We’ve seen a great deal of uncertainty regarding the future of the ‘XDR’ and what AI development will look like for sales professionals. The SDR (Sales Development Representative) is the term generally used for inside sales representatives who deal with inbound leads, whereas the BDR or business development rep is tasked with outbound; commonly XDR is used as a catch-all for both roles.
In this essay we’ll look back to the conception of the SDR, what the future holds for the XDR role, and what AI can do for XDRs and the AEs (Account Executives) they support. We will look at Aaron Ross’ Predictable Revenue, and re-contextualise it with Justin Michael and Tony Hughes’ Tech-Powered Sales (part of Michael's JMM Trilogy), to understand the original impetus for the creation of the XDR, and evaluate how it will pair with AI technologies.
The concept of the SDR emerged in the early 2000s as a response to the increasing complexity and specialisation required in the sales process. Specialised Business Development Associates and Sales Support Associates had been doing third-party work offering highly qualified appointments at “boutique” firms for Fortune 500 tech and financial services companies as early as the 1990s, but the differentiation of the new role was first elucidated in Predictable Revenue by Aaron Ross of Salesforce. Ross defined the SDR as a “Cold Calling 2.0" or “outbound” sales rep”, clarifying that they “are specialised, just generating outbound leads,” and “neither close deals nor qualify inbound website leads.”
Initially, Account Executives (AEs) handled the entire sales cycle—from lead generation to closing deals. However, as businesses grew and competition intensified, the need for a more focused approach to prospecting and lead qualification led to the creation of the SDR role.
By offloading the initial stages of lead generation and qualification to SDRs, AEs could concentrate on closing deals and nurturing relationships with high-potential clients. Historically, roughly 20% of the meetings SDRs set become qualified opps and another 20% of those close. However when the AE sets a discovery meeting, 45% of those become qualified opps and 40% close. The whole point of the SDR role was to get the AE the right amount of qualified opportunities in a cost efficient way.
The problem had become that from a financial perspective, hiring expensive salespeople with poor pipeline wasn’t the answer - Ross’ idea of adding new qualified sales opportunities from cold companies and passing these qualified opportunities to quotacarrying salespeople to close, without having to rely on cold calling, was revolutionary at the time.
Predictable Revenue’s groundbreaking assumptions, that “Experienced salespeople are terrible at prospecting”, “Experienced salespeople hate to prospect”, and “Even if a salesperson does do some prospecting successfully, as soon as they generate some pipeline, they become too busy to prospect,” justified the outsourcing of the labour intensive drudgery of prospecting to the less-experienced and skillful XDR, freeing-up time for AEs to do what they do best, actually close deals (the point is now being made for AIs to do the hard work of data entry etc.)
In 2011 when Predictable Revenue first came out, Ross’s foreword was indicative of an optimistic economic climate - he asks whether, if you “could implement an enjoyable sales process that can generate a predictable flow of highly qualified sales opportunities, month after month”, without having to make another bad cold call, you would?
Compare this to the situation in which we find ourselves in 2024, and it’s easy to see why sales leaders are eager to sound the death knell for XDRs. Merely 10 years after Predictable Revenue, Justin Michael wrote memorably in Tech-Powered Sales that “The job of SDR had become one of listening to Spotify while cruising around Navigator (building lists and endlessly researching), using LeadIQ or ZoomInfo to batch load into sequencers, and then utilising some crowdsourced templates.” This is increasingly the case in 2024, and SDRs equipped with sophisticated stacks and endless templates happily spray-and-pray their way to uncertain commission. Michael continues, “People were treating the phone like it was covered with spiders, fearing rejection or suffering from performance anxiety in wielding their voice.”
Back in 2011, Aaron Ross had written on the necessity of a change in the sales structure, and his insights are golden, with many eerie similarities today!
There is a growing argument that having field salespeople do cold calls means having your highest-cost (per hour) sales resource perform the lowest-value (per hour) activity, and that
relying on the least experienced, least resourced, and least supported members of the sales team to handle the responsibility of opening deals, may not be the most effective approach!
Sales teams that experienced tremendous growth and success as recently as 2023 are now confronted with new challenges. As costs rise and returns diminish, along with a less-than-optimal customer experience, the drawbacks of the SDR role outweigh its advantages. Let’s have a look at the 10 years between Predictable Revenue and Tech-Powered Sales to predict what the next decade will look like for XDRs.
In 2013-14, SDRs got turbo-charged with platforms like Outreach, Salesloft, Groove, and XANT. These platforms empowered SDRs to automate and optimise their outreach effort, by increasing efficiency and effectiveness in leadgen and appointment setting. However, with the democratisation of outreach automation tools, this period also saw a proliferation of what's now referred to as the 'spam cannon' , whereby SDRs could automate quantity, but SEPs didn't address quality.
By 2017, Forrester had highlighted a significant shift in buyer behaviour, indicating an increasing buyer preference to not meet with sales reps in person (20%), which by 2020 was as high as one in three. The result was an increase in multichannel approaches and providing value and insights to prospects, leaning into buyer's engaging on their own terms.
