Toward a contextualized understanding of inside sales: the role of sales development in effective lead funnel management

Abstract

Purpose

The purpose of this study is to provide a contextualized understanding of how business-to-business (B2B) firms use the sales development function for efficient and effective lead funnel management.

Design/methodology/approach

The authors adopted a qualitative field-study approach and interviewed 13 people from eight firms. While software as a service (SaaS) firms are the most prevalent application context for the sales development function, the authors also included respondents from non-SaaS firms to develop an in-depth understanding of the contextualized nature of the sales development process.

Findings

Sales development processes can be applied in outbound prospect-focused, outbound account-based, inbound prospect-focused and inbound account-based lead management contexts. The sales development processes of lead research, engagement and handover vary depending on the nature of the lead management context. These processes are supported by the appropriate design of organizational, technological and people platforms.

Practical implications

The authors explain how sales development as a form of inside sales can support effective lead funnel management in B2B firms through technology-enabled lead research and nurture processes designed to prepare customers for meaningful conversations with field sales.

Originality/value

To the best of the authors’ knowledge, this study is the first to focus purely on the sales development function as a form of inside sales. They explain how the sales development processes relating to lead research, engagement and handover are conducted in four distinct application contexts to qualify leads for the outside salesforce.

Citation

Terho, H., Salonen, A. and Yrjänen, M. (2023), "Toward a contextualized understanding of inside sales: the role of sales development in effective lead funnel management", Journal of Business & Industrial Marketing, Vol. 38 No. 2, pp. 337-352. https://doi.org/10.1108/JBIM-12-2021-0596

1. Introduction

Digitalization has dramatically changed the nature of business-to-business (B2B) exchange in recent years, leading to calls for the development of new sales approaches. More specifically, due to decreased information asymmetry between sellers and buyers, and the growing replacement of traditional face-to-face communication with technology-based interactions (Ahearne et al., 2022), numerous scholars have called attention to an ongoing “sales transformation” that is widely redefining the role of salespeople and changing the selling firms’ internal and customer-facing interaction processes (Corsaro and Maggioni, 2022; Guenzi and Habel, 2020; Mattila et al., 2021; Wengler et al., 2021).

Such calls are consistent with observations that many B2B firms have reconfigured their lead management processes to facilitate seamless lead generation and nurturing processes involving marketing and sales functions. Ideally, these reconfigurations allow the marketing function to effectively make measurable contributions to sales by taking advantage of marketing technologies to generate and nurture leads through digital channels (Järvinen and Taiminen, 2016; Marvasti et al., 2021; Vieira et al., 2019; Wang et al., 2019). Simultaneously, digitalization has also opened up new opportunities for salesforce-initiated lead acquisition and nurturing, for example, through digital sales technologies and social media (Agnihotri, 2020; Ancillai et al., 2019; Rusthollkarhu et al., 2022; Terho et al., 2022). However, while these developments have brought marketing and sales closer together, tensions remain commonplace between the units (Malshe and Krush, 2020), with salespersons frequently ignoring a substantial degree of marketing-generated leads (Sabnis et al., 2013). In addition, outside expert salespersons focused on engaging existing accounts through consultative and value-based selling initiatives can lack the resources to sufficiently invest in lead acquisition and nurturing tasks as they need to prioritize time allocation between retention of existing customers, acquisition of new customers and non-sales-related activities (Sabnis et al., 2013).

To overcome these challenges, many B2B firms have introduced new specialized sales roles that focus on technology-enabled lead acquisition and nurture processes (Singh et al., 2019). Such inside sales configurations involve remote engagement of prospects in highly adaptive exchanges with the help of digital technologies (Krogue, 2013; Kuruzovich, 2013; Sleep et al., 2020). Specifically, the sales development function has emerged as an important and increasingly used inside sales configuration, which focuses on generating and nurturing high-quality leads (Sleep et al., 2020) that are handed over to an expert outside salesforce (Thaichon et al., 2018). Indeed, leading consultancies have connected sales development to improved lead follow-up, conversion rates and ultimately sales (Rosenberg, 2019; Sleep et al., 2020).

To date, academic research has only made initial efforts to explore this inside sales configuration through the definition of the concept of sales development and exploration of its key benefits and costs (Sleep et al., 2020; Thaichon et al., 2018). However, a detailed understanding of how B2B firms can leverage the sales development function to improve lead funnel management remains underdeveloped. Virtually, no research exists to understand the sales development process, whether the context in which sales development is applied affects the nature of the process or what the key organizational requirements are for its effective implementation (Sleep et al., 2020).

Against this background, the purpose of this study is to provide a contextualized understanding of how B2B firms use the sales development function for efficient and effective lead funnel management. This includes a detailed examination of the:

• nature of the sales development process in different lead funnel management contexts; and

• organizational requirements for its effective application.

By exploring these questions, our study makes three novel contributions to extant research. First, this study contributes to the rapidly evolving but embryonic stream of research concerning the inside sales configuration (Chaker et al., 2022; Homburg et al., 2021; Kuruzovich, 2013; Ohiomah et al., 2019; Rapp et al., 2012; Sleep et al., 2020; Thaichon et al., 2018). Specifically, our results provide novel and rich insights into the sales development process by distinguishing the key steps of lead research, lead engagement and lead handover. These processes are carried out in distinct ways, depending on whether the sales development rep is working with inbound or outbound leads and whether the sales development work focuses on prospects or major accounts. Second, our study provides broad insights into salesforce management decisions in inside sales (Sleep et al., 2020) by discussing how organizational, technological and people platform decisions shape the effective application of the sales development process. Third, at large, our study contributes to lead management research by providing new insights into how the sales development function can contribute to lead management effectiveness in contemporary business organizations through technology-facilitated, specialized sales roles (Ahearne et al., 2022; Kuruzovich, 2013).

The remainder of this manuscript is organized as follows: we start by introducing the sales development concept in Section 1 and then build our initial conceptual framework in Section 2 by reviewing relevant research related to lead management, marketing–sales integration and digitalization of sales. This allows us to ground our conceptualization of sales development as a technology-enabled function tasked with nurturing and qualifying leads for the outside salesforce. The conceptual background section is followed by methods, results, discussion and conclusions in Sections 3, 4, 5 and 6, respectively.

2. Conceptual background

Due to the embryonic state of research on sales development, this study has an explorative emphasis. To ground our explanation of sales development as an organizing approach that B2B firms use to facilitate efficient and effective lead management, we draw upon three domains of research (Figure 1). First, we build on recent research on inside sales, being the only stream of research that currently recognizes the sales development function as a new way to improve lead management in B2B firms through a specialized inside salesforce that focuses on generating and nurturing high-quality leads to outside salespersons (Kuruzovich, 2013; Ohiomah et al., 2019; Rapp et al., 2012; Sleep et al., 2020; Thaichon et al., 2018). Second, to ground a contextualized understanding of sales development, we draw upon lead funnel management research as the task orientation of the sales development function, which focuses on lead generation and nurturing processes (Järvinen and Taiminen, 2016; Sabnis et al., 2013; Söhnchen and Albers, 2010).

Third, to better understand the requirements for organizing the digitally enabled, lead qualification and handover-focused sales development function in different operational contexts, we extend the inside sales and lead management research with three relevant literature streams on marketing–sales integration (Kotler et al., 2006; Rouziès et al., 2005; Singh et al., 2019), the role of technology in sales (Guenzi and Habel, 2020; Honeycutt, 2005; Syam and Sharma, 2018), and salesforce management (Ingram et al., 2019).

