Building a small sales development team from scratch will cost your organization about $11K per SDR per month during the first year.
Most organizations underestimate the true cost of building this function, and overestimate productivity benchmarks and ramp time. This happens most often due to lack of experience, or outdated ideas of what it takes to be successful today.
So, let’s look at the true cost of today’s SDR during the first year…
It’s important to remember that these first year costs, are what’s required to build a sustainable operation that is outfitted with the proper training, tools and experienced management. From there, costs will only go up, as you grow and develop each rep and provide increases to base salary and other compensation. There are always areas to cut costs (i.e., lower compensation, skimping on technology, etc.), but most will end up costing the organization more in the form of higher turnover or poor performance.
And it bears mentioning that these costs tend to be the same whether you choose to build-it-yourself or opt for fully-managed, outsourced services. High performing outsourced services can’t avoid these costs either, but they benefit from experience, economies of scale, and being able to focus all of their efforts on doing one thing successfully – building and ramping SDR teams. They can often start up quicker, and have the experience to overcome the myriad challenges that can arise.
Whether your organization chooses a DIY or outsourced approach, start with the right expectations of first-year cost.