No More Quotas, No More Commission: Sales Without SDRs with Nelson Gilliat

In this episode of the Sales Hacker Podcast, we have Nelson Gilliat, Demand Generation Manager at Brantr Media and Author of Death of the SDR, a book whose controversial central philosophy we discuss. Join us for a visionary conversation about getting rid of the SDR role and doing away with commission — and what should replace them.

If you missed episode #193, check it out here: Your New 3-Part Framework for Cold Calling with Jason Bay

What You’ll Learn

  • The problems with the SDR to sales handoff
  • The role of prospecting in a world without SDRs
  • A better way to compensate instead of commission
  • What buyer-centric revenue really means

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Show Agenda and Timestamps

  1. About Nelson Gilliat & Brantr [2:11]
  2. Defining a predictable revenue model [4:07]
  3. Why prospecting sits apart from sales [6:59]
  4. The vision for buyer-centric revenue [15:38]
  5. A new perspective on commissions [19:36]
  6. Paying it forward [26:59]
  7. Sam’s Corner [29:04]

About Nelson Gilliat & Brantr [2:11]

Sam Jacobs: We’ve got a great show for you today. We’ve got Nelson Gilliat who’s talking about why he believes that the role of the SDR, the sales development representative, is dead and what we can do to replace the SDR with more full cycle reps. It’s a great conversation.

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Welcome to the Sales Hacker podcast. Nelson is actually a published author. He’s the author of a really important new book called, The Death of the SDR: And the Birth of Buyer Centric Revenue. It’s all about a new way of thinking about how to generate demand and how to make sales and how to close business focused on the buyer, as opposed to the predictable revenue model. Nelson runs demand generation for an agency called Brantr and he’s based out of San Diego.

Nelson, welcome to the show. What’s the premise behind the book?

Nelson Gilliat: The premise behind the book is that the go to market model for most B2B companies nowadays is outdated. That model is the predictable revenue model, which companies operate on to different extents. To the extent that they run it, it’s holding them back. Their growth is worse off for it. It takes longer. It’s more costly. It’s just more difficult. The elements within those companies, within their marketing and sales, that aren’t predictable revenue models, is what drives their better aspects of their growth. That’s where I present an alternative, which is the buyer centric revenue model.

Defining a predictable revenue model [4:07]

Sam Jacobs: When you say the predictable revenue model, tell us what you mean.

Nelson Gilliat: The predictable revenue model is a B2B marketing and sales playbook from the early 2000s that Aaron Ross popularized in his 2011 book called The Predictable Revenue Model. Essentially it was based on his time at Salesforce. It’s a model from 20 years ago that people are still running today, despite changes in how buyers are buying and technology and marketing and sales know-how and all the tools that we have and everything like that.

The model is basically two things. One it’s a marketing thing, and the second thing is a sales thing. Marketing thing is SDRs. In other words, people to do prospecting full-time, rather than sales doing it some of the time, like they used to, they create this new position, take prospecting off of sales’ plate and have that sit with SDRs, which, technically, is a marketing thing. They are generating and qualifying leads for sales, even though it’s very misleading and sometimes called or considered to be a sales gig. The second aspect of the predictive revenue model is the sales assembly line or seller specialization or sales handoffs, primarily the AE/CSM split.

Those two aspects, prospecting/SDRs and the sales assembly line are the two key aspects that I challenge.

Why prospecting sits apart from sales [6:59]

Sam Jacobs: First, what is the problem that separating prospecting from the rest of the sales process creates in your opinion, and then how do you propose to solve it using a buyer centric model?

Nelson Gilliat: I do see prospecting and SDR as the core of the predictive revenue model. The core problem today in B2B marketing and sales not only holds companies back from growth but harms marketers and sellers and their productivity and their fulfillment. As you know, that tenure and turnover and performance isn’t looking too good across the board.

Prospecting is a type of marketing that basically entails telemarketing and what I consider email spam and LinkedIn spam because it is 99% of the time, a sales pitch. “Hey, here’s who we are, what we do. Do you want to speak to sales?” There’s this sales approach to it.

I consider prospecting to be an old school form of marketing, which over time has gotten more and more misaligned with how buyers want to be marketed to and how they consume information. That’s why we see the decline of prospecting, it’s just gotten worse and worse.

Today, the alternative to that is demand gen. There’s this realization a lot of people are having: what do we do now with SDRs? Demand gen is fighting against the predictive revenue model.

