Explainer Guide: Sales Development Services

Sales development services can increase conversion rates by identifying prospects with the highest probability of becoming paying customers. Outsourcing these services allows you to boost production and efficiency in your business.

Sales Development Definition

Sales development involves building an efficient pipeline to move prospects along the buyer’s journey. It identifies leads likely to become paying customers, as they’re easier and faster to convert.

Businesses benefit from sales development by:

Shorter sales cycle: Sales development focuses on creating an efficient sales cycle, allowing easier and faster conversions.

Filling the sales pipeline with qualified leads: Qualified leads convert with minimal effort. Sales development identifies these leads to increase your conversion rate.

Increasing revenue: By focusing your efforts on prospects more likely to become customers, you increase your chances of closing deals.

Boosting brand awareness: Most sales development strategies involve introducing your brand to prospects without previous interaction with your company. By making a positive impression, you can improve your business’s reputation.

Sales development is often confused with business development, but they’re distinct practices. Sales development focuses on the early stages of the buyer’s journey and advancing leads, whereas business development uncovers strategic opportunities and market segments.

Sales Development Services

A sales development team comprises sales development representatives (SDRs) and managers overseeing daily operations. The main service they provide is appointment setting.

Appointment setting is the process that fills the gap between sales and marketing. Its main goal is to identify high-quality leads and book appointments for account executives to close.

The common tactics used for appointment setting are:

Cold Emailing

Cold email is the strategy to engage prospects without previous interaction with your brand by sending emails. The average cold email open rate is 44%.¹ Regular follow-up emails can boost this rate, but sending too many will make your campaign spammy and generate opposite results.

When combined with other sales development strategies and implemented correctly, cold emailing can help you achieve your objectives faster.

Cold Calling

Similar to cold emailing, this process involves calling unknown prospects. It’s commonly used for prospecting, as it helps determine whether a lead fits your company’s ICP.

Cold calling is challenging since prospects aren’t expecting your call. You’ll need highly trained and skilled SDRs to successfully implement this strategy.

In some companies, account executives handle appointment setting and end up getting distracted from closing deals. Building or outsourcing a specialized appointment setting team is a wise solution to efficiently implement this strategy without overloading AEs.

In-house vs. Outsourced Sales Development

You can implement sales development in your company in three ways: building an in-house team, outsourcing specific jobs, or outsourcing the entire process.

In-house Sales Development

Pros	Cons
Better alignment between different departments	Time-consuming set up
Lower turnover rate	Expensive initial investment
Full operation control	No guaranteed success
Better product and industry knowledge

Building an in-house sales development team involves hiring SDRs and managers as full-time employees. The benefits of an in-house sales development include:

Better alignment between different departments: An in-house sales development team can directly communicate with other departments within your organization.

Lower turnover rate: As full-time employees, in-house SDRs have more opportunities to advance in the organization.

Full operation control: You can directly influence strategies implemented by your in-house sales development team. If an aspect of the operation needs improvement, you can immediately roll out changes without having to wait for the next meeting with the person in charge.

Better product and industry knowledge: Full-time employees are more knowledgeable about your business processes, offerings, and industry.

The common challenges of building an in-house sales development team include:

Time-consuming set up: It takes an average of 3.1 months² for an SDR to be fully functional. Finding capable managers to oversee and guide your SDRs is another obstacle.

Expensive initial investment: Building an in-house sales development team entails hiring more personnel and providing them with tools, equipment, and training that can significantly increase your company’s bottom line.

No guaranteed success: There’s no assurance that your in-house sales development team can deliver the expected results. Given the necessary investment, some companies might not have the luxury to take the risk.

Outsourced Sales Development

Pros	Cons
Lower cost	Quality and control issues
Custom solutions	Data security concerns
Access to a wider talent pool
Quick campaign launch

Outsourcing sales development involves hiring a third-party company or freelancer to do specific tasks or take over the whole process.

In 2021, outsourcing became a 246 billion industry.³ 37% of small enterprises currently outsource business processes and 52% are considering it.⁴

Sales development is a perfect candidate for outsourcing because most tasks are repetitive, labor-intensive, and time-consuming. Building an in-house team is not always feasible for businesses, as it requires a large initial investment.

The advantages of outsourcing sales development services are:

Lower cost: Outsourced sales development services are fixed prices or retainer based. You don’t have to pay full-time salaries, benefits, bonuses, equipment, or training costs.

