Your SDR team is hitting their activity targets. Calls are being made. Emails are going out. Meetings are being set. Yet somehow, your Account Executives are frustrated, and pipeline quality hasn't improved.
Sound familiar?
Your SDRs aren't the problem. They're performing exactly as they've been incentivized to perform.
If you measure SDRs on meetings booked, they'll book meetings. If you pay them per appointment set, they'll set appointments. And if those meetings don't convert? Well, that's someone else's problem.
The issue isn't motivation or effort. It's that the incentive structure is fundamentally misaligned with the outcome you actually want: closed revenue.
Most SDR compensation plans look something like this:
This seems logical. After all, an SDR's job is prospecting, not closing deals. Why measure them on outcomes they don't control?
Here's why: because what gets measured gets managed, and what gets rewarded gets repeated.
When SDRs are compensated purely on meeting volume, they optimize for volume. They'll:
None of this is malicious. It's rational behavior responding to rational incentives. If you're paid to set 8-10 meetings and you've set 7 by the end of the month, you're not going to risk disqualifying anyone. You're going to get those last two meetings on the calendar, even if they're marginal.
Your AEs then waste hours on calls with unqualified prospects, deals stall in discovery, and your pipeline becomes bloated with opportunities that will never close. Meanwhile, your SDR gets paid because they hit their meeting target.
This problem compounds exponentially when you outsource your sales development function.
External appointment-setting firms are compensated per meeting or per lead. They have no visibility into what happens after the handoff and no stake in whether deals close.
Their business model is simple: maximize the number of meetings they can set in the least amount of time. Quality becomes a nice-to-have rather than a necessity.
Even well-intentioned outsourced partners face this structural problem. They're running a volume business. The firm that sets 100 mediocre meetings will always outperform (financially) the one that sets 30 excellent meetings, unless the client has the sophistication to measure and demand otherwise, which most don't.
You end up paying up to $500 per meeting for appointments that your AEs could have set themselves by randomly cold-calling the phonebook.
If you want quality leads, you need to measure and reward quality, not activity. Here's how forward-thinking sales organizations structure SDR compensation:
Instead of paying SDRs purely on meetings set, offer commission on deals that close from their meetings. This doesn't have to be the full AE commission rate, even a small percentage creates alignment.
Example structure:
Suddenly, your SDR has skin in the game. They'll ask tougher qualification questions. They'll prioritize high-intent prospects. They'll care about whether the AE actually closes the deal.
Track and report on what percentage of SDR-set meetings result in:
Make these metrics visible. Celebrate SDRs with high conversion rates, not just high activity counts. When the entire team sees that Sarah's meetings converted at 40% while John's meetings converted at 8%, behavior changes fast.
Typically, SDRs want to become AEs. Make it clear that promotion is based on demonstrating the ability to identify and qualify high-value opportunities, not tenure or meeting quotas.
When your top-performing SDR sees that the path to AE isn't just "set meetings for 18 months," but rather "prove you can consistently source deals that close," you'll see a dramatic shift in how they approach prospecting.
The SDR role is hard. Keeping a high performer in role for more than 12 months can also be achieved by establishing levels to the SDR role based on performance consistency, conversion percentages, etc.
SDRs need to hear what happens after the handoff. Institute regular sessions where AEs provide feedback on meeting quality:
This isn't about blame. It's about learning. When SDRs understand why certain meetings convert and others don't, they get better at pattern recognition. They start self-correcting.
External firms can't do this effectively. They're not in your sales meetings. They don't hear the objections. They don't see which messaging resonates. That institutional knowledge stays inside your walls only when your team is inside your walls.
Here's what happens when you align SDR incentives with revenue outcomes:
Immediate impact:
Long-term impact:
Compare this to outsourcing, where every meeting costs you up to $500 and you accumulate zero knowledge, zero culture, and zero talent pipeline.
You can't outsource quality. You can only engineer it through proper incentive design.
If your SDR team (internal or external) is measured on meetings, you'll get meetings. If they're measured on revenue contribution, you'll get revenue.
The choice isn't really about in-house versus outsourced. It's about whether you're willing to structure compensation and measurement systems that reward the behavior you actually want.
Many companies won't do this because it requires rethinking their entire SDR model. It's easier to keep paying for meetings and complaining about quality.
But if you're serious about building a high-performing sales organization, start by asking: what are we measuring, and what behavior is that measurement driving?
Then fix the incentives. The behavior will follow.
Incentives drive behavior. Skills drive results. And right now we're offering free access to 3x3 Research© from our Fearless Prospecting© training; a technique that teaches your sales team to find and use 3 unique pieces of research on prospects quickly and efficiently.
What's included in the training:
The result? Higher response rates, better conversations, and meetings your AEs actually want to take.
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