there.
Corey Frank (28:36):
Well, the Google offices with slides in the office, it's, "Come on, be a grownup. Can you just be a grownup and handle..." It doesn't mean you can't have fun, but I think that pervades it a bit why if you had a BDR manager who's a couple of years removed from being a BDR themselves, now they have to hire someone who is a rent-a-grandma or hire a grandma, hire somebody who had this esteemed career in software. I think that's probably part of the chasm there. Wouldn't you guys agree?
David Dulany (29:09):
Yeah, big time. Talk about going out of the norms, if you were a 25-year-old BDR manager and you walked in to the VP of sales and said, "I just hired a 65-year-old lady in Arizona to do our calling," that would be an awkward conversation. The other quick thing that you mentioned is, with all those ping pong tables and foosballs and everything, you're seeing the flip side of that right now because there's massive layoffs happening in the SDR world. And I think we're flipping to more of what Elon Musk is doing at Twitter now of the grownups are taking over going, "Wait a minute, what's going on here," and making big changes. So, that kind of thing can't last long in a more difficult economy it seems.
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