My last post dealt with five successful ways to deploy BDRs/SDRs for an organization. Use case #3 was inbound lead catcher. With this strategy, a BDR processes inbound leads and moves them to the next stage in the buyers journey. This post deals with understanding the capacity requirements to successfully implement this approach.
When BDRs are used as inbound lead catchers, while it adds cost to the sales and marketing system, the efficiency it provides as a definitive checkpoint in the buyers journey is invaluable. Lead catching BDRs provide marketing a process check point to get inbound leads moved over to sales in a logical fashion.
If you are going down the BDR staffing path, the next logical question is how many BDRs are needed? And most important, what is their quota?
BDRs are generally goaled on generating meetings or other handoff points to the sales team in use case #3. For the purpose of this exercise, assume that BDRs are tasked with generating meetings that from experience convert at a 50% rate to opportunities. If marketing must deliver an opportunity creation target, then backing into the required number of meetings for a quarter is the first step in determining capacity.
Using some round numbers, if marketing must deliver $10M in new opportunities for a quarter, at an average contract value (ACV) of $50K, then marketing needs to get 200 opportunities created by the sales team. If we assume 50% meeting to opportunity creation, then marketing needs to generate 400 meetings in a quarter that convert at $50K ASP and 50% conversion to opportunity.
How many BDRs are needed for 400 meetings?
This depends on the quality of the leads and numbers of leads a BDR can handle in a week.
Let’s assume a BDR can process 50 new leads per week. Processing a lead means receiving the lead, maybe looking it up on linked in, writing a custom note, adding notes to salesforce. Remember, in addition to these new leads, the BDR is also working leads from the prior weeks. If you do a 4 step process over the course of 4 weeks, 75% of the BDR’s time in a given week is actually working the prior weeks leads. Factor in scheduling time for meetings, and 50 new leads per week might not be far off. What is your number for what they can handle? For this exercise, we will assume 50.
Now let’s assume numbers of 50 leads per week, that results in 200 leads per month. How many meetings does this represent?
This is where leads quality comes into play. If marketing delivers leads that convert to meetings at 10%, then you would expect your BDRs to deliver 20 meetings per month. Our goal was 400 meetings for the quarter, or about 135 meetings per month, or about 7 BDRs.
What about the required BDR quota? The math would say a BDR should be goaled at around 20 meetings per month. You can try to set the goal higher, but the math doesn’t support them being able to attain this. That is why setting BDR quota should only happen once you understand the volume and quantity of leads.
Let’s look at a worse case scenario. What if the lead quality was actually 2% meeting conversion instead of the 10% mentioned above? With 50 new leads per week, you could expect your BDRs to only generate 4 meetings per month or 12 meetings per quarter. To hit that 400 meeting goal, you would need 34 BDRs. Wow! If your ACV is $1M, that might work. Otherwise, you are upside down. You could still set the BDR quota at 20 meetings per month, but your BDRs would have to be awfully good at recognizing the Glengary Leads and would ignore the rest to get the required yields.
Lead quality is crucial with BDR operations!
To summarize, marketing needs to understand the amount of meetings or other hand-off events required in BDR operations. These events represent that quota for the entire BDR team. To figure out numbers of BDRS required, you need to start with the lead quality and BDR lead capacity per week. From these two numbers, you can determine what a realistic BDR quota could be for lead quality.
Of course, none of this addresses how many actual leads now need to be generated. The key is to keep BDR staffing levels and quota in balance with the number and the quality of leads.