Revenue Interview Series #4 | Building Outbound Business Development for the first time

Bootstrapped VSaaS businesses often lack a sophisticated – or any – outbound sales motion. These businesses add customers via a product that solves a burning problem in their niche; the market pulls product out of the business, CAC’s are low, and payback periods incredibly fast.  

Another common reality is the classic founder-led sales motion, which is outbound in a sense, yet totally unscalable. Founder-led sales motions work (up to a point!) because of a founder’s network and irreproducible depth of insight into their market. 

Whether purely via word-of-mouth or founder-led motions, all VSaaS businesses we’ve seen reach an inflection point where they must develop a deliberate outbound approach to extend growth curves.  

Inbound channels (including channel partners) in tight vertical markets typically reach a level of saturation such that available inbound volume cannot support sustained growth rates. When a company is spending on rich content, product-led engagement or SEO in competitive markets the incremental return on the next dollar of spend is no longer capital efficient – the cost per lead becomes too high. Or, even worse, there simply aren’t enough buyers who are willing to engage through these more passive channels. 

This installment of our Revenue Series walks through common questions we hear from Founders contemplating adding an outbound go to market motion, specifically relating to the Business Development role: a sales professional who is 100% focused on generating net-new-customers leads for the sales team through direct outreach to key buyer personas within your Ideal Customer Profile (ICP) .  

We believe a BDR function should be considered as a VSaaS business is approaching $3M in ARR. At this scale, the company has clearly achieved product-market fit and demonstrated an ability to onboard new customers at scale. There’s no sense in investing in BDR resources if you are still trying to optimize your ability to win with founder-led sales. We also suggest hiring BDR’s in pairs. This allows the business to measure performance, double the return from onboarding efforts, provide a teammate to learn alongside (more on this later) and increases the odds of coaching-up one productive BDR given that anywhere between 40%-60% succeed over the first year in their seats.  

The BDR role is metric-driven, and success is quantifiable. Once onboarded, the role should be self-funded, with the team generating incremental sales pipeline to cover their costs. Remember, for a BDR to be worth the investment, you must see incremental uplift in funnel with each new hire (with one exception being if a founder is pulling completely away from sales in order to address another area of the business).  

BDR’s future success can be well measured via leading indicators of success. This is done by focusing on the inputs (activities) and outputs (opportunities or pipeline created) that lead to revenue over the course of a sales cycle.  

Inputs : 

Outputs : 

Additional Quality Measures: these are additional KPI’s to monitor on a monthly basis to ensure you are building an efficient machine that isn’t solely reliant on steadily increasing volume targets to reach targets: 

Every BDR can control their inputs; Outputs and conversion metrics of various sorts will depend on both 1) the market and 2) the employee in question. The trick is to understand a base rate for #1, so that you can rate #2. 

This is a common hold-up for founders and CEOs alike. They fear that their product can only be sold by a salesperson who has 25 years of industry experience or comes from the company itself. If this were true, there would be no salespeople succeeding in VSaaS contexts, or at least it would take two decades of experience to be able to scale a growing team.  

The reality is that BDRs can be successful in nearly every market by focusing on and owning a specific part of the sales motion, namely, first to identify a potential challenge faced by an ICP prospect and then second, to progress an initial email or phone call into a more formal and scheduled conversation for the prospect to meet with a senior member of the revenue team.  

Yes, BDRs need to understand basics of their market and the product. Yes, over time you will coach them to become more autonomous and experts in the market to gradually outgrow their role and take on a new one inside your business. But BDRs are not required to grasp the functionality of the product to the depth that sales engineer, implementation or support teams are. Nor should they be expected to run the sales process from start to finish. To use a baseball analogy, BDRs are your “leadoff hitter,” or for track and field fans, they are the first leg of your 4x100M relay team. A BDR’s job is to get the process started, to set the table for the future success of their teammates.  

The market for BDR-focused tech and data tools has grown considerably in the last decade. We’ve yet to see in the coming year or two if most of those tools are providing real ROI. That said, getting started requires only a couple of key items.  

Here are the non-negotiables: 

CRM : a CRM must be seen as the source of truth. Any of the quality cloud CRMs on the market work. Do NOT build your own tool or jerry rig your own product for the task. The short-term cost savings you imagine will never appear, and in the long run you will end up changing anyways. Once you pick and implement a CRM, CEO’s need to adopt the mantra, “if it is not in the CRM, it never happened” in order to ensure you get the most out of this investment. It is where KPIs, metrics and performance will be monitored and measured. The pulse of your revenue-generating activities. 

Process “Bible”: Once the business agrees on the process and workflows for the team, document it with clarity and make it accessible to all. We suggest a single Word document – it need not be complicated. Contained in this document are the KPIs, reports and metrics the team adheres to; how they are defined and measured; and the ways in which the sellers (AEs and BDRs) must log, track, interact and schedule their days.  

A revenue team is like any other team-sport and requires consistency in their approach to have collective success. 

Account & Contact data : This is information you will use to populate your CRM, which the BDR’s will leverage in their outreach activities. At a minimum, you should be able to procure a list of prospective customers to load into your CRM and populate the records by size, industry, geography. You should also strive to obtain individual contact info for each customer, such as name, title, email and phone numbers. Depending on your industry, you may be able to obtain some of this information for free from trade groups, trade shows and public research or purchase detailed lists from industry consultants. Generic third-party data providers (e.g., Apollo , Lusha , ZoomInfo ) can help unlock high level information on companies by industry segments. You can also utilize contract resources on platforms like Upwork to do some basic industry research at a very low cost. The key is to provide enough information for a BDR to spend the majority of their time on revenue generating activities as opposed to research figuring out who and how to contact. 

Optional – Orchestration tools: While we are advocates of these sorts of tools, these investments are safest made once the viability of the function and its processes are proven. These tools, such as SalesLoft and Outreach.io, are used to measure and determine where success is coming from and automate certain aspects of the workflow to amplify activities and increase output. But again, they only make sense once you’ve established the viability of the BDR function. If you’ve built these teams before or have perfect confidence that you can implement teams at a positive NPV, then go for it. 

First, establish who is going to own the BDR coaching efforts. Ideally this is not a seller who is already carrying their own quota. Don’t distract them.  

For a typical bootstrapped, founder-controlled business with under 30 employees, the Founder is typically the right coach and manager the first couple of BDR hires, but every situation is different. 

Here are some examples of how to effectively split up training, both in terms of content and who leads the sessions.  

Don’t succumb to the temptation of letting a new BDR figure it out own their own or approach you or your CEO for help. That is too much to ask of most people.  

The first 30 days should be structured with clear time blocks and sessions focused on: 

These topics only start to unpack how to successfully stand up an Outbound function. Amongst a host of other areas, building a successful BDR function also involves answering questions like: How do I set a quota? What are the right targets for each metric or, how do I provide a professional development roadmap for these BDRs?  

Andrew and the Arcadea Value Creation Team are happy to discuss these sorts of questions in greater detail.  

Feel free to reach out to Ryan Beaver , MD, Value Creation, to discuss or learn more.