2.1 Sales development as a central inside sales configuration

Digitalization has notably changed buyer–seller exchanges by reducing the information asymmetry between customers and salespersons and by increasing digital connectivity in business exchange through advances in novel interaction technologies (Ahearne et al., 2022). This development has been further accentuated by the wide changes brought about by the Covid crisis that has made virtual communication in many situations the new normal (Fready et al., 2022). Consequently, B2B selling firms are increasingly investing in more customer-driven selling processes that leverage various digital technologies and channels along their customer buying journeys (Ancillai et al., 2019; Singh et al., 2020).

Overall, this development has increased specialization in sales by diminishing generalist salesperson roles and replacing them with a team of specialized roles (Singh et al., 2019). Also, as the demand for face-to-face interactions has simultaneously diminished, firms are increasingly emphasizing the inside sales function, whereby salespeople engage customers remotely with the help of information technologies (Krogue, 2013; Ohiomah et al., 2019; Sleep et al., 2020). Accordingly, hybrid sales structures, where the inside salesforce works with and alongside the traditional outside salesforce, have become a central way of organizing contemporary B2B sales (Thaichon et al., 2018).

Recent pioneering research by Sleep et al. (2020) explored in detail the phenomenon of the inside salesforce and distinguished four distinct inside–outside configurations:

• inbound sales or sales support;

• team/hybrid;

• discrete; and

• sales development.

Specifically, the inbound sales or sales support configurations support sales by providing required complementary resources, such as product or technical knowledge, to outside salespeople. In turn, the team/hybrid and discrete configurations aim to close sales either in close collaboration with outside sales or independently, for example, in the case of smaller deals or transactional customers. Finally, the fourth inside sales configuration identified by Sleep et al. (2020) is the sales development function, which can be formally defined as “a form of inside sales which involves back-end sales representatives utilizing digital sales technologies for the purpose of nurturing and qualifying leads for the outside sales” (Kuruzovich, 2013; Sleep et al., 2020). Thus, it differs from the other inside sales configurations in that it focuses on generating qualified leads and setting appointments to the outside salesforce instead of trying to close deals or support outside sales activities directly (Thaichon et al., 2018).

While the first studies have established the conceptual grounding for inside sales by distinguishing its key configurations and outlining some of the capability requirements for applying these configurations (Sleep et al., 2020), this research has largely studied the phenomenon without paying any attention to the specificities of its different configurations (Chaker et al., 2022; Homburg et al., 2021; Matthews and Edmondson, 2022; Ohiomah et al., 2019). Thus, the extant research on specific inside sales configurations and their management remains almost nonexistent.

Studies on sales development have thus far only noted that the configuration focuses on enhancing the outside salesforce’s productivity and efficiency by generating, nurturing, and qualifying leads (Sleep et al., 2020). Studies also indicate that technology plays a key role in sales development as sales development representatives (SDRs) leverage online customer inquiries, outbound telephone, email and automated sales technologies to the point where they can book a meeting for an outside sales representative who then takes over the development of that lead (Kuruzovich, 2013; Sleep et al., 2020). Yet, little insights exist on this configuration, and Sleep et al. (2020) call for additional research to provide a closer understanding of how to:

• adapt the sales development process to different organizational contexts;

• enhance the collaboration between inside and outside salespeople;

• leverage sales technologies and tools in sales development; and

• adapt appropriate sales management decisions to support sales development.

Next, we build a conceptual ground for studying these topics in more detail.

2.2 Lead management as the key context of sales development

Firms seek a constant stream of orders, steady revenues and constant capacity utilization over time to keep the business profitable and to attain growth. This makes lead funnel management a strategic marketing and sales framework for B2B firms (Söhnchen and Albers, 2010). The lead management funnel categorizes potential customers based on their purchasing stage, from suspects to closed deals (Figure 1), and acts as a management tool for nurturing the potential leads in the purchasing process (Järvinen and Taiminen, 2016; Sabnis et al., 2013). The shape of the funnel, defined by the percentage of customers transitioning to the next stage of the funnel, acts to monitor the effectiveness and health of the sales pipeline (Söhnchen and Albers, 2010). We notice that firms’ lead management activities might build on alternative concepts as well, such as customer journey facilitation, but use the lead funnel management as the umbrella term for all firms’ systematic lead-management activities, as it builds on the idea of iterating the multi-stakeholder nurturing process behind all systematic lead nurturing.

In recent years, the marketing function has become increasingly central for lead funnel management as in many settings customers are increasingly relying on digital resources in the initial phases of buying. Content marketing and marketing automation (MA) provide an effective means to respond to these changes by helping acquire and nurture inbound leads (Järvinen and Taiminen, 2016; Vieira et al., 2019). However, studies have found that sales representatives widely ignore a substantial degree of leads generated by marketing, preferring instead to engage in traditional sales-driven outbound prospecting (Sabnis et al., 2013). This is detrimental for selling firms, as it hinders the company’s ability to convert leads into actual customers and results in wasted marketing resources as well as lost customers and lost revenue (Järvinen and Taiminen, 2016; Malshe et al., 2017; Smith et al., 2006).

At the same time, recent technical developments have also introduced new opportunities for salesforce-initiated lead acquisition and nurturing through digital and social media sales technologies, content and tools (Agnihotri, 2020; Ancillai et al., 2019; Rusthollkarhu et al., 2022; Terho et al., 2022). However, as Sabnis et al. (2013) note, the challenge is that outside salespersons need to divide their time between customer retention–related activities, acquisition of new customers and non-sales activities. This means that many outside salespersons, particularly those committed to resource-intensive consultative and value-based selling (Terho et al., 2017), easily lack the time and resources to fully invest in digitally facilitated lead acquisition and nurturing tasks.

Thus, as discussed above, a specialized sales development function has been suggested to help address these widespread lead management problems. An expert inside salesforce solely tasked with remotely nurturing and qualifying leads for the outside salesforce can incentivize the outside salesforce to act on these leads due to the high quality of leads being handed over (Bohrt, 2018; Kuruzovich, 2013; Marketo, 2020; Rosenberg, 2019; Sleep et al., 2020). This should also help outside salespersons to focus their time better, reduce conflicts during lead management and make the sales process leaner overall (Sleep et al., 2020). Given the criticality of these benefits for B2B firms’ sales performance, this study seeks to deepen the extant understanding of the sales development process and the related organizational requirements in the lead funnel management context.

2.3 People, organizational and technological platforms for effective sales development

Finally, we distinguish three factors likely to be central for the effective organization of the digitally enabled, mediating sales development function in the lead management context. Specifically, the organizational platform–related factors relate to the ways of integrating the facilitating sales development function with other close functions, the technological platform–related factors relate to the role of data and technologies in the digitally facilitated sales development process, and people’s questions relate to the managing of SDRs.

2.3.1 Organizational platform

The multi-stakeholder nature of lead management, often involving the marketing and sales functions, is frequently characterized by poor lead follow-up by sales who complain about the quality of leads generated at the earlier stages of the funnel (Kotler et al., 2006; Sabnis et al., 2013; Smith et al., 2006). Järvinen and Taiminen (2016) specified this problem by discussing the difficulties associated with marketing’s lead scoring. If high amounts of leads are passed over to sales, busy sales representatives are likely to encounter low-quality leads, which easily leads them to dismiss also high-quality leads. In turn, if the lead scoring rules are too rigid, valuable leads can be filtered out by accident.

