Here is the formula for scaling your BDR team:
That looks pretty nasty! But it’s not. Let’s break this down line by line to see what goes into it and how all these key metrics combine to calculate your BDR number:
- You start with your bookings goal which is the magic number you’re trying to hit. It is the reason you are hiring in the first place.
- That is multiplied by a buffer. Adding an extra 20% buffer on top makes your bookings goal the lower bound of what you can achieve with your new team.
- That number is divided by your win rate, how many deals your team closed. By dividing your goal by your win rate you get the value that’s needed in your pipeline to achieve your top line goal.
- That number is then divided by your average deal value, telling you how many opportunities are needed in your pipeline to hit the goal.
- Dividing that number by the quota (in opportunities) per BDR tells you how many BDRs you would need, at maximum output and maximum efficiency, to hit your goal.
- Because you might also be sourcing deals not just through your BDR pipeline, you need to multiply that by the percent of the pipeline sourced by the BDRs.
- Finally, the whole thing is divided by the average quota attainment of your BDR team to account for less than peak efficiency.
This formula has taken you from high-level bookings goal, through pipeline needed in value to pipeline needed in opportunities. From there, it breaks the number into how many opportunities a 100%-sourced, perfectly efficient BDR team would need individually, before taking into account bookings from elsewhere and less than peak performance.
This might still seem daunting, so it’s easier to understand and calculate if instead of numerous divisions, you use reciprocals and multiplication. Multiplying by one over the number is the same as dividing by it:
Example: How Many BDRs Do I Need To Hit A $1M Goal?
Let’s run through an example using realistic numbers to see how this would work in a real sales operation.
Most of these numbers are going to depend on your own sales operations. They can be separated into three components:
- Goal. Your bookings goal and the buffer to make sure you overestimate.
- Business choices. Decisions you’ve made in your team, such as quotas and BDR sourced pipeline.
- Key metrics. Variables that are dependent on your sales process such as win rate, quota attainment, and deal value.
Within InsightSquared, you can easily pull these key metrics into your dashboard to help you populate the equation:
So let’s use these numbers along with some averages from the industry to run through how this formula works to give you your ideal BDR team size for the next quarter.
- Bookings Goal: $1,000,000.
- Buffer: 20% (In the formula, this is written as 120%).
- Business Choices
- Individual BDR Quota: 45.
- BDR Sourced Pipeline: 40%.
- Key Metrics
- Win Rate: 25%.
- Average Deal Value: $7,500.
- BDR Team Quota Attainment: 60%.
Pumping those numbers into the above equation:
Therefore, you need 9.48 BDRs in total to hit those numbers. Unfortunately, you can’t hire 0.48 of a rep. You could round up or round down to hit an integer, but better still is to adjust your goal to get a more realistic number.
To do that, you need to reverse the formula so that one of the initial variables becomes the output. For instance, if the Bookings Goal became the output, the above equation would look like this:
We can then see what our goal would be with these metrics if we had 10 BDRs available in our team:
With a nicely rounded 10 BDRs on your team, you can increase your quarterly goal by over $50,000. Reconfiguring the formula like this can show you exactly how adding each extra BDR to your team increases your possible bookings goal:
With the above metrics, each BDR added to your team can increase your bookings goal by $105,000.
Using This Formula To Drive Improvements
Looking over those metrics, one thing should become clear: you can influence how many BDRs your team needs.
All the numbers used to calculate your BDR count are under your control. Some of these are through business decisions. You can change what your quarterly goal is, or increase the opportunity quota for each individual BDR. These are quick changes you can make and you should play around with different options to find the right balance for your needs.
Let’s look at what happens if we start to play around with each of those numbers:
- For every $100,000 you increase your bookings goal, you need ~0.95 more reps.
- For every 5% you decrease your buffer, you need ~0.4 fewer reps.
- For every 10% extra pipeline you source from your BDR team, you need ~2.3 more reps.
- In this formula, if you increase the quota from 45 to 50 deals per quarter, you need ~0.95 fewer reps. But because it is a denominator/reciprocal in the formula, changing the BDR quota is non-linear. Adding a further 5 deals from 50 to 55 to the quota only decreases your BDR count by a further 0.77 reps. This return continues to diminish so that doubling the quota to 90 only reduces the BDR count by ~4.7, as opposed to ~8.5 if it was linear.
But you also have a more subtle way of influencing the outcome of this equation. You can improve each of your key metrics. In fact, the formula should be one you continually revisit whether hiring or not, just to determine the current efficiency of your BDR team. This formula can be used as a driver for improving efficiency within your team.
All these are non-linear changes so it is important to find the correct balance for your organization. For instance, increases and decreases in win rates and attainments can have drastic effects on how many BDRs you need to hit your goal:
If your BDR team quota attainment is at 10% you need a staggering 57 BDRs to hit your goal. In this case it is obviously far better to improve your team’s attainment stats than try to hire 60-odd BDRs. They are not going to fix your company. But at the other end of the spectrum, improving your win rate from 90% to a perfect 100% will only decrease the number of BDRs you need by ~0.3. Chasing that marginal gain might be a step too far.
However, these small gains in key metrics can drastically affect your company and your hiring.
In the above example, we needed 10 BDRs to meet our goal with the current key metrics. But if we improve each of those metrics marginally, we can pull that number down:
Improving win rate by 1%, increasing the average deal value by $500, and raising quota attainment by 5% pulls the number of BDRs below 8. You’ve saved 2 base salaries plus commissions only through being more efficient. These type of changes are entirely achievable through better coaching and processes.
Scaling + Optimization = Growth
There is more to scaling a great BDR team than just this formula. You need to plan ahead so that there is ramp time, onboard them effectively, and make sure your sales goals tally with your marketing goals.
But this is a great start. This formula allows you to quantitatively discover how many BDRs you need to maximize your sales process and hit your future goals for revenue and growth. But it can also tell you more.
It allows you to dive into how well your team is performing and see how key metrics align in your current process. Through this quantitative analysis of your BDR team, you can find out exactly how you need to scale for growth, but also how you need to optimize for growth.
Then with both scale and optimization, your BDR team can own the top of the pipeline, find great leads, and drive the rest of the company towards success.