Stop practicing bloodletting on your SDR org

This is the TitanX newsletter, where GTM is built on conversations, targeting, phone intent, and, of course, Precision Dialing - Read more.

Predictable Revenue was published 15 years ago. Some of its lessons have aged well. Some haven't. And the ones that haven't have become so embedded in how orgs are built that nobody stops to question them anymore.

That’s bloodletting.

You know: that “medical practice” thousands of years old where a so-called doctor would make you bleed your own blood to try to heal you of just about any illness.

It is bad. Obviously.

We all know it’s bad because medical science exists and all the real doctors (AKA not quacks) realized that it was harmful and based on… nothing, really. Superstition at best.

So it fell out of fashion around the 1920s.

Up until that point, it was taught to medical “professionals” for thousands of years all over the world.

They did it in ancient Egypt. Then it spread to Greece, where they started to believe that having too much blood was the cause of just about every possible illness.

There was zero. Evidence. It. Worked.

Even after science was a real practice, medical schools kept teaching bloodletting as if it were the best thing ever, precisely because it was so old it predated the science.

“Doctors” even killed George Washington after draining 6 pints of his blood in less than a day because he had a sore throat. True story.

As The Blood Project notes, Washington’s doctors “believed they were saving him.

They were not.”

I don’t take issue with all of it. Aaron Ross nailed a LOT of great concepts for pipe gen, and in theory predictable revenue is workable. It has been the blueprint for how just about every SaaS business built their sales organizations ever since.

But it’s been around so long that its lessons have:

Ultimately, those who hire-and-fire SDRs, equip them volume-based tactics, then wonder why they’re burning cash without ROI…

…they’re just like Washington’s doctors. They believe they’re saving revenue.

But they’re doing just the opposite.

It’s time for an update, if not an overhaul.

Our Founder & CEO, Joey Gilkey, offered a new prediction for the fates of the 4 main SDR org archetypes recently.

He said (and he’s right) that every sales and biz dev org is sorting itself into one of four archetypes/buckets by the end of this year, defined by how they respond to poor SDR function ROI:

Two of these buckets are the outbound equivalent of bloodletting and will be extinct by the end of 2026.

One bucket isn’t bloodletting, but it’s also the medical equivalent of, “don’t go to the doctor, if you don’t like bleeding.”

Which does prevent you from bleeding, but is still stupid. Rather than bleed out quickly, you just starve slowly.

(s/o Harry Sims)

Only the organizations in one of these buckets actually use science and logic to fix the problem and introduce new “treatments” that make the SDR function worth it.

The good one (Bucket #4 if it’s not obvious) is where you want to be. But Joey’s observations about what is happening to the other three can actually tell you a lot about how to avoid bleeding your org to death.

This is the fastest-growing bucket right now. And it's the laziest.

SDR function isn't producing? Cut it. Try to make up the difference "somewhere else." Somewhere else never materializes.

I talked to three companies last month who cut their SDR teams entirely. It was the same root cause in each case: reps were having just 2-3 conversations per day. At that level of conversation density, you can't iterate on messaging, get better at objection handling, or ramp new hires as quickly as you should.

You can’t generate enough pipeline signals to know if your ICP is even right, let alone support the growth needs of the business.

Bucket 1 leaders look at the symptoms and conclude the function is broken. Which is correct.

But they never take even a second to diagnose the bottleneck, which is obvious once you take even a passing glance at conversion rates on all activities from an outbound team:

Clearly the biggest constraint is right up at the top where you send 96 dials into thing air.

When your reps spend 80%+ of their dial time calling people who will never answer, AND you assume (wrongly) that the problem is unfixable, then yeah:  the SDR function looks like it will never work.

But you’re also being lazy.

Some SDR orgs just won’t survive. They'll either deliberately transform themselves or passively fall into Bucket #1 and die a slow death.

What’s keeping them from tipping into the promised land of Bucket #4?

We say “volume is vanity” at TitanX all the time for a reason.

They’re afraid to let go of decisions they made in the past. They’ve got sunk-cost fallacies galore, defensive attitudes, scarcity mindsets, learned helplessness…

So they see their reps having 2-3 conversations per day and instead of asking “why”, they blame the rep, demand more activity, blame the tech, blame the market - anything other than taking accountability.

This is what it looks like before you either choose to solve your problems or you avoid change until it is forced upon you when your entire org just gets axed.

Bucket 2: Headcount scaling with extreme diminishing returns.

Add more bodies, plan for more attrition, use brute force and hope that economy of scale is something that applies to outbound sales (it isn’t).

This is why, industry-wide right now, sales team costs are up 67%, reps take 35% longer to ramp, and 65–88% of them still miss quota.

Hiring reps into a 3% connect rate environment means you're scaling dysfunction. Every new rep inherits the same voicemail problem. The CAC on this model is indefensible at any board table running basic unit economics.

Bucket 3: Activity scaling with diminishing effectiveness.

Even sadder. This is the can’t-add-bodies-so-just-do-more-and-get-a-parallel-dialer playbook.

SDR leaders in this bucket have lost so much credibility they can’t even make an argument for more headcount, so they’re operating totally at the behest of leadership demanding more outputs without more inputs.

It’s a death march.

Their reps are doing 3x the work for 1.3x the results. At least in the short term. After an initial pop, their phone numbers get flagged as spam, their connect rates fall even further, and they burn through their TAM and their reps at the same time.

Both buckets treat volume as the cure for a problem that is caused by lack of precision.

But when only ~20% of any market will ever answer a cold call, more volume just means more waste at higher speed.

Bucket 4 orgs do three simple things, executed with extreme discipline.

1. They treat their team as if they’re the most highly-trained, well-equipped special forces operatives, not just cannon-fodder infantry.

They pay them well and they train them to be elite.

They refuse to add headcount without maxing out capacity first.

2. They operationalize excellence across four pillars: list, message, rep, follow-up. Everybody says they do this. Be honest with yourself, though: you probably don’t.

3. Make conversation density the north star, not meetings booked.

When your reps each have 400+ completed conversations a month, you know which messages are landing, which accounts are actually ready, what incumbent solutions are in place, what buying cycles are, which titles open doors that maybe aren't stakeholders, what the market thinks of your positioning right now, etc.

And of course you get meetings too.

But those other inputs are what you need to actually do that 2nd shift and get operational excellence as a system.

Sales teams at these companies use Phone Intent scoring — our proprietary behavioral scoring system — to identify which contacts in their prospecting lists are among the 20% who will ever answer a phone call.

They use that information to avoid wasting time calling the 80% of any given market that will never pick up the phone.

vSimple jumped from 6–7% to 32% connect rates overnight, with one in every three dials resulting in a conversation with a qualified prospect.

Landbase increased demos by 68% in two weeks. They went from 50 demos to 84 demos in the same window during their pilot.

The mandate hasn't changed. Scale revenue without scaling headcount. Every CRO reading this has heard it from their board.

The only variable that will ever make the math work in your favor is conversation density. More conversations per rep per day means faster ramp, sharper messaging, better pipeline quality, and smaller teams that outproduce larger ones.

Bucket 4 orgs understand this, so they don't chase more dials or waste cash on more reps who can’t perform. They chase more conversations from the dials they already make.

Your org will move toward Bucket 1 or Bucket 4 in the next 12–24 months. Bucket 1 is the default if you just let things happen to you. Bucket 4 is a choice you can make.

Thanks for reading,

Evan Dunn (LinkedIn)

P.S. What do you think SDR quota should be (as a multiple of their base or OTE)?

Working on another upcoming edition and would love your take on what’s right. Reply right here - I read every response.