While sales development should provide effective solutions to the above-discussed challenge, the optimal balance in lead handoff is difficult to achieve without sufficient attention to integration between the various functions and internal stakeholders involved in this task (Kotler et al., 2006). Numerous studies have examined different ways of aligning and integrating marketing and sales functions (Biemans et al., 2010; Malshe et al., 2017; Pardo et al., 2014). In this study, we adopt the traditional integration perspective. Specifically, we build loosely on Rouziès et al.’s (2005) integration framework and explore both formal aspects of integration, such as processes and structures, and informal aspects of integration, such as individuals and culture.

2.3.2 Technological platform

The introduction of new technologies and automation tools has opened new opportunities for B2B firms’ marketing and sales functions (Syam and Sharma, 2018; Guenzi and Habel, 2020), and companies are widely investing in diverse sales technologies to improve their sales performance (Honeycutt, 2005; Hunter and Perreault, 2007). However, marketing and sales technologies are difficult to categorize clearly due to the huge number and variety of technologies. A recent report notes that the number of MarTech solutions has increased rapidly, from around 150 technologies in 2011 to 8,000 in 2020 (Brinker, 2020).

At large, it can be concluded that, in addition to various stand-alone technologies, integrated MA and customer relationship management (CRM) systems typically form the backbone of lead management technologies and include numerous modules with diverse functionalities to support a range of marketing- and sales-related tasks (Ancillai et al., 2019, pp. 302–303; Järvinen and Taiminen, 2016). At the salesforce level, digital tools have introduced new ways to conduct sales activities by encoding the company’s sales processes into a sequence of steps consisting of emails, phone calls and LinkedIn messages – many of which can be automated. Also, lead management systems boost the inside salesforce performance via improving the salespeople’s adaptive selling and lead follow-up intensity, as well as their technical and salesmanship skills (Ohiomah et al., 2019). Similarly, customer analytics and social media–focused technologies play an increasing role in inside sales tasks to research, connect and engage leads (Ancillai et al., 2019; Chaker et al., 2022; Sleep et al., 2020). While studies have noted the relevance of diverse technologies in contemporary sales, the requirements for the effective use of technologies in sales development remain largely an unstudied area.

2.3.3 People platform

Extant research has provided only limited knowledge about managing sales development salespersons. Sleep et al. (2020) provide interesting insights into the intended profile of inside salespeople. Inside salespeople tend to be younger and more inexperienced than their outside sales counterparts. Similarly, the knowledge requirements differ since inside salespeople are likely to build broad but somewhat shallow contextual knowledge of selling situations and customer needs. Yet, they must deeply master a range of sales-related technologies and social media platforms. Homburg et al. (2021) show further that unit incentives are positively related to inside sales unit performance, whereas individual incentives notably have a negative relationship with unit performance, stressing the interconnected nature of inside sales. Sleep et al. (2020) argue for hybrid control systems to reward inside salespeople. While some patterns can be distinguished in inside salespeople’s profiles and their management, more research is needed to understand the management of the sales development configuration.

3. Methodology

Sales development is a relatively new and managerially relevant phenomenon that remains largely unexplored in academic research. Due to the nascent state of research, we adopted a qualitative field-study approach. Our research subscribes to the guidelines for abductive research, which involves combining inductive and deductive phases (Dubois and Gadde, 2002; Locke, 2010), thus allowing for iteration between the empirical context and an emerging theoretical frame (Locke, 2010).

We used a theoretical sampling frame to recruit respondents who work for B2B firms that have a sales development function. The data collection involved nine one-to-one interviews with experts from eight firms and an additional focus group interview with seven informants from three firms. Altogether, 13 people were interviewed from eight firms, as three focus group informants were the same as in the initial one-to-one interviews and four were totally new. Overall, the dataset is consistent with the sample sizes recommended for exploratory research (McCracken, 1988). The purpose of the focus group interview was to validate our emerging theoretical framework and to deepen our contextualized understanding of the sales development process.

3.1 Data collection

The selection of interviewees followed the theoretical sampling approach suggested by Eisenhardt and Graebner (2007). The interviewees were selected based on:

• their prior knowledge and hands-on experience with sales development; and

• the fact that they operate in B2B markets.

The study data set is summarized in Table 1.

All interviewees had a deep understanding of the sales development function and its tasks through having worked with or as part of a sales development team. The level of experience in working hands-on with sales development varied. Seven of the interviewees had first-hand experience in creating and managing a sales development function, whereas others had more experience with operational-level tasks. Most of the interviewed companies were SMEs, and three of them were large enterprises. Four of the cases were software as a service (SaaS) companies as sales development is frequently used in SaaS companies, although the role of sales development has also spread to other contexts.

As is consistent with the abductive approach, the interviews were semi-structured. The initial round of one-to-one interviews focused on the sales development function and process, requirements for effective sales development and effectiveness measures. Later, in the focus group interview, we deepened this understanding to verify and further develop the empirically rooted emerging conceptual frameworks (Figures 2 and 3).

3.2 Data analysis

All interviews were recorded and transcribed verbatim. In analyzing the data, we followed the thematic analysis method whereby data is reorganized by themes, resulting in a few factors that explain the phenomenon better than data in the unstructured form (Lee, 1999). The data analysis builds on thematic analysis connected, but not limited, to key themes identified in the conceptual background of the study (Braun and Clarke, 2006).

In analyzing the data, we quickly realized that the sales development processes are vastly different depending on:

• whether the sales development function acts based on directions set by the marketing or sales function; and

• whether the lead is managed on a prospect or an account level.

These dimensions became the axes of our matrix depicted in Figure 2. In terms of organizational requirements, we started with themes identified in previous literature and expanded upon these themes through the data analysis process. For instance, under the people platform theme, issues frequently mentioned by the respondents included job profiles; motivation, training, and leadership; and evaluation and rewards.

In the final reporting of our data, we chose to report our results under the following themes:

• the sales development process; and

• organizational, technological and people platform decisions

The organizational platform decisions refer to formal and informal layers in the integration work to ensure sufficient integration between the marketing, sales development and outside sales functions in the lead management process. Technological platform decisions refer to enabling technologies that support the tasks of SDRs. People platform decisions refer to ensuring that the sales development function is staffed with capable individuals.

3.3 Assessment of the research method

To enhance the validity of our findings, we used various forms of triangulation (Farquhara et al., 2020). First, our approach followed an abductive logic and employed iterative triangulation involving systematic iterations between literature, empirical evidence and intuition through abductive reasoning (Dubois and Gadde, 2002; Farquhara et al., 2020). In terms of source triangulation, we used respondents with different levels of expertise (e.g. sales development reps actively involved in performing sales development on an operational level; management level in charge of heading the sales development function).

In terms of investigator triangulation, the data set was reviewed by all three researchers, and interpretations emerging from the data were discussed among the researchers to ensure interrater reliability. One of the authors in this study has consulting experience in the field of sales development, which helped identify suitable individuals to be interviewed as well as interpret the emerging findings. As for methodological triangulation, we used both one-to-one interviews and a focus group discussion to:

• generate insights (one-to-one interviews); and

• validate and further deepen our insights (focus group interview).

