Almost everyone who works with an external lead generation agency or SDR outsourcing provider has a bad experience. SDR and lead generation agencies suffer from massive churn rates. In many cases, customers only stick with them for three or four months before leaving.
A SaaStr survey by Jason Lemkin showed that only 7% of companies said SDR outsourcing worked well, and 26% said it “sort of” worked.
Building an internal SDR team isn’t easy either. Many companies, especially during the first year or two of getting a SDR function up and running, have experiences equally as bad internally when building their own SDR teams. Typical issues include making the wrong hires, insufficient management time to train and coach SDRs, and high SDR churn rates. Setting up and running an SDR team is simply hard.
The real problem
We’ve spoken to scores of founders, CROs, and revenue leaders who’ve tried SDR agencies. Most of them say the same thing: they either got no meetings, or if they got meetings they were booked with either the wrong people, the wrong companies, or attendees turned up for the wrong reasons..
Why does this happen? It’s rarely down to just one thing. There are factors on both sides – the agency and the company.
Before you set up a SDR function: key foundations
Whether you’re building an in-house team or working with a provider, a few things need to be in place within your company before you put in place SDRs.
- Product-market fit
You must have achieved some level of product-market fit. This means having a relatively well-defined product or service that’s well-packaged, and having 10 or more similar-looking customers who are paying you for it.
If you’re still figuring it out, it’s likely too soon for SDRs.
- Clear Ideal Customer Profile (ICP) and buyer personas
It’s important to know precisely the types of companies and individuals within those companies who will reliably buy your product. Without this clarity, pointing SDRs in the right direction and achieving good outcomes with an SDR team becomes very difficult.
- A clear definition of what a “qualified lead” looks like
A clear idea of what a good lead looks like and what counts as a valuable meeting. If that still needs defining, then your SDRs won’t know what they’re aiming for. SDRs are there to scale what already works, not to figure it out from scratch.
If these foundations aren’t in place, it won’t matter whether the team is in-house or outsourced. Neither will be set up to succeed.
Reasons SDR agencies struggle to deliver results
Around 90% of the companies we speak to say they’re not satisfied with their current or past SDR agency. Here are the most common reasons why:
- Poor onboarding process
A critical factor is the quality of onboarding. A good cold call that books a qualified meeting usually lasts 4-6 minutes. But that’s just the tip of the spear.
To have a credible and effective conversation, SDRs need a playbook that provides a clear framework to work from. This includes a strategy, a clear ideal customer profile, detailed buyer personas, a detailed value proposition, great messaging, and objective lead qualification criteria.
Agencies often skip the foundational work of building out a comprehensive playbook and try to do low-cost and quick onboarding. Without it, SDRs can’t be correctly trained and enabled, and won’t properly know who to target or what to listen for and say.
- Rep quality, onboarding and training
SDR outsourcing often fails because companies don’t properly onboard and set reps up for success. That’s on the SDR agencies for not having a proper and robust onboarding process in place.
The second reason is the quality of the reps that they hire. Especially when you’re selling complex solutions into enterprise or mid-market organisations, it’s essential to have people who are intelligent, curious, competitive and hungry.
In some cases, agencies provide SDRs who are working across multiple campaigns at the same time. But if you’re selling a complex solution into a complex organisation, there’s simply no way a rep can effectively work on multiple customers and campaigns.
- Poorly defined lead qualification requirements
If onboarding has been lightweight and it hasn’t been clearly defined what a good lead looks like, the meetings won’t be meaningful.
On a high level, the SLA for a qualified meeting should be:
“A meeting with the right person (someone matching a defined buyer persona) working in the right company (a company matching very specific criteria) who is turning for the right reasons (to find a solution for a relevant pain point that you solve).”
- Lack of domain expertise
Many agencies adopt a “one-size-fits-all” approach, believing they can support any company in any market. But in domains with high complexity, for example payments, or selling into the office of the CFO at a multinational, deep domain knowledge is critical. Using an agency that understands your market and domain is an important success factor.
- Defaulting to email + spray and pray tactics
Many agencies rely on email and LinkedIn automation, running high volume “spray and pray” campaigns.
For optimal results, SDRs should utilise research driven, targeted outreach that primarily uses the phone. LinkedIn and email serve as supporting channels, but outreach has to be phone-first.
This is also linked to rep quality; many companies use email and LinkedIn because it’s easier to push higher volumes, and they don’t need a rep skilled enough to pick up the phone and cold call.
Setting yourself up for success
When selecting an outsourced SDR provider, spend time understanding their onboarding process, checking the quality of their people, looking at how they qualify leads, and verifying their past experience in your specific markets, verticals, and product lines.
If you don’t go through this process, you may well become part of the 93% who don’t have great experiences.
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