Part 2: Restructuring sales | The revival of predictable revenue 🧟

Part 1: Restructuring sales | The death of predictable revenue 🪦

In 2025, it's not just about driving the highest values or response rates. 

It's about driving the highest value of pipeline for the lowest cost.

It sounds painfully obvious. You’re probably thinking, “of course I need to drive pipeline for the lowest cost.” But over the past few years, the second half of that sentence has been playing a very background role. 

I've spoken to hundreds of outbound sales teams over the past 10 years, and 90% of those outbound sales orgs are not thinking about the cost of what they're doing anywhere near enough.

I.e. Don’t we comp the BDRs/BDR managers/sales managers on number of meetings booked, value created, sales, accepted leads? There’s no hint of CAC in the targets whatsoever.

Smart companies have often set those targets, working back from the CAC. But the people doing the jobs are optimizing for the wrong things. 

They'll go and buy tools, A, B, and C to improve a response rate without thinking: does the improved response rate cover the cost of the tool?

We need to start thinking: what is the cost of the pipeline we're driving? For an extra 30% cost, would I accept 5% more pipeline? 

Marketing and demand generation are certainly used to thinking in this way. They're really comfortable being told, “you need to drive 100 leads this quarter”. They're comfortable knowing (or estimating) the cost of cold, outbound events and direct mail, projecting the expected yield from each, and spending their dollars accordingly to drive the most leads for the lowest cost. 

We need to build that muscle into all of the people driving TOFU.

‍

1. The real cost of high volume activity 

‍

Obviously, just paying SDRs less money is not a viable option. 

So what about spending less on the high volume, low yield activities taking up their day? This is where there's efficiency to be had. 

An SDR can spend hours a day researching accounts, personalizing messaging, sending emails, trawling LinkedIn… only to get a 1% response rate. These activities tend to be found in an SDR’s day more than AEs’, because they take place earlier in the funnel. 

Maybe they do better than 1%. A 5%-10% response rate is seen as very good - but at what cost?

As an example, I was chatting to Chili Piper a long time ago (great team with great content). Joey was running a pretty sizable SDR team over there and looking into how much time his SDRs were spending on researching accounts (not even actual enrollments). 

Monitoring it over a quarter, he saw that reps were averaging 2 hours a day just working out who they were going to sell to.

It really shocked me, and I tried to apply some maths to the situation. With an average $100,000 SDR salary ($46 per hour) and records in the CRM and7 sales reps, multiplying the hours spent researching by team size -  I estimated Chili Piper was spending $154,000 per year… just on researching which accounts they should be selling to in the first place.

‍

‍

Although there have been evolutions in the GTM motions we’re following, and in the SDR role specifically, a lot of the principles that Predictable Revenue taught us remain true.

Aaron Ross advocates for predictable TOFU before scaling your sales team. And in order to get to any level of predictability, you need to know how many accounts are actually out there for you to capture.

You might find out there's just not enough accounts out there for you to go and target. You might need to rethink your GTM motion and the amount of time - like Chili Piper - you're spending on account research. 

To solve for both of those things, you want to map your market.

I’ve talked about this a lot in my work with Notion - you can watch our webinar on it here if you need step-by-step help. But in short, mapping your market will tell you:

• The size of the prize available to you
• How many accounts are out there are available to you
• What team size and type you might be able to deploy to capture them
• Which channels you might use for the best return on your dollar spent. 

Importantly, mapping your market also means reps aren't having to find and research and qualify and then close deals. Aaron Ross more recently said, “It’s like telling a sports team: everyone should attack and everyone should defend”. 

Market mapping saves them time, and you money, and it keeps CAC low. 

‍

2. Boosting our results with intelligence 

‍

Mapping our market of qualified accounts can deliver a lot of results - in stark contrast to the resources we now have to pursue them.

So to drive the most efficient funnel that we can and get the best ROI on our spend, we want to focus on the companies who are the best fit for our products and our service today - those demonstrating the greatest need. 

And to do that, you need to know a lot about these folks.

You can manually research this. Our LDR role back in the day was arguably an example of that kind of high volume, low yield activity.

But there’s a bunch of data providers out there - whether it’s GoodFit, ClearBit, or similar - so you can just enrich your data.

These tools initially cost you money, but the freeing up of expensive SDR time should outweigh the investment. You just need to make sure the intelligence you're gathering is actually driving your CAC down, and not just a sunk cost. 

Your data points should either: 

a) Help you prioritize those high fit, high intent accounts, or

b) Help you better segment or message accounts to deliver more relevant touch points to that particular audience.