In this focus group interview, we specifically paid attention to allowing time for the different perspectives of the interviewees to develop (Yin, 2009). The more senior-level managers needed less prompting to voice their views, whereas the more junior-level employees tended to wait for the researchers to prompt them. Also, to strengthen our interpretations, we maintained a clear chain of evidence from the empirical data, enriching our reporting of the findings with a rich set of quotations (Yin, 2009).

To ensure the reliability of the study, we described the research process and data collection in detail to explain to the reader how our findings emerged through an abductive process. In terms of generalizability, we have striven for analytical rather than statistical generalizability. Thus, we expect that the processes uncovered through this research form the basis on which such processes can be understood in other companies using the sales development function (Gummesson, 2000). To enhance the transferability of the findings, we paid attention to including different types of companies in the study. This meant that while SaaS firms are the most prevalent context for the sales development function, we also included respondents from other contexts to develop a contextualized understanding of the sales development process. So-called legacy firms will have more tightly entrenched sales and marketing practices that are more difficult to reconfigure when new digitally enabled sales models are introduced.

4. Empirical findings

In this section, we outline the empirical findings on sales development organized around the core pillars of the sales development process and the organizational, technological and people platform decisions required for effective sales development.

4.1 The sales development process in different lead management contexts

The sales development process refers to the key steps that SDRs undertake to provide qualified sales opportunities to outside sales. The data analysis indicates that the sales development process consists of three key steps, but the nature of these steps is contingent on the context of sales development tasks.

The first step of the sales development process focuses on researching the leads. This stage typically involves assessing the quality of an incoming lead or conducting research based on a given prospect list. Respondents noted that the quality of a lead is typically assessed against fit with an ideal customer profile based on criteria such as the customer’s purchasing-related potential or fit with the seller’s offering. Similarly, interviewees highlighted that research also builds an understanding of customer pain points and their needs to support effective customer dialogue. In more complex sales situations, the SDR proactively conducts deeper background research to understand the customer more fully as a decision-making unit, which forms the basis for personalizing the engagement efforts toward the decision-making unit of the customer.

We arrange all the companies in the market according to their conversion potential. We look for the potential, how much profit can be obtained […] Sales development then makes closer decisions on which firms to contact. (Country Manager, Software Services)

We start by mapping the customer organization and identifying the different persons in the business units for making plans for whom we want to contact and what kind of messages we should use. Based on this research we can then start sending carefully personalized messages to the key persons. (Head of Marketing, Management Consulting)

In sales development, even though we do sell, we don’t come off as sales. We focus above all on identifying customer needs and understanding pain points. So, we listen a lot more than talk. (Sales Development Manager, Software Services)

The second step of the sales development process concerns lead engagement through technology-enabled and traditional dialogue in relevant channels such as social media, emails and digital or telephone calls. The data analysis indicated that the length and depth of lead engagement varied widely, depending on the context of sales development. At the simplest, sales development meant connecting with and engaging a single prospect in the customer organization over a relatively brief period of time using automated contact sequences. In more complex situations, the SDR will connect with and engage the customer’s full decision-making unit with tailored messages and content over an extended period to build trust. While SDRs rely on technology and automated contact sequences, respondents widely noted that in most situations, SDRs need to carefully target and personalize the communication based on research:

You make a contact, usually through social media, you bring content into the customer’s timeline and then at some point you begin a conversation […] you gradually build trust. It doesn’t happen in a day. It takes months. (Co-founder, Advertising Agency)

The sequence could be one e-mail followed by a LinkedIn connect request, LinkedIn message, another e-mail, and then a phone call […] we run through the sequence and hope that some of these touchpoints result in a bookable sales meeting. (Head of Marketing, Management Consulting)

The sequence gives you the structure, but you can also manually send the messages and personalize the message […] The lower the volumes, the more personalization and targeting are needed, and consideration is given to mapping the company and its stakeholders. (Head of Growth Marketing, Computer Software Services)

Finally, the third step of the sales development process is the end qualification and handover of leads to outside sales. This is a relatively simple but critical phase. The respondents emphasized the prime importance of clearly defined end-qualification criteria and a carefully coordinated and typically joint handover process to sales to obtain the best results:

It’s important to think about how you want to do that handover and make sure the reporting is clear: what’s expected, at what point to let the customer ahead in the pipeline, what should the SDR tell to outbound sales, and so on […] What a sales qualified lead looks like can be customized for the company […] but always have qualification criteria. (Global inside sales lead, Security and IT Services)

The data analysis further pointed out four key types of sales development that notably differ by the nature of the incoming leads and the complexity of the lead management process, as illustrated in Figure 2.

Specifically, an SDR can pick up “inbound leads” generated by the marketing function or focus on sales function–directed “outbound prospecting” based on predefined criteria. Furthermore, the activities of an SDR can focus on “individual prospects” or “larger enterprise accounts”, depending on the complexity of the sales situation. As depicted in Figure 2, a combination of these contextual conditions results in four types of sales development, as discussed in more detail below.

4.1.1 Outbound prospect-focused sales development

Many interviewed managers noted that some markets are particularly challenging for outside sales because customers are not receptive to sales calls. In these contexts, sales development can specialize in paving access to customers. Typical examples of this type of SD would be a firm wanting to open up new foreign markets or contacting customers in industries where key stakeholders are reluctant to discuss with new vendors. As the time of the outside salesforce is limited and costly, the sales development function can play a crucial role in doing the time-consuming groundwork:

In the Nordics, it’s amazingly easy to arrange a meeting with almost anyone but for example in Netherlands the situation is completely different. In that market we need to use all possible means to get the message across the gatekeeper or decision maker. It’s a must that you have a separate sales development team that just books meetings for sales. You need to have three sales development representatives to feed sales meetings to one field-salesperson. (Country Manager, Software Services)

When the SD function works with cold outbound leads, the research phase typically focuses on pre-qualifying an already existing list of potential contacts often defined by the sales function or by generating such a list manually, for instance, by researching firm websites and LinkedIn profiles based on established criteria. In doing so, the SDR checks fit with the ideal customer profile and identifies the right prospects in the customer organization. Then, the SDR starts the engagement and nurturing process, typically with the help of automation technologies with mass-tailored messages designed to warm up the potential leads. These engagement efforts focus, above all, on building the customer’s awareness of the provider. When a prospect is ready to begin a conversation with sales, the lead is handed over to inside or outside sales in a joint meeting, depending on how the selling function is organized:

Sales development can bring on a platter 10 leads […] They can take the lead to a point that when the salesperson calls, the customer already knows about the seller and has seen their marketing communications. Maybe the customer is already interested and has some questions. (Co-founder, Advertising Agency)

4.1.2 Inbound prospect-focused sales development

A second key context for sales development focuses on situations where marketing generates relatively large amounts of inbound leads with digital (content) marketing and the firm’s offering is relatively simple to buy, including many SaaS offerings. Interviewees widely stressed that the short response time to contact the inbound, already-engaged lead often becomes a central aspect of effective sales. As expert field salespeople are often very busy, many firms have established an inbound sales development function whose task is to ensure fast follow-up:

Let’s say in Saas business […] where almost anyone can quickly buy without a complicated purchasing process […] if you reply after one day to the customer’s inquiry, the need is no longer there or the customer doesn’t even remember what they were looking for. (Head of Growth Marketing, Computer Software Services)

With sales development we can produce a positive customer experience when we are let’s say in contact within three hours with the customer. (Head of Marketing, Industrial Measurement)

This represents the simplest form of sales development, as the SDRs work with already “warm” inbound leads at the individual prospect level. Thus, the complexity and length of engagement are rather short, and customers typically already have a positive attitude toward the firm and its offerings. The research conducted by sales development typically focuses on understanding the profile of the incoming lead by screening the engagement history available in the firm’s MA and CRM systems, potentially augmenting this with broader customer information, for example, from social media. Then, through engagement dialogue, the SDR will further qualify the lead:

We tried to find out if it’s a case where we can sell something right now or maybe six months down the line […] many leads that contact us are not the right persons from the perspective of sales. SDRs can dig out the needed information […] The lead can give us the right contact. (Co-founder/CEO, Advertising Agency)

Typically, in inbound prospect-focused sales development, once the SDR verifies that the lead is a person who can carry out conversations with sales, the lead is then rather quickly handed over to the appropriate salesperson, either in inside or in outside sales.

