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The True Cost of an SDR (Sales Development Rep)

sales development rep cost

Traditionally, sales development reps have been the public face for most companies. They are the ones who focus on outbound prospecting, setting up qualified meetings, and moving leads through the pipeline.

Many different expenses come with hiring a new sales development rep. There are the hiring costs alone, not to mention base compensation, additional commissions, benefits, and travel.

These costs add up quickly and the truth is, it takes a long time for the sales rep to begin to repay the company and even longer for the company to break even on its investment. It has been estimated that the average cost of hiring a new sales development rep is $100k.

The Bridge Group and For Entrepreneurs surveyed 342 B2B SaaS companies and found a growing shift within their sales organizations. Their data showed that the average turnover rate of an SDR is 34 percent and nearly two-thirds of that number was voluntary.

The True Cost of Losing a Sales Development Rep

There are many different reasons why a sales development rep might leave your company. Some may get recruited by another organization, others may be underperforming and you have to let them go, and others may transition to a new career entirely.

Regardless of the reason, anytime a sales development rep leaves the company the consequences extend far beyond the sales team alone. A high turnover rate can hurt the entire organization because it has wasted significant amounts of time and money on that person.

Then there are the intangible losses to consider; continually losing team members is demoralizing to everyone in the company. Hiring a new employee is not only expensive, it’s also time-consuming.

It takes a lot of time and energy to interview new employees, check their references, file the paperwork, and train that person. And it is impossible to know what kind of effect a high turnover rate has on your customers.

Not to mention, a high sales rep turnover can have a snowball effect on the rest of the team. The team is continually performing below capacity and the hiring manager is always scrambling to bring on new people. The problem is, the hiring manager isn’t hiring for growth but is simply trying to tread water until they can get the newest person up to speed.

A Better Solution

There are a number of tips we could give you on how to improve your SDR turnover rate. We could make suggestions on how to hire the right people, how to improve your employee onboarding, and how to train your reps to perform better. But even if you did all of those things it could just end up being more time and money down the drain.

And what if the real problem is that the model of building an in-house sales team is simply no longer viable for most companies? What if we told you there was a solution that costs less money, consistently delivers results, and that it wouldn’t require building an in-house sales team?

At Pipestry, we saw the writing on the wall when it comes to in-house sales development reps. This is why we developed our own sales development team that will help you accelerate your sales pipeline. We will research your leads, manage their objections, and schedule meetings for you.

We will write copy and reach out to every lead six or more times per day via email, social media, and direct mail. And we do all of this at a fraction of the cost of your average sales development rep. Contact Pipestry today to set up your trial account.