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An Investment in Top of the Funnel Sales is the Best ROI in Sales

4 min read
Updated Aug. 24, 2020
Published Apr. 20, 2016

They were fighting like Democrats and Republicans in the months leading up to a presidential election. The funny thing? They actually worked for the same company! I was attempting to conduct an ordinary sales call, but had caught myself right in the middle of a catfight.

Their argument? Should sales development reps should ask for permission for the call or should they just assume it? The women on the phone said, ‘NO.’ Her colleague emphatically said, ‘YES.’ Neither would give in. Ironically, as smart as they both were, neither actually had data to know who was right.

A year later, I decided to physically relocate my office to the SDR room at Salesloft. Now I got to hear all of the cold calls live. I found myself frequently thinking about SDR cold call openings, and their prospects’ responses and objections.

Creative cold call openings started to burst in my mind like popcorn at the movie theatre. I wanted to share all of these ideas with my team, but I had one problem:

How could I avoid being like one of those arguing managers and determine, for a fact, whether these ideas worked?

Then I had my aha moment: I would create call workflow to record which call openings we used, and then analyze effectiveness.

At the same time, we were starting to build our critical SDR metrics. With the science of sales development in mind, I came up with a new question:

Does a business create more ROI by investing in top of the funnel sales (TOFU) over bottom of the funnel (BOFU) sales?

My hypothesis was YES.

I knew it was more effective for most companies to invest in ‘tofu’ over ‘bofu’ for the following reasons:

  • There has been less focus and prioritization on ‘tofu’ and the SDR movement meaning there is more ground to gain.
  • Being more effective in ‘tofu’ flows through to the end of the funnel because it meaningfully improves key business metrics like cost-of-customer acquisition and pay-back period.
  • ‘Tofu’ teams are typically more junior in their careers and have more ground to gain in a shorter period of time.

All signs point to the fact that you should invest in top of the funnel over bottom of the funnel, but how do you do it?

What metrics matter for SDRs, and what can they adapt from AEs?

I learned the important metrics and concepts of traditional selling early in my career. They’re simple:

  • The concept of an “opportunity”
  • Their goal
  • Sales cycle
  • Win rate
  • Deal size

There is a parallel for each of these in SDR, but most people don’t consider them.

1. With the account based sales development movement, the concept of an “opportunity” for traditional sales is the same idea as a “target account” for sales development. They represent different levels of qualification, but they both represent the target of attention for each rep.

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2. We can draw a parallel in AE vs SDR goals, as well. Traditional AEs have the goal of a “closed won opportunity,” just the same as SDRs have the goal of a “qualified op on a target account.”

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3. How do we know if a traditional seller is efficient? We look at their closed won “sales cycle,” or how long it takes for ops to close. The SDR equivalent to this is the timeline it takes to move a target account to a qualified op. This is known as “SDR conversion cycle.”

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4. What about effectiveness? For traditional sellers, we look at their win rate, or what percentage of their ops close. The SDR parallel to this is the percentage of target accounts that convert to a qualified op, known as “SDR conversion rate.”

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5. The last piece is event economics. Traditional AEs could close large percentage of a large number of ops quickly, but still not hit quota. That’s where deal size makes a difference. What’s the equivalent for SDRs? It’s $ Contribution to pipeline.

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So here’s the summary:

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These should help you set your SDR goals and focus. By funneling your sales investment dollars on improving these metrics, you could be making the greatest investment in your business this year.

For a more comprehensive look into Salesloft’s internal SDR process, download the second section of our newest playbook trilogy, The Sales Development Playbook: Executing. In this section, we share the ins and outs of efficiently using Salesloft to call and email prospects. Download our free white paper and optimize your sales efforts to start crushing your sales development goals today.