4.1.3 Outbound account-based sales development

The third sales development type focuses on building the ground for establishing major new account relationships in the context of more complex offerings through specialized sales development work. Complex purchase decisions require prolonged engagement of multiple and varied customer stakeholders at the account level rather than at the individual prospect level:

But then if we go into this kind of complex enterprise sales with long sales cycles and big corporations with a lot of stakeholders and a big expansion opportunity. Then all this goes more into account-based activities. We focus on building that partnership and opening up the global organization of the big corporation, its different subsidiaries or different country organizations. Then these kinds of account-based activities represent the best practice for building of trust. (Head of Growth Marketing, Computer Software Services)

Account-based [sales development] work was a huge realization for us: by that we can create a lot of value for salespeople, who do not have the resources to systematically open conversations within certain companies. (Head of Marketing, Management Consulting)

Account-based sales development requires careful integration with both marketing and sales functions so that the various account-focused actions are aligned. The sales function usually defines the new major accounts to be developed. Interviewees highlighted that successful engagement requires substantial background research from SDRs to map the key stakeholders in the customer’s decision-making unit and to understand how to engage them in conversations based on individual and organizational pain points:

They start to map the organization and see what types of people there are in the different business units […] who do we want to contact […] we often visit the person’s LinkedIn profile to be able to say that you’ve done these things or google them to say that you’ve spoken about this […] in account focused sales development we send highly personalized and well-thought-out messages to these key people. (Head of Marketing, Management Consulting)

After that, the content strategy needs to be created: what is the message, what content is shared with the customer (e.g. whitepapers) and choosing the right channels such as LinkedIn or email. The strategy then drives personalized contact and dialogue with the prime goal of building trust over time. The lead will be handed over to sales when relevant customer stakeholders are ready to have the sales conversation. When the lead is handed over to outside sales, it is important that the account executive gets a detailed understanding of how the customer as a decision-making unit has engaged with the seller, what type of seller-generated content they have consumed, who they have spoken with from the seller’s side and what types of customer insights have been generated through these encounters.

4.1.4 Inbound account-based sales development

Finally, the fourth form of sales development closely resembles account-focused outbound sales development because it focuses on major accounts and engagement processes take time. They also require the engagement of the customer as a decision-making unit with highly tailored messages. However, inbound-account SD does not start the prospecting process from scratch with sales-defined “cold” prospect lists. Instead, SD works with “lukewarm” and, in many cases, the existing account leads that the marketing has already established a connection with through digital content marketing–related initiatives.

Here, research pertains additionally to trying to understand why the customer, as a decision-making unit, is engaging with seller-generated content. For instance, it could be that multiple stakeholders of a customer organization have recently visited the firm’s website and downloaded content, indicating that a customer has identified a problem, which can turn into a substantial sales opportunity for the seller:

Sales development contacts those who have shown interest in the use of AI in procurement […] In enterprise sales we can’t just wait for customers to come and buy when they are ready. If sales development can find the signals that here is one who is getting ready to buy that really speeds up the sales cycle. (Head of Growth Marketing, Computer Software Services)

We know that these people have visited our website […] SDRs can start client conversations through social media: LinkedIn, Twitter, Instagram, Facebook. To try to understand if there is common ground for us to start a conversation. (Co-founder, Advertising Agency)

Effective engagement typically involves doing internal research to analyze what is already known about the customer through the firm’s existing MA and CRM systems. Then, contact is initiated to further understand the customer’s interests and decision-making situation using external data sources, such as social media. Through engagement, the target is to nudge the customer-driven problem-solving process in the right direction through dialogue with the seller:

Many software vendors want to build their inbound content in such a way that they will end up being included in the evaluation process […] if you can influence the request for tender process in such a way that your platform is favored over others […] that means you are already very far in the process. (Head of Growth Marketing, Computer Software Services)

Once SD deems that the customer, as a decision-making unit, is ready to start a dialogue with the account executive, the lead is handed over to outside sales.

4.2 Organizational platform decisions

The data analysis indicated that the seamless integration into marketing and sales represents a key requirement for effective sales development. We refer to the organizational integration–related questions as the organizational platform and distinguish formal and informal layers in the integration work.

The data analysis indicated several formal means for integrating the marketing, sales development and outside sales units with closing responsibilities in the lead management context. First, many interviewees noted the need for jointly defined processes among the lead funnel functions. Specifically, units should clearly define and agree on the terminology “what is a lead, a sales qualified lead or a prospect,” as well as clearly define responsibilities who has the ownership of the lead along the sales process. Many firms further used internal service-level agreements to formally govern the internal lead management process, for example, regarding the contact times for different leads:

The very first is the definition of the process. Who are involved at the funnel in the initial phases of the customer’s journey? What is the role of inside sales, SDRs, field sales, or sales engineers […] We need to define the building blocks: who are involved, what they do and when. (Global Inside Sales Lead, Security and IT Services).

Especially when dealing with larger teams and larger companies, I think that internal service level agreements are good so that everyone knows kind of what’s expected of them. (Sales Development Manager, Computer Software Services)

Second, interviewees noted the importance of having shared targets. Specifically, the participating units of marketing, sales development and outside sales should have the same goals and incentives that facilitate joint efforts and contribute to the revenue target of the whole company. Many respondents emphasized joint target setting by working backward from sales targets to understand how many leads marketing needs to generate monthly and what the quality of those leads needs to be so that the sales funnel maintains a steady flow. Shared target setting helps avoid conflicts and ensures that the teams understand the lead process similarly:

A basic requirement for marketing and sales to work together is a joint understanding of the ways in which we implement strategy and what everybody’s role is in it […] On a more fine-grained level this means having aligned incentives. (Country Manager, Software Services)

The interviewees also widely noted the importance of informal means of integrating stakeholders in the sales development context. Specifically, the interviewees highlighted the need for a culture of open communication among the units. This means low organizational borders and regular joint meetings between the functions. The feedback from outside sales was noted to be of high importance so that sales development and marketing understand how their activities are supporting sales. Similarly, if marketing is working on certain campaigns, it is important that sales development and sales know what the message is that the firm is trying to get across. Some respondents discussed the hesitancy of the sales organization to accept the sales development function because of a fear of SDR “stepping on the salesperson’s toes” through engagement in customer conversations. While no quick fix solution exists to this dilemma, respondents noted that sales development should focus on actively demonstrating the value that it brings to sales and be receptive to feedback from sales about the quality of the leads it passes over:

