the Reasoning for my “Hybrid” SDR Incentive Plan

Most Incentive Plans that I’ve seen for SDRs typically promote quantity over quality (and manipulation).

I’ve seen:

  • Low base pay with no incentive plan, so nobody cares
  • Low base pay plus $3 per lead, which promotes manipulation
  • Low base pay with ranges, like:
    • 20 – 25 Qualified leads per month = $250
    • 26 – 35 Qualified Leads per month = $500
    • 36+ Qualified Leads per month = $750

These plans were not data-driven and created a hornet’s nest of bad behavior at the top of the organizations’ sales funnels by promoting bad behaviors.

The reps I inherited on this team would get a lead in, send a “Qualifying Email,” wait two days, then call if there was no response. They would get responses to emails, though, and they’d consider them to be “Qualified Leads.”

I remember one of the reps, Rebekah, playing on her iPad all day, watching TV shows, and she’d tell me how she: “Qualified 14 leads today.”

Then the sales managers, like Marcia, told me how: “Your team sends us all these Leads and they never even answer the phone, so what’s the point of even having this team?!”

Christine told me how: “We have a great product and closing rates are fantastic when we get it in front of the right people, but the breakdown has always been actually getting in front of them to present.”

(We was talking about converting website visitors into actual sales opportunities).

We fixed it with this incentive plan. I got rid of the reps I inherited, completely broke down and revamped the top of the funnel strategy, hired new team members and provided the training and guidance, and I rewrote the incentive plan so that it promotes and incentivizes the best top of the funnel Stage 1 behaviors for the organization.

I know it’s aggressive as far as potential dollar amount per lead, but it’s data-driven, so it makes it possible for leadership to run a report like this:

There have been 1204 Qualified Leads that my team has processed so far this year, but if you wanted to check on them, where would you even begin?

I would start with:

  • A+ Leads (500+ Clients) = 157 of them.
  • A grade Leads (200 – 499 Clients) = 156 of them.
  • B Grade (10 – 199) = 764 of them.
  • Out of 157 A+ Leads, how many were NBO versus EXP / REN?
    • 123 NBO
    • 34 EXP / REN
  • How many Successful Handoffs have we had all across the board?
  • 381 / 1204 = 31.6% (WHAT THE FFF, right?!)

I introduced “Lead Grading” to [COMPANY], and having access to these insights (even though not fully-grasped onto across the board yet, it seems), is what data-driven sales organizations are doing. Data tracking like this is a gold mine when used right. We can make decisions based on fact and not solely on gut-feelings.

This also makes it possible for us to “put our finger on the pulse” and see how the business unit is operating across Stage 1 / Stage 2 (Pre-sale Relationship).

Stage 1 is locked in here, but Stage 2 is still a bit of black hole.

When locked in all across the board, the organization will have a higher level of accountability and alignment not just from top-down but from side-to-side, too. It all starts with Stage 1, though, which is where I’ve seen a lot of organizations “miss the mark.”

This incentive plan “gamifies” it for my team.

By putting a higher potential value on leads, it motivates them to not let anything slip through the cracks, which is why our Website Visitor > MQL conversion rates are outstanding (32% in July).

They don’t know a Lead’s Grade until they get them on the phone and ask the right questions, and they have to follow and execute on our communication strategies. If they don’t? Then I can take away the Quality Bonus. 99.9% of the time though, they understand the reasoning of our frameworks and execute flawlessly.

The amount available to earn for incentive per month is higher than normal, but it’s minimal compared to what the organization is making on the returns by having a team like this in place.

It also heads off the normal behavioral-type issues you see with SDR-type teams because they have the opportunity to earn enough to at least take their jobs seriously. If the original incentive plan was still in place, I wouldn’t be able to retain quality employees because they’d just work here and go through the motions while proactively looking for employment elsewhere.

Published by Thomas Hurley

I am a father, husband, drummer, boater, marketer, communicator, animal-lover.

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