And last but not least, scoring. And that’s a process in itself which warrants step-by-step guidance, which you can get in webinar-form here.

Essentially, scoring is just a mechanism to help you prioritize and segment really objectively. 

‍

3. The future of SDR and AE roles

‍

A few of my predictions for 2025:

1. We'll see the traditional, predictable revenue SDR:AE model live on for high fit accounts. 

You’re distributing a book of business to your SDRs, who are supported by AEs. Where we expect the performance to be very good, we can offer them a more human/higher cost touch.

2. For those scoring slightly worse, I expect a more programmatic approach will be taken by most.

We still want to target Tier 2 and 3 prospects, because they’re relevant for our business. They can use our product. Sometimes they're just a little bit too small to warrant as much sales time.  

Historically, you might have just been able to run ads at these companies/contacts. Now, we want to map our market, gather intelligence, score the accounts, run that non-human programmatic outreach, and get sales involved when the account engages (i.e. requests a demo, asks a question, or sends an objection).

We’ve got another webinar for you about that exact programmatic process here.

Once they’ve engaged, they’re worth the time spent. They're further down the buyer journey.

(Of course, depending on your GTM motion, you may choose to route those people down an entirely self-serve path.)

3. AI/tech/data will free SDRs from the chains of grinding out high volume/low yield activity. Instead they can focus on speaking to clients, handling objections, and closing deals.

Thanks to AI and programmatic technology, companies can get by with smaller teams, and still achieve a bigger output. And it’s happier, much more rewarding work. 

Perhaps a controversial take on the AE/revenue leader side: I often hear in roundtables the words: “My reps should always prospect.”

I tend to bite my tongue - there are good things about this attitude. You’re building humility into highly-paid sales folks, and you’re keeping reps close to the customer. 

But: your sales reps’ time spent researching is increasingly, extortionately expensive, and it may indicate they’ve failed to properly map the market of qualified accounts (i.e. supply SDRs with the data they need in advance).

We can’t afford this “keep them on the front lines” mentality anymore. But we CAN sympathetically pair humans with automation to work towards those smaller teams with bigger output (especially good for cash-strapped startups), less human exposure to high volume/low yield tasks, and more focus on the activities only humans can do well.

Over the past 8 years or so, full cycle AEs went out of fashion and specialization became a real hot topic. I think we’ll start to see a reversal of that, with more automation at earlier stages in the funnel, and more AEs doing end-to-end sales (if the sales cycle isn’t too long/complex).

In the emerging sales intelligence space, I think we’ll be able to devote a lot more time to the question: “how can we make every single one of your reps perform like the best one?”

‍

4. Putting programmatic into practice 

‍

Start with the cheapest, most scalable touchpoints you can in order to establish your baseline performance. 

1. Take a subset of accounts and run the cheapest campaign possible.

For us, this was a lookalike sequence made up of 6 touches over 11 days, comprising 4 emails and 2 LinkedIn messages. The messaging was simple:

• You are in X industry
• You probably need Y data points
• Can I enrich an account with them?

2. Assess: what’s the minimum response rate? Meetings booked rate? This is your benchmark for “non-human” performance.  

3. Layer on human SDR activities, and assess the ROI positive.

I.e. If I manually write every email, how does my response rate differ? If I add a cold call into that sequence, how much better does it perform?

4. Establish a ratio - tier 1 accounts might warrant 1 SDR : 1 automated activity. Tier 2 or 3 accounts might get 1 SDR : 2 or 3 automated activities. 

When we did this in 2024, we were hitting a 6% response rate, and a 60% meetings booked rate (we were forecasting around 40%) - without any human intervention in the outbound activities. 

Because the programmatic is doing the pre-qualifying, you can even close these deals with full-cycle AEs (no dedicated SDRs). 

The result: massively reduced costs, and a process you can replicate and scale.

“We want to spend the bulk of our time and money on best-fit customers” - that’s not a shocking revelation. But the difference 1% makes might be.  

Say you have 1000 accounts in your market, and SDRs contact these accounts at random with say a 4% throughput or success rate or conversion rate… maybe they get 40 meetings booked.

But if they contact 1000 accounts that have been prioritized based on intelligence (rather than 1000 at random), and we see a 5% throughput or 5% conversion rate from just a 1% lift, you see a 25% increase in pipeline.

(And for what it's worth, you can probably do better than 1%).

Just by prioritizing our time, effort, and spend on the highest fit accounts, we have a phenomenal impact on CAC and efficiency.