I think that marketing traditionally has an easier time accepting sales development but sales and sales development can really clash […] We have spent a lot of time to resolve situations where “this was my lead, no I talked to them first, no it was mine” instead of just having this kind of machine where it’s like you know sales development generates, sales picks it up and then it just like kind of rolls on […] We have established practices where a sales development representative works with one sales representative. This has helped them to become teammates and they have started to share information in a totally different way. (Sales Development Manager, Computer Software Services)

4.3 Technological platform–enabling technologies

Given that SD is a back-office function that largely builds on digital sales technologies, the “technological platforms” facilitating sales development work represent another central enabler of the function. The interviewees widely mentioned MA and CRM systems as the key technologies that enable the sales development process, potentially supported by additional stand-alone technologies:

All data regarding our sales funnel is in Hubspot [MA system] […] it’s really valuable that the data is in one place […] it’s not enough that you input something randomly. It needs to be clearly specified what’s entered into the system by sales, sales development, and marketing so that we can get benefits out of it. (Head of Marketing, Management Consulting)

Sales and marketing need a shared visibility into the contact base. If there is marketing automation and CRM, it’s helpful if they are integrated […] Analytics is difficult to do if systems are not integrated. (Head of Marketing, Industrial Measurement)

We distinguish four key functionalities in these systems, which are noted to play a role in sales development. First, interviewees stressed that sales engagement tools, such as Outreach or Salesloft, can effectively facilitate the management of a vast number of interactions with diverse leads across channels through automated contact sequences including email, telephone, social media and virtual meetings, among others. Second, analytics and sales intelligence tools were also widely mentioned to help research and attain account and individual buyer insights (e.g. LeadIQ, Linkedin Sales Navigator). Third, several respondents mentioned the key role of firm-generated content in sales development and noted that sales enablement tools are central to helping SDRs access and share firm-generated content with customers (e.g. Highspot, Salesloft). Fourth, traditional pipeline management tools were also mentioned by interviewees to structure and support the overall prospecting and sales processes (e.g. ABM dashboards):

It is extremely important to have good content: there is always an enormous number of questions from customers, so SDRs must have access to a comprehensive content bank with value-adding materials to answer customer questions. Marketing and product marketing should provide strong support in making materials available. (Global Inside Sales Lead, Security and IT Services)

And of course we try to create ABM dashboards, for example into Hubspot, to see what is happening in certain customer relationships. So, every time we start a new case, we will have a meeting where we define these issues and then the SDR begins the process. Then after five to seven days we have another meeting to discuss what kind of responses the SDR has received from that market. (Co-founder/CEO, Advertising Agency)

Interviewees widely noted that the needed configuration of tools depends on the nature of the SDR’s tasks. Regardless of the specific systems and tools used, the data analysis highlighted the need for sufficient integration between the systems that allows the marketing, sales development and sales functions full visibility into the sales funnel. Findings point out the importance of transparency in the data for an integrated and effective sales development function. Shared databases and integrated systems are of key importance when managing leads and integrating the ways of working for marketing and sales. It is also critical to ensure that all parties are actively updating the data for an effective sales development process. Finally, interviewees widely stressed that, although various technologies are needed, sales development is likely to fail if it is implemented in a purely technology-driven way. As the sales process progresses, the role of automation and technologies becomes less pronounced:

When the sales development contacts someone […] they see [from the analytics] the whole history what the person has downloaded, which events they have attended, which websites they have visited, who has called them, what kinds of e-mails have been sent, what has been agreed, or what other leads are attached to this contact or this company. (Head of Marketing, Management Consulting)

Adding information to the systems occasionally is not enough – data enrichment needs to be a systematic process and the information that sales, sales development or marketing teams add for each contact needs to be clearly defined to get results. (Head of Marketing, Management Consulting)

From my experience, the sales conversation has to be transferred quite quickly to the personal level. The role of automation is just to get insights on the customer, what they are doing and to identify those with whom we can really discuss. (Global Inside Sales Lead, Security and IT Services)

4.4 People platform

The people dimension of sales development refers to questions related to managing SDRs. We structure the people-related sales development issues using traditional sales management decisions pertaining to job profiles, training, motivation and leadership, as well as evaluation and rewards. In conducting the data analysis, we noticed that people’s decisions are closely connected to the four types of sales development with different task orientations, calling for slightly different SDR profiles.

Job profiles: Earlier research has noted that SD represents an entry-level position for more junior people who have the potential to develop into B2B sales professionals. To be effective in this role, ideal recruits are systematic and persevering and adept with digital channels. Interpersonal skills are also important since the SDR is often the first human contact point for the customer. Our results extend the extant notions by noting that different sales development contexts are likely to require certain types of representatives:

The key thing is that you understand the difference between inbound and outbound, and you specialize in one or the other […] The competence requirements and work profile are very different if you’re cold calling and prospecting people who have never heard about you compared to when you think together with marketing what you want to do with these hundreds of leads. (Chief Marketing Officer, Procurement Software and Analytics)

The simple-outbound SD context requires representatives who can persevere and excel in cold contact with challenging customers, whereas simple-inbound SDRs are likely to benefit from more service-oriented people. In turn, the respondents noted that account-based SD favors profiles that are more senior since engagement needs to be personalized and requires greater expertise from the seller. In these contexts, the key challenge for recruiters is to find people who show interest in sales but still prefer occupational stability to counterbalance a “repetitive” job:

Actually, it’s not just juniors. The most effective SDRs have been senior persons with a long work history […] These seniors are needed to reach out to those big global companies. You can’t put in a junior for these major accounts. SDRs must be able to demonstrate that they can bring in some added value right away. (Global Inside Sales Lead, Security and IT Services)

The flipside of effectiveness is that specialization can be boring and repetitive. But we have also noted that there are people who appreciate job security and routines. These persons are not actually looking for excitement and challenges in their work but prefer stability. (Country Manager, Software Services)

Motivation, training and leadership: Data analysis indicated that SDRs are likely to have some turnover, as the work tasks are fairly routinized and repetitive. As, for many, sales development is an entry-level position, the career development perspective is a key motivator. Thus, many firms use the junior SDR positions as an entry-level sales position to the firm, whereby junior salespersons can learn about the industry and the sales profession in a tight team for a few years and then move on to more demanding sales positions. Training allows SDRs not only to develop into B2B sales professionals but also to keep them motivated. A team orientation supports both motivation and learning:

Many of our salespeople have done sales development type of work where they have learned about the industry […] Some of the tasks are more routine-like, but done in a smart way […] we don’t hire call center types. They need to show potential to grow and specialize in sales. (Country Manager, Software Services)

Team orientation is much stronger than in more senior sales roles […] We can build a certain type of culture in our team where we share information […] tell each other about our mistakes […] share best practices […] the further you go in sales people start to have really different styles how to handle customers. In sales development there are much more shared processes and the whole point is to together find the best practices, scale them, and again iterate. (Consultant, Management Consulting)

Evaluation and rewards: In terms of evaluation and rewards, interviewees noted that a combination of activity-based and quality-focused KPIs delivers the best results. Often mentioned activity-based controls were, for instance, the number of leads the SDR has qualified or the amount of booked sales meetings. Most interviewees highlighted the key importance of quality-focused KPIs for attaining high performance, such as did the field sales enter a new sales opportunity into the firm’s CRM system after holding a sales meeting booked by an SDR; what was the average length of the sales process for an SDR-qualified lead; or amount of revenue coming from SDR generated leads. Most interviewees were hesitant to use strictly performance-based pay in sales development. Instead, many respondents noted that a fixed or at least a partly fixed salary was a better option, as the SDR’s key task is to nurture leads and to build trust instead of closing deals. Overall, the results indicate that regardless of the incentive system in use, it should guide the SDRs to engage in trust-building-related activities with the customer, as this improves the quality of the lead, which then turns into measurable sales performance.

