US and EU regions are known to have several cultural differences influencing businesses as well as many other fields. Sales strategies don't skip this cultural gap and differences have emerged, especially after the beginning of the 2000s.
The major shift consists of a more specific job division inside a typical American Sales team: a sort of Fordism/ Taylorism applied to Sales.
This model was created and popularised by Salesforce.com and then written about in a very popular book by Aaron Ross called Predictable Revenue. Ross worked in San Francisco in the early 2000s and helped develop this model, which according to Ross helped to generate over $100M in new business in 3 years.
Predictable Revenue is today referred to as the "Sales Bible of Silicon Valley", with many techs and SaaS giants adopting it successfully since then. (Here a video book summary on Youtube).
Predictable Revenue is today referred as the "Sales bible of Silicon Valley"
Note: for B2B prospecting methods and cultural differences, check this other article: Technology sales in the US vs EU - what works and where
SDR/AE/CS: what's that?
A typical American Sales team is divided into three main roles:
SDR - Sales Development Representative These qualifying representatives work off a targeted list of potential prospects to develop new sales opportunities from cold or inactive accounts. They spend their time researching prospective companies, identifying leads within these accounts, contacting these leads, and qualifying them. When communicating with these leads, personalization really improves results. Holborn Consulting is an SDR firm - click here to learn more about What's a Sales Development Representative
AE - Account Executive (aka closer) These are quota-carrying reps who receive hot prospects from SDR and work them until they close the deal. It is often recommended that closers stay in touch with new customers, after the close, throughout the setup and launch process to ensure a smooth transition.
CS - Customer Success (retention and growth) These reps launch new clients and assist them with their ongoing requirements to promote satisfaction and success to ensure renewals. Their goal is to help their customers get more value from their product through hands-on help, education, and training. They perform all the retention processes and pursue cross-sell/up-sell opportunities to grow their accounts. They do so through a variety of methods such as email, phone calls, web presentations, and social media. Below are the most common titles for this position:
Back to the SDR/AE/CS model (aka the American model)
The premise of the SDR/AE model is simple: If you break the sales job/process into two distinct parts SDR (Sales Development Rep) and AE (Account Executive) it allows you to train for specific skills and therefore increase efficiency in hiring, training, the sales cycle, etc.
The SDR focuses on finding, engaging, and creating qualified leads and then "hands" them to the AE to complete the sale. The SDR/AE hand-off model ensures sales teams have enough leads and that only qualified leads get to the AE’s who can then spend their time working on closing the sale.
Moreover, the SDR/AE model is more prone to scalability (e.g. through outsourcing the SDR process), a winning factor for a high growth tech firm.
The European approach: one representative covers it all
By contrast, the European standard approach gives prospects a single person to handle the entire process: from start to finish. In this context, Sales reps source, engage, qualify, demo, and close contracts. The main advantage of this model is the absence of "hands-off": meaning the necessity for a client to interact with different players along the customer's journey.
There is one (big) downside to a "One Rep strategy": companies spend much more time on-boarding and training Sales reps than it would take to train an SDR. To manage a full customer cycle, firms have to train a sales team to a higher level of knowledge and capability, this just takes longer.
Companies spend much more time on-boarding and training Sales reps than it would take to train an SDR.
As a general rule of thumb, a "One Rep" should be trained for at least four weeks before picking up a phone or sending an email. Moreover, he/she will continue to go through additional training as they settle into their territories.
This focus on training and management of a full sales cycle involves some delays in the sales ramp-up: generally going from start date to full monthly quota attainment in 4-5 months.
Conclusions: what's the best model?
Short answer: it depends.
The SDR/AE approach uncovers as much as possible about the prospects' pain, business processes, and needs. This "discovery" process puts a sales company in a better position to make the initial sale larger, especially for firms with an adequate average selling price (ASPs).
For more about this topic check: SDR/AE will NOT work with my business model
Since the early days of the industry when giants like DocuSign, NetUpdate, and Microsoft were making their debuts as companies, the SaaS space has become a key area for IPOs and billion-dollar companies. Adyen, DocuSign, Dropbox, and Spotify, to name a few, are all recent examples of companies built from the ground up and which became integral to the lives of their customers.
However, it should be noticed how a majority (68%) of the top SaaS companies to IPO came from the West Coast of the United States, which comes with little surprise to anyone.
A majority (68%) of the top SaaS companies to IPO came from the West Coast of the United States
This last data clearly indicates which Sales Model is becoming the new best practice in the sector.
About Holborn Consulting
Holborn is an SDR advisory boutique in London, specialized in supporting high-tech firms in the B2B market development.
Main services include Lead Generation, Business Development Outsourcing, Market Research, and New Market Entry services.
Note: This article was also published on Medium -
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