The COVID-19 pandemic accelerated this change, with "Seventy-five percent of buyers no longer see the value of interacting in-person with salespeople.” Instead, “Buyers want an automated demo in lieu of a demo by a sales rep" said Tony Hughes. For SDRs this meant prospecting changed, as everyone was working from home, inboxes were flooded even more, and many companies failed to adapt to remote working.
Back in 2011, Aaron Ross had written RIP Cold Calling, not unlike we might write RIP SDRs now! The reasons were such:
Buyers are sick of being sold to, and become more resistant every year to classic sales and marketing methods, such as pushy cold calls or generic marketing materials.
Sales 2.0 technologies, both of CRM systems and Sales 2.0 applications, make it easier than ever to take the guesswork out of implementing, executing and auditing the ROI of a prospecting methodology.
More accountability on marketing budgets…. Every project is scrutinised: “What’s the ROI? How do you know?” Executives want proof of revenue generated.
Instead, Ross proposed the genesis of a new type of prospecting which he imaginatively called Cold Calling 2.0, although it didn’t actually involve cold calling. For this he recommended:
Develop respected experts: The Sales Development role is often treated within a sales organisation as a low-level job. If you treat it that way, you’ll get low-level results. It’s a challenging and often thankless role.
Qualify accounts and contacts before calling: Spend serious time on identifying and clarifying your Ideal Customer Profile. Define what companies are the most similar to your top 5-10% of your customers… and develop focused target lists based on these tight criteria.
Research rather than sell: When reps do call into cold accounts, rather than cold calls, make “research calls.” The intention is different… a rep simply learns about the company and whether there is even a potential fit or not.
Blackberry-sized emails: Avoid sending long sales emails that no one reads.
Go beyond basic SFA: Leverage your sales force automation (“SFA”) systems in every way possible
It’s interesting to note that some of this advice is commonplace, (establishing oneself as a thought leader is very much in vogue, as is brevity in cold emails) whilst the idea of SDRs qualifying accounts to be passed onto the AE was an innovative way of specialising the role.
When Ross writes that “Buyers are sick of being sold to” and are increasingly resistant to “classic sales and marketing methods, such as pushy cold calls or generic marketing materials”, this is even more so the case these days! The merest whiff of a templated email, or the lingering smell of sales breath, is enough to have your communication swiftly ignored.
Given that buyers have grown increasingly immune to generic outreach (email open rates have dropped by 15% over the past two years, underscoring this trend), leading to fewer quality meetings, impacting revenue, and Customer Acquisition Costs (CAC) payback.
Moreover, whilst SDRs typically dedicated much of their time to building accurate databases and manually reaching out to prospects, advancements in data accuracy and productivity tools have turned them into outbound efficiency machines, and AI tools that facilitate prioritisation and automation have practically eradicated resource constraints!
InsideSales.com has shown that AI can increase sales productivity by up to 50%, highlighting the profound impact of technological advancements on SDR roles.
Moreover, technological improvements have enabled more precise scoring and prioritisation of accounts and leads, and the focus should now shift to generating quality opportunities—best achieved by AEs. Research by Salesforce indicates that high-performing sales teams are 2.3 times more likely to use AI in their processes, emphasising the need for updated productivity metrics. Accenture reports that AI can increase lead generation and qualification by more than 50%, highlighting its transformative potential for the industry.
Cold outreach through emails and phone calls has seen a decline in conversion rates, whereas warm outreach grounded in buyer intent has proven more successful. Modern buyers prefer to conduct research, test products, and engage with sales reps when they are ready. According to the Demand Gen Report, 67% of B2B buyers rely more on content and research than they did a year ago, making it clear that informed and warm outreach is the way forward.
The transition from traditional workplace settings to remote work has impacted SDR productivity as well. Phone outreach conversion rates have decreased, and office-based SDRs continue to be more productive - a study by HubSpot revealed that remote sales teams saw a 26% decrease in productivity compared to their in-office counterparts.
In the past, boosting headcount in a territory was effective for customer acquisition and growth impressions. But today, CFOs scrutinise every expense closely—52% of CFOs are prioritising cost reduction measures, including workforce reductions, as shown in a PwC report.
Today's SDR or full cycle AE is bogged down in endless research and list building. The mental impact of being swamped in CRMS, switching over UIs, constructing and refining lists can’t be overstated - recent studies confirm only about 31% of their time is even spent selling.
Whilst Ross’ PR aimed to eradicate the cold call, it remains the most immediate way to qualify and book, but XDRs are resorting to low-friction channels like email. The result is the confounding silence of the modern day sales floor. With only 2 or 3% of phone calls answered, XDRS sales development leverage email cadences (templated loosely automated) as the primary channel and those that would call, hit voicemails and EAs all day long.