“Booked meetings” is a classic metric, however, in my opinion a wrong one. It would be more important to think about the lifecycle of the client: how it was transformed from a subscriber to an opportunity. How many deals have been realized and what was their amount, how much they generated relevant pipeline that has been verified by someone else? In general, we measure activity level, the quality level, and the output. (Global Inside Sales Lead, Security and IT Services)

Should the compensation be based on performance? I would say that strictly performance-based pay does not often make sense […] These people (SDRs) do not sell but they build trust […] When thinking about sales development KPIs, the amount of qualified leads over a certain period of time is the most sensible measure. Additionally, we could think about how much it has shortened the sales cycle, for example. (Co-founder, Advertising Agency)

5. Discussion of results

To the best of our knowledge, this is the first study to specifically explore sales development as a type of inside sales configuration focused on facilitating efficient and effective lead funnel management. In doing so, we respond to recent calls by Sleep et al. (2020) to examine how firms should adapt the inside sales process to different organizational contexts.

The findings align with the general notions of Sleep et al. (2020) that sales development represents a function that focuses on “generating qualified leads for the outside sales force” and is a “hand-off model tasked with enhancing the outside salesforce’s productivity and efficiency.” In doing so, our results also align with earlier studies by noting that sales development should provide better quality leads, shorter sales cycles, higher conversion rates and ultimately more sales (Kauffman and Pointer, 2021; Sleep et al., 2020). However, our findings nuance and extend the current understating of sales development in many ways, as summarized in Figure 3.

First, this study provides novel insights into the sales development process by distinguishing its three key steps of lead prequalification and research, engagement and nurturing, as well as end-qualification and handover. We also demonstrate how the steps in this process vary depending on the context of the sales development tasks (see Figures 2 and 3 for full details). Specifically, our findings show that sales development can be either focused on sales prospects or marketing leads and that the sales development process varies in complexity depending on whether it concentrates on individual prospects or organizational accounts. A combination of these contextual conditions results in four distinct types of sales development processes:

1. outbound prospect-focused;

2. outbound account-focused;

3. inbound prospect-focused; and

4. inbound account-focused sales development (Figure 3).

Prospect-focused forms of sales development have a shorter turnaround cycle and can rely on a higher degree of automation, while account-focused sales development typically takes longer and requires more manual inputs from the sales development reps during the lead research and nurture process.

Second, this study further provides new insights into inside salesforce management decisions by discussing how organizational, technological and people platform decisions shape the effective application of the sales development process. In terms of the organizational platform, sales development seems to be an effective solution to the common complaint by marketing concerning poor lead follow-up by sales and complaints by sales about the quality of leads generated by marketing (Kotler et al., 2006; Sabnis et al., 2013; Smith et al., 2006). Also, the findings point out that a specialized sales development function can improve the effectiveness of sales lead management among the outside salesforce, allowing expert salespersons to use their limited more effectively between retention of existing customers, acquisition of new customers and non-sales-related activities (Sabnis et al., 2013). However, our results highlight that, to work effectively, the specialized multi-stakeholder sales development function requires wide integration efforts among the participating parties for attaining effectiveness (Kotler et al., 2006). Specifically, the formal aspects of integration encompass establishing jointly defined processes and shared targets for integrating the marketing, sales development and sales units perspectives (Enz and Lambert, 2012; Ruiz-Alba et al., 2019). Also, the findings highlight the importance of having more informal integration mechanisms in place, mainly in the form of a culture of open communication enacted through joint meetings and active communication for effective cross-functional integration (Arnett and Wittmann, 2014).

In terms of the technological platform, our findings align with Järvinen and Taiminen (2016), who note that integrated MA and CRM systems form the technological backbone of contemporary B2B lead management and are complemented by various stand-alone tools. We extend these findings by identifying four key types of sales technologies that form the backbone of SDRs’ work by helping to facilitate both their customer-facing interaction processes and internal processes in sales work (Guenzi and Habel, 2020). First, SDRs rely on sales engagement tools, which enable the effective management of a vast number of personalized interactions with diverse leads across channels through automated contact sequences. Furthermore, analytics and sales intelligence tools generate customer and stakeholder insights, sales enablement tools help access and share firm-generated content and pipeline management tools help steer complex sales processes. The results indicate that the relative importance of these tools depends on the nature of the sales development tasks at hand. At large, the findings align with recent research that notes an increase in the use of advanced Web-based and mobile tools through which the selling organization can contact and interact with customers (Chaker et al., 2022; Honeycutt, 2005; Syam and Sharma, 2018, p. 143). Finally, the technological platform-related findings also highlight the prime importance of transparency in data when managing leads and integrating the ways of working between marketing, SD, and sales to allow full organizational visibility into the management of the sales funnel across participating units.

Finally, the findings provide interesting insights into the people platform questions. Our results again align with earlier inside sales research about the general requirements for SDRs (Sleep et al., 2020). However, the findings show that different sales development contexts require differing people profiles. For instance, account-based sales development requires more senior salespersons than prospect-focused sales development, whereas those engaging in outbound prospecting need more of a “hunting” disposition than SDRs who work with inbound leads. A key motivational challenge of sales development is the retention of SDRs who face a demanding but rather repetitive task environment with clearly defined tasks and processes (Sleep et al., 2020). Our results highlight that sales development managers can overcome these motivational issues by recruiting internally motivated persons who value stability, by providing career development opportunities for those with a more dynamic disposition and by ensuring sufficient peer support to cope with the associated job pressures (Rutherford et al., 2014). Our results also complement Homburg et al.’s (2021) findings on rewards in inside sales, showing that unit incentives are positively related to inside sales unit performance. Our findings suggest using a mixture of fixed pay (to account for the fact that sales development reps need a lot of on-the-job training) and performance-based pay based on a combination of activity-based and quality-focused KPIs (cf. Sleep et al., 2020). Activity-based pay reflects the process-oriented nature of inside sales and encourages sales development reps “to follow the script,” whereas quality-focused KPIs encourage sales development reps to find ways of working smarter, so as to contribute to the firm’s bottom line.

6. Study conclusions

6.1 Theoretical conclusions

Scholars have recently emphasized an ongoing digitalization-rooted “sales transformation” that is widely redefining the role of salespeople and changing the selling firms’ internal and customer-facing interaction processes – a trend that has been further boosted by the recent Covid crisis (Corsaro and Maggioni, 2022; Fready et al., 2022; Guenzi and Habel, 2020; Mattila et al., 2021; Wengler et al., 2021).