Custom solutions: You can avail of customer sales development services that fit your needs and objectives.

Access to a wider talent pool: Outsourcing service providers have talents with a wide variety of expertise, allowing them to properly execute various sales development strategies.

Quick campaign launch: Outsourced sales development agencies carefully screen and train SDRs. They have teams on standby ready to take on your campaign, allowing them to launch faster.

The major challenges of outsourcing sales development are:

Quality and control issues: Since you are not present in the day-to-day operation, the execution of your sales development strategy might not meet your company’s standard, affecting the outcomes.

Data security concerns: Outsourcing your sales development process means handing potential customer information to a third party. Your company’s reputation can suffer if your data isn’t handled professionally.

Working with a reliable service provider will help you avoid common issues of outsourcing sales development.

Steps on How to Build an Effective Sales Development Strategy

Effective sales development strategies will differ depending on the company’s specific objectives and target markets.

Here’s a step-by-step guide to developing a sales development strategy that works for your business:

Step #1: Conduct a strength and weakness analysis

The first step to an effective sales development strategy is to analyze your strengths and weaknesses. Doing this will help determine which part of your sales process needs to be changed or improved.

You can use the SWOT framework to assess your company’s strengths and weaknesses internally and externally. This analysis will also help you decide whether you should build an in-house team or outsource your sales development process.

Step #2: Define what is a qualified lead

After conducting an internal and external analysis, you’ll need to define what a “qualified lead” means to your business.

The definition of a lead can vary from one company to another, but it generally refers to potential customers. You can sort leads by qualification and interest:

Interest

The categories of leads classified by level of interest are:

Cold Sales Leads: These leads have no previous knowledge about your brand and entered your pipeline through prospecting.

Warm Sales Leads: Contrary to cold leads, these are aware of your brand and what you have to offer but need more information before making a purchase.

Hot Sales Leads: These are sales leads who know your brand and are ready to buy. They are easier and faster to convert.

Qualification

The types of leads according to their qualification are:

Information Qualified Leads (IQL): IQLs are in the early stages of the buyer’s journey. They are not ready to buy but have shown interest in your brand.

Marketing Qualified Leads (MQL): These leads are interested in knowing more about your offerings and are easier to convert than IQLs.

Sales Qualified Leads (SQL): These leads are ready to buy and well-informed, making them the easiest to convert.

Clearly defining your buyer persona and ideal client is essential. ICP represents companies who are more likely to benefit from your solutions, while buyer persona represents individuals who have the highest probability of becoming customers.

Step #3: Establish sales development metrics

Monitoring key sales development metrics allows you to calculate the success of your sales development strategy and find areas for improvement. You can classify the top metrics for sales development into 3 categories: account, financial, and sales pipeline.

Account Metrics

Account metrics will tell you how well SDRs are performing their objectives. Examples of this measure include:

New meetings
Target account status

Financial Metrics

Financial metrics reveal your sales development campaign’s value to your business’s revenue objective. These include:

Average order/account size
Salesperson profitability
Salespeople over or under goal

Sales Pipeline Metrics

The main objective of sales development is to create an efficient sales pipeline that supplies a steady stream of opportunities for conversion. The following metrics will indicate whether your sales development is fulfilling its purpose:

Closing percentage
Sales cycle length
Sales pipeline quantity & quality

Step #4: Determine the tools or services you need

You can boost the efficiency of your sales development strategy by using the right tools. The most recommended ones are:

Customer relationship management tools: CRM tools allow businesses to conveniently organize and track customer information. Examples of top-rated CRMs include HubSpot, Zoho, and Mailchimp.

Email automation tools: These tools allow you to save time and effort when launching an email outreach campaign. Some of the best options are ActiveCampaign, Drip, and MailerLite.

Task management tools: Task management tools can help organize your sales development tasks to ensure efficiency throughout the department. Monday.com, Trello, and Asana are some of the best tools in this category.

Meeting Scheduling Tools: Meeting scheduling tools are beneficial if you have an appointment setting program, as they notify SDRs and AEs of upcoming meetings, ensuring no opportunity is missed. Google Calendar, Calendly, and Acuity Scheduling are some of the best choices for this tool.

Bottom Line

Sales development ensures that your pipeline has unlimited opportunities to convert, allowing you to reach your revenue objective. By outsourcing this process, you can save costs, minimize risk, and let your in-house sales team have more time to do essential tasks for closing deals.

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Sales Development Definition