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Sales Development: SMB’s Secret Sauce in Revolutionizing Revenue Generation

The estimated reading time for this post is 6 minutes

In the dynamic landscape of small and medium-sized businesses (SMBs), the need for effective revenue growth strategies is critical. Mid Market Private Equity Investors navigating the competitive market understand the significance of sales development in advancing these businesses towards sustainable success. This article delves into the transformative role of sales development, offering insights and strategies that can redefine the revenue trajectory of SMBs.

Unlocking the full potential of revenue growth requires a comprehensive understanding of sales development and its tailored application in the SMB realm. Private Equity Investors, seeking not only profitability but sustainable and scalable growth, will find this exploration invaluable. From optimizing lead generation to building robust sales pipelines, the journey to revolutionize revenue begins with strategic sales development.

Understanding Sales Development in the SMB Context

Defining Sales Development for SMBs

Most owner-led SMBs do not specialize their sales operations like what is commonly found in VC-funded SaaS software organizations.  In most cases, the “sales team” is responsible for proactive prospecting, lead nurturing, pipeline management, new client onboarding and follow on account management.  

While I’m traditionally not a fan of these VC-fueled sales motions (because they’re often incentivized for the wrong behaviors), there are some general approaches that are best practices that can easily be adopted in owner-led SMBs.  For Sales-led organizations, it’s clear that in order to create new client acquisition velocity, you should specialize your sales personnel into at least three functions:

1. Prospect Development

2. Prospect Management

3. New Client Onboarding 

Because when one person is responsible for all of these functions (as is true in most SMBs), one function will suffer from neglect at some point in time and it’s usually the function that has the highest level of resistance, in this case, Prospect Development.

Prospect Development is the process of continuous focus on new client outreach either from inbound inquiries or outbound outreach.  You may have heard of this title as the BDR or SDR (I’ve even heard or XDRs) function.  This title came into fashion almost 15 years ago via’s approach highlighted in Aaron Ross’s book “Predictable Revenues”.  Sales development, in the SMB context, is more than just acquiring customers; it is a holistic approach encompassing brand recognition, lead generation, prospect qualification, and expanding customer relationships. It’s about creating a seamless flow from initial contact to conversion.

The Primary Goal: Proactive Lead Generation

As I previously mentioned, proactive lead generation (prospecting) is rolled into the main sales person’s role.  And in most cases, it’s the function that faces the most internal resistance because “normal” people still are listening to their mommy and not talking to strangers.  But despite what the Social Selling and Inbound Marketing Gurus state, material transactions happened because someone interrupted a prospect, asked them if they had a problem similar to their peers and then proceeded to help them fix the problem that was costing them tens of thousands or millions of dollars.  

Unfortunately, because of this natural resistance to prospecting, your all rounder sales person will stop doing this “hard” work as soon as they have enough deals in their pipeline that needs to be managed or new clients that need to be onboarded.  As a result, your sales team travels the road of “feast and famine”, or rides the roller coaster of pipeline growth and depletion or lives in Zombieland with deals that are stalled or going nowhere fast.  As the owner you can’t live with these cycles because they create uncertainty in your production and supply chain.

What you and your investors want is the holy grail of new client acquisition: a Proven Repeatable Sales Process (“PRSP”).  

PRSP not just about casting a wide net. Your Sales and Marketing leaders should emphasize precision over volume using an account or persona-based approach. Employ data-driven approaches to identify and engage potential clients, ensuring that every outreach aligns with the business’s unique value proposition. By focusing on quality over quantity, investors can cultivate leads with higher conversion potential, maximizing the return on investment in the lead generation process.

Secondary value: Effective Qualification

According to Chet Holmes buyer’s pyramid found below, less than 10% of your addressable market is in the buying window right now (we’ve actually proved this to be the case with multiple clients).  This doesn’t mean to imply that you should give up any outreach to the total market, but rather, that you should expect that your outreach will fall on “deaf” ears almost 90% of the time.  And our experience suggests it’s because 60% of your market doesn’t understand the problem because they’ve not yet faced it directly.  So if you’re merely addressing the top 10% you’re missing the 60% for whom it’s only a matter of time when they’ll experience the pain of the 10% and decide to take action.

Buyers Pyramid

Therefore, qualifying prospects are more critical for SMBs than ever. Owners and Investors should guide their SMBs to implement qualification criteria that sort the market prospects into their various timing categories thereby, ensuring that resources are allocated to prospects with the highest likelihood of becoming long-term customers. This targeted approach not only optimizes resource utilization but also sets the stage for more meaningful and enduring customer relationships, a key driver of sustained revenue growth.

A Bonus: Customer Relationship Building

As we described in a post about contact data quality a few months ago, according to the Bureau of Statistics, over 50% of employees resigned or were fired from their employment in 2022. Thus, in the SMB space, relationships matter. Sales Leaders at SMBs to go beyond transactional interactions and cultivate relationships by understanding the unique needs of each customer and delivering personalized experiences. Building trust and loyalty fosters repeat business and positive word-of-mouth, establishing a foundation for long-term revenue growth and brand reputation.

Think of Sales Development as the reconnaissance team that provides the rest of your revenue operations actionable intelligence as the nature of personnel changes or strategy shifts that are taking place inside your existing Enterprise accounts.   They can also be used to create further expansion into additional departments, divisions or subsidiaries of existing clients because, for the most part, it’s a lot easier to sell into a sister division or department of an existing Enterprise customer than to land a new one (I could go on about this for a long time, but I won’t).

Lastly, your Sales Development team are the forward group that are interacting with prospects at a human to human level every day.  So if your team acts with humility, humanity and expertise then this reflects back to your brand value.  

Concluding Thoughts

If you’re running a mid-market company/SMB or thinking of investing in one, then give serious attention as to whether the proactive prospecting or Sales Development function has been created.  When this function exists and is running optimally, you’ll find that your sales revenues will ramp to predictable levels of highly qualified and curious prospects and have strong brand associations and relationships that generate recurring revenue.

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