The latest figures show that the majority of SDRs are missing quota, struggling. That we all know, especially since COVID that connect rates on the phone were down and email was being blown up and email responses and the efficacy of the channels to book meetings and those meetings to actually hold and convert to revenue is just declining. We all look at turnover for an SDR. It’s something almost close to 40%. Their tenure, the amount of time that they spend in the role is ever decreasing. It could be anywhere from 11 to 12 months. What we often just see anecdotally, there’s a lot of SDR leaders are trying to comfort SDRs with micro promotions and more tools and more training or more coaching, but they’re all just superficial things to numb the pain of being an SDR and they don’t really fix the problem.

There’s a lot of wasted talent. There’s nothing wrong with the talent or the people who are in the role, it’s just the role itself has got to go.

The vision for buyer-centric revenue [15:38]

Sam Jacobs: Fair enough. Let’s shift from the negative to the positive. Introduce us to the beautiful world of buyer centric revenue.

Nelson Gilliat: To focus on the alternative to prospecting, to SDRs, what does modern marketing look like? How do we properly generate leads and qualify them for sales? That’s where demand gen comes in. It’s ultimately about demand gen putting out all that information that used to be tucked away within sales out there on the internet for the buyers to consume, to be made aware of, to become interested and then come to the website. All that information that buyers want, like pricing and the demo recording or a demo environment, maybe a free trial, an explanation of how it works. You put that all on the website, the website is essentially a 24/7 seller.

There’s so many other different plays that demand gen can do, whether it’s partner marketing, influencer marketing, events like fireside chats, panels, conferences, this, that and the other that, again, you record and distribute on social. Community, thought leadership, content marketing on social media, which is a function of demand gen. The stuff that is actually working is what they should be doing in a marketing function without quotas and commissions, which disincentivizes them to do that type of stuff because they just need to push people for a meeting and they’ve got the production quota.

That’s where I see in the future that the SDRs will be, or sales development will be phased out entirely for demand gen, and demand gen will fully own lead gen or pipeline generation.

A new perspective on commissions [19:36]

Sam Jacobs: You mentioned that you don’t believe in commissions. Why do you think it’s a bad form of compensation, and what’s your alternative proposal?

Nelson Gilliat: The way I see commissions, there’s a lot of misunderstanding about it. One thing to understand is a dollar of commission and a dollar of salary and a bonus aren’t equal. What I advocate for instead of a commission is a full OTE salary plus bonus. Under a commission model, the seller could do everything right, it’s still up to the buyer. The seller could do everything wrong, but the buyer still could buy. It’s so much outside the seller’s control, especially nowadays where most of the buyer’s decision happens without sales.

If you use a cake analogy, it’s half the cake which you have no idea if, when, and how much you’re going to get versus a full salary and a bonus is the full cake plus the icing on top. Smart, financially savvy sellers, good sellers, would go for the full salary, go for the full bonus and have that transparency when they’re working with companies. They know what they’re going to get paid. They’re not getting over promised and under delivered. They can actually focus on delivering a good customer and buyer experience and relationship. The buyer does feel the effects of commissions and doesn’t trust sellers often because of commissions.

There’s examples of companies who’ve gotten rid of commission and they’re paying proper compensation, like monday.com, BambooHR, Microchip Technology, CultureAmp, Pluralsight, Legion Logistics. We value you. We’re going to pay you a full, proper salary and bonus. If you don’t meet our expectations, it’s like any other role. We’re either going to try to coach you and remediate the solution, or we’re going to try to find you a fit elsewhere but we’re not going to play games with your compensation.

Paying it forward [26:59]

Sam Jacobs: What’s a book or an idea or person that you’ve personally found inspirational that we should be aware of?

Nelson Gilliat: That’s Chris Walker from Refine Labs. He is helping people to also understand what’s going on in B2B and that things are changing. His podcast is the State of Demand Gen, and he has a weekly event, Demand Gen Live.

Sam Jacobs: Sounds awesome. Nelson, if folks want to check out your content, what’s the best way to get in touch with you?

Nelson Gilliat: You can follow me on LinkedIn. And then the book is obviously on Amazon, The Death of the SDR: And the Birth of Buyer Centric Revenue.

Sam’s Corner [29:04]

Sam Jacobs: Hey everybody, Sam’s Corner. Great conversation with Nelson Gilliat. His theory is SDRs, get rid of them, jettison them gradually over time but remove that function and stop the sales assembly line, specifically the handoff between SDR to sales and sales to account management or customer success. Get rid of quotas and get rid of commissions. It’s a really interesting perspective. Check out his book!

If you need to reach me, you can email sam@joinpavilion.com. Otherwise I’ll talk to you next time, my friends.

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