2023 was a challenging year for salespeople, with 236,835 employees laid off in the tech sector alone, according to Layoffs.fyi. The Future of Sales predicts, "By 2025, 80% of interactions buyers will have with salespeople and their companies will be digital. In most cases, the first interaction will be digital”, as per the buyer’s desire. almost all of the decision-making process is already conducted by the time of the ZMOT - a whopping 93% of B2B purchase processes start with an online search and 94% of B2B buyers research online before finalising a purchase.
Given these developments, it’s not too surprising that sales leaders are curious about the future of the AE/SDR model, as AI promises to fulfil more and more of the roles which an SDR would typically perform. As PeerSignal's survey found, only 9% of people believe the AE/SDR model, as Ross conceived of it, will carry on in its current form. The majority (53%) anticipated a future where AEs and SDRs work alongside AI, acting as specialised assistants in the sales process. While 32% see a future where AEs leverage AI tools independently, a minority (6%) worry that AI will replace both sales roles entirely.
While predictions of a SaaS price-correction are consistently vehement, last year the average SaaS portfolio shrank from 291 apps to 269, just a hair under 8%.
Indeed, the average stack size for SMBs with 500 or fewer employees is still 162 apps. For mid-market companies with 501-2,500 employees, it’s 245 apps. Yes, these are down by 6% and 4% respectively, year-over-year, but this is nothing given the pessimism in the market.
The current AI sales and marketing tools can now be enhanced to accurately prioritise and recommend accounts based on existing customers, enabling personalised outreach by gathering relevant data and context. These advancements allow for the conversion of these interactions into qualified meetings, which could essentially mean eliminating the necessity for an AE to rely on an SDR. Instead, they can rely on an intelligent assistant that identifies and contacts the most suitable buyers at the optimal time, continuously improving its capabilities with each interaction!
A Gartner report underscores this, predicting that "by 2022, one in four B2B sales organisations will replace their traditional sales models with AI-driven selling strategies." As the landscape continues to shift, relying on intelligent assistants like Super Benji could become the norm, making cumbersome manual processes a relic of the past.
Then again, if pundits are to be trusted, we might soon see the development of AI which crafts other AI, or an entire ecosystem of AI selling to each other on behalf of their ‘humans’.
While current AI can generate impressive cold outreach messages, it requires human training to understand psychological triggers and elicit responses. Identifying your Ideal Customer Profile (ICP), understanding their pain points, and incorporating these into your outreach strategy and your AI tech stack would be a cutting-edge addition to your sales workflow, but throwing money at marketing tech and sacrificing efficiency for effectiveness has just thickened the “sea of monotony and mediocrity”. Instead, equipping creative humans with incredible leverage is set to overturn the structure of the sales process.
Klaus Schwab describes the Fourth Industrial Revolution as the fusion of physical, digital, and biological worlds, impacting all disciplines and industries. Predictable Revenue aimed to create a sales assembly line, but the relentless noise and sheer number of marketing vendors made it challenging to break through. Tech-Powered Sales was published 10 years later and re-evaluates the methods of PR, demonstrating that traditional sales techniques no longer work. Michael’s conceptual understanding of neuroscience and human psychology means prioritising pattern interrupts to bypass the amygdala of loss-averse prospects.
Although Tech-Powered Sales anticipates a time where SDRs have largely been replaced by AI technologies, he still vouches that we won’t be unable to relate to humans until 2055, which is optimistic for someone whose brain has already been mapped by AI!
So, is the SDR role dead? Not quite. It’s evolving, and with AI like Super Benji on the rise, it’s morphing into a more efficient and impactful function. Embracing AI solutions like Benji may redefine how sales professionals work, paving the way for a future where personalised, valuable outreach becomes the standard. Why not let Benji sniff out the best opportunities for you, and see how he can transform your sales process?
Super Benji enhances the sales process by personalising and streamlining outreach efforts. Using advanced algorithms, Super Benji sifts through various sources like LinkedIn, newsfeeds, and industry papers to find relevant hooks and craft personalised messages that resonate with potential clients.
Super Benji automates the engagement process, allowing sales teams to focus on closing deals rather than the initial outreach. It can research prospects, re-engage with old leads, and identify optimal times for follow-ups, effectively increasing engagement rates and deal values. By automating repetitive tasks, meaning your XDRs and AEs can turn their attention to the most critical parts of the sales process, Super Benji not only increases efficiency but also infuses a human touch into digital communications, ensuring that each message is both personable and timely.
Benji takes away all the hassle of remaining up-to-date with every prospect, brainstorming the ideal subject header and value proposition, and picking the opportune moment for each of your contacts. Benji patiently follows all of your contacts like a dog with a bone, and sniffs out the personal updates which triggers him to draft an ultra-personalized and impactful message which uncannily matches your tone of voice.
With Super Benji, the future of sales is here, and it is smarter, more efficient, and more personalised than ever before. Embrace the future of sales automation with Super Benji and transform your sales strategies to achieve remarkable results. No one should have to work like a dog, except for Benji.
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