One manifestation of these developments has been the recent emergence of the sales development function, which is an increasingly used inside sales configuration focused on generating and nurturing high-quality leads (Sleep et al., 2020) that are handed over to an expert outside salesforce (Thaichon et al., 2018). Despite its growing managerial importance, academic research has made only initial efforts to explore this key inside sales configuration through the definition of the concept and exploration of its key benefits and costs (Sleep et al., 2020; Thaichon et al., 2018). To contribute to a better understanding of this key inside sales configuration, this study has sought to provide a contextualized explanation of how B2B firms use the sales development function for efficient and effective lead funnel management. This includes explication of the nature of the sales development process in different lead funnel management contexts and the organizational requirements for its effective application. In doing so, we make three distinct contributions to extant research.

1. First, our study contributes to the rapidly evolving but nascent stream of research concerning the inside sales configuration (Chaker et al., 2022; Homburg et al., 2021; Kuruzovich, 2013; Ohiomah et al., 2019; Rapp et al., 2012; Sleep et al., 2020; Thaichon et al., 2018). Specifically, this is the first study that purely focuses on the sales development function as a form of inside sales. The results provide novel and rich insights into the sales development process by distinguishing the key steps of lead research, lead engagement and lead handover. These sales development processes are carried out in distinct ways, depending on whether the sales development rep is working with inbound or outbound leads and whether the sales development work focuses on individual prospects or major accounts. The four identified types of sales development help deepen understanding of the specific inside sales configurations first proposed by Sleep et al. (2020).

2. Second, our study provides broad insights into salesforce management decisions in inside sales (Sleep et al., 2020). Specifically, this study explores the organizational, technological and people platform decisions needed for the effective implementation of sales development processes. The specialized multi-stakeholder sales development function requires wide organizational integration efforts among the participating parties, including jointly defined processes and shared targets for integrating the perspectives of marketing, sales development and sales units (Kotler et al., 2006; Ruiz-Alba et al., 2019). In terms of the technological platform, sales development includes various engagement; analytics and sales intelligence; sales enablement; and pipeline management tools that enable the effective management of a vast number of personalized interactions with diverse leads across channels through automated contact sequences (Chaker et al., 2022; Honeycutt, 2005; Syam and Sharma, 2018, p. 143). These tools complement integrated MA and CRM systems (Järvinen and Taiminen, 2016) in facilitating customer-facing interaction processes and internal processes in sales work (Guenzi and Habel, 2020). Finally, in terms of the people platform decisions, a key task of management is to address the retention challenge (Sleep et al., 2020) by recruiting persons who value stability, by providing career development trajectories for those with a more dynamic disposition, and by ensuring sufficient peer support to cope with the associated job pressures (Rutherford et al., 2014).

3. Third, our study contributes to lead management research by providing insights into how new technology-facilitated, specialized sales roles such as sales development can contribute to lead management effectiveness in contemporary business organizations (Ahearne et al., 2022; Kuruzovich, 2013). The results indicate that a specialized sales development function can improve the effectiveness of multifunctional lead funnel management by ensuring that the expert and expensive outside salesforce receives a constant supply of high-quality leads that it is willing to act upon. This willingness depends critically on the ability of the sales development reps to ensure the quality of leads through research, nurture and qualification. This process is assisted by proper technological platforms and transparency in data when managing leads; and sufficient integration of the ways of working between marketing, sales development and sales to allow full organizational visibility into the management of the sales funnel.

6.2 Managerial implications

In this study, we explain how the sales development function can facilitate smooth lead funnel management by researching and nurturing leads until the customer is ready to commence discussions with an outside sales representative. If implemented correctly, sales development results in better quality leads, shorter sales cycles, higher conversion rates and ultimately improved sales. Prospect-focused forms of sales development are more routinized and can be staffed by junior sales reps who are persevering in nature and adept at using the required technological tools designed to facilitate lead research, nurture and qualification. Outbound prospect-focused sales development can be used, for instance, to open up new target markets in situations where customers are not receptive to sales calls by field reps. Inbound prospect-focused sales development typically takes place in contexts where marketing generates relatively large amounts of inbound leads with digital (content) marketing and the key to generating sales is a rapid response time to customer inquiries.

Account-focused sales development requires more senior profiles, as engagement needs to be more personalized and requires greater expertise from the seller to uncover both individual and organizational pain points of the customer as a decision-making unit. This forms the basis for nudging the customer’s problem-solving process through technology-enabled account touchpoints designed to frame the seller as an attractive partner for the customer. The process continues until the customer is ready to start a conversation with an account executive.

Regardless of the application context, for sales development to be successful, the organizational platform needs to be designed in such a way that shared metrics and revenue targets integrate activities between marketing, sales development and outside sales. Also, joint databases are important when managing leads and integrating the ways of working between marketing, sales development and sales to allow full organizational visibility into effective management of the sales funnel.

6.3 Study limitations and future research implications

This study also has some limitations. First, this study is explorative and builds on qualitative data from in-depth interviews with managers. While the generated insights provide an initial understanding of the important boundary conditions that drive the effectiveness of sales development, future studies could adopt quantitative methods to confirm these relationships. Second, this study relied mostly on key informants who are responsible for steering the sales development function or who conduct it at the operational level. Future research could look closer at the sales development function from the other units’ perspectives. We particularly suggest that future studies incorporate more respondents with functional responsibility for marketing and outside sales to gain a better understanding of how the sales development function aligns with the operations of these units. Third, based on our results, it is clear that firms implementing the sales development function will face organizational culture and people-related challenges that need to be addressed. Future studies should examine these roadblocks in more detail, especially in the context of non-SaaS firms that are likely to be less familiar with digitally enabled sales configurations. We also expect company size to be an important boundary condition related to how the sales development function is organized, which should be examined in more detail in future studies.

Figures

Figure 1

Initial conceptual framework

Figure 2

Four types of sales development and SD process characteristics

Figure 3

The role of sales development in effective lead funnel management

Table 1

Details of the study data set

Individual interviews:
No.	Firm	Industry	Turnover	No.	Job title	Duration
1	Company A	Management consulting	∼15 M€	1	Head of Marketing	87 min
2	Company B	Industrial measurement	∼300 M€	2	Head of Marketing	43 min
3	Company C	Procurement software and analytics	∼10 M€	3	Chief Marketing Officer	56 min
4	Company D	Software services	∼9 M€	4	Country Manager	73 min
5	Company E	Advertising agency	n/a (start-up)	5	Co-founder/CEO	71 min
5	Company E	Advertising agency	n/a (start-up)	6	Co-founder	55 min
6	Company G	Security and IT-services	∼200 M€	7	Global Inside Sales Lead	52 min
7	Company H	Computer software services	∼15 M€	8	Head of Growth Marketing	61 min
8	Company I	Computer software services	∼330 M€	9	Sales Development Manager	55 min
Total eight firms				Total nine interviewees
Group interview:
1	Company A	Management consulting	∼15 M€	1	Head of Marketing	61 min
1	Company A	Management consulting	∼15 M€	2	Consultant	61 min
1	Company A	Management consulting	∼15 M€	3	Consultant	61 min
1	Company A	Management consulting	∼15 M€	4	Consultant	61 min
1	Company A	Management consulting	∼15 M€	5	Associate Consultant	61 min
2	Company B	Industrial Measurement	∼300 M€	6	Head of Marketing	61 min
3	Company H	Computer software services	∼15 M€	7	Head of Growth Marketing	61 min
Total three firms				Total seven interviewees