The High-Cost Fallacy of Sales-Only Scaling Models

I once walked into a company which had a hiring plan to bring in 70 AEs. Their current team had 30 AEs. But when I looked at the pipeline they generated, it suggested they could only support 14 reps. Instead of a massive hiring plan, I thought they would be better served cutting the current team and reallocating its resources to support areas.

Burn the overgrown forest down to size to make room for healthier growth. The trees in that forest were mostly hollow anyway.

Emerging trends in go-to-market (GTM) strategies increasingly validate the limitations of relying solely on AEs to drive growth. Contemporary data reveals that organizations leveraging cross-functional teams-integrating product marketing, demand generation, sales development representatives (SDRs), and revenue operations-achieve 27% higher pipeline generation rates compared to sales-centric models according to LeanData’s 2022 Inbound & Outbound Sales Pipeline Performance Benchmarking Report.

And I largely agree.

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Recently I had to support a friend in their evaluation of how they should grow their GTM team. Their new sales leader suggested they ramp up sales headcount. My initial reaction was that I disagreed. I think you need to bring a system first or in parallel to scaling the sales team.

Quantifying the Limitations of the “Closers Only Club”

Account Executives (AEs) cannot single-handedly sustain pipeline growth. For half a generation we’ve rebuilt the sales engine to disaggregate the sales role. Before, sales reps were responsible for the following:

• Pipeline generation

• Lead qualification

• Opportunity management

• Product demonstration

• Objection handling

• Negotiating and closing

• Forecasting

• Account management

• Upselling and cross-selling

Credit to Artisan.co

But when you look at many SaaS sales organizations we’ve disaggregated many of these roles into newer roles.

• Pipeline generation (SDRs)

• Lead qualification (SDRs)

• Product demonstration (Sales Engineers)

• Account management (AMs or Renewal Managers)

The modern sales rep has fewer, but more focused, responsibilities. The underlying thesis is that they will close more.

Salesforce research indicates only 24.3% of sales reps exceed annual quotas, with women outperforming men by 8% in quota attainment. This disparity underscores systemic inefficiencies in relying on individual rep performance rather than structured team support. The 2022 Inbound & Outbound Sales Pipeline Benchmarking Report further reveals that 72% of top-performing sellers attribute their success to buyer-centric strategies enabled by marketing and sales enablement teams, not isolated prospecting efforts.

The Hidden Costs of Outbound-Only Pipelines

While outbound sales motions generate 20-30% of pipeline in median-performing organizations, their reliance on AE prospecting creates unsustainable opportunity costs. LeanData’s analysis shows AEs spend 65% of their time on non-revenue activities like lead qualification. The time spent qualifying leads is a massive drain mitigated by deploying SDRs, which reduce AE prospecting time by 40% while increasing closed-won rates by 17%. Organizations neglecting demand generation face 2.3x higher customer acquisition costs (CAC) compared to those with dedicated functions.

Without SDRS: AEs spend more time qualifying leads.

Without Demand Generation: CAC is far higher

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Core Responsibilities of an SDR:

1. Prospect targeting – Identify ideal customer profiles and buying personas

2. Outbound outreach – Cold calls, emails, social touches

3. Inbound lead response – Quickly follow up with inbound inquiries

4. Discovery & qualification – Use frameworks like BANT or CHAMP

5. Meeting setting – Book discovery or sales calls for AEs

6. CRM hygiene – Log all activities, notes, and lead status

How SDRs Alleviate the AE’s Burden:

• Save time by handling repetitive early-stage outreach

• Improve AE focus on mid- and late-stage selling (demos, negotiations, closing)

• Boost conversion rates by ensuring only qualified leads reach AEs

• Reduce opportunity cost of AEs spending time on unqualified prospects

I’ve argued previously that SDRs only make sense if your AEs are winning. Here’s the article. I dug into the underlying math of how much an AE would need to win in order to support an SDR function.

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Is the Age of the SDR over?

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Core Responsibilities of a Demand Generation:

1. Market segmentation & targeting

2. Campaign planning & execution

3. Content creation coordination (with marketing or agencies)

4. SEO & SEM strategy

5. Email marketing & automation

6. Webinars, events, and virtual experiences

7. Lead nurturing & scoring

8. Performance tracking & attribution

9. Collaboration with Sales & SDRs

10. Driving qualified pipeline and revenue impact

How Demand Generation Alleviates the AE’s Burden:

• Delivers more qualified leads: reduces time AEs spend chasing unqualified prospects

• Warms up the market: creates awareness and interest before AEs engage

• Improves lead velocity: leads come in with context, making sales cycles faster

• Supports outbound with content: provides sales with relevant assets to engage prospects

• Enhances focus on selling: AEs can prioritize mid-to-late funnel activities

• Enables better forecasting: with consistent pipeline input from demand programs

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Building Market Intelligence Through Product Marketing

Cross-functional GTM strategies reduce time-to-pipeline by 34% by integrating product marketing early in market analysis according to Go To Market Alliance. For example, companies deploying product marketers to segment markets see 22% higher lead-to-opportunity conversion rates, as messaging directly addresses pain points identified through competitive intelligence. The LeanData report emphasizes that 30% of pipeline in high-growth tech firms originates from product-marketing-driven campaigns targeting specific verticals.

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Core Responsibilities of a Product Marketing

1. Market research & customer insights

2. Positioning & messaging

3. Persona development

4. Competitive analysis

5. Product launch planning

6. Sales enablement partnership (e.g., battlecards, pitch decks)

7. Creating core marketing content

8. Working with Demand Gen on GTM campaigns

9. Driving product adoption

10. Gathering feedback for product teams

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Experimentation Frameworks for Positioning

Organizations running concurrent positioning experiments achieve 19% faster pipeline velocity. A/B testing value propositions under product marketing oversight increases win rates by 14%, particularly in saturated markets where differentiation hinges on nuanced messaging. Product Marketing can work on positioning narratives upstream, while content marketing and demand generation can distill it into organic and paid assets.

You may not know what works and what doesn’t. That’s why I think it’s hugely important to test and iterate. Find out what works and what doesn’t. Start with the following goals in mind and then go down the list once you’ve validated success in each successive metric:

1. Web visits (may separate landing pages to identify which messaging resonates best)

2. Form submissions

3. Demo requests

4. MQLs (marketing qualified leads)

5. SQLs (sales qualified leads)

6. SAOs (sales accepted opportunities)

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Organic Pipeline Generation via Content Marketing

The SEO Dividend in Pipeline Development

Organic search dominates inbound channels, contributing 30% of total pipeline in median-performing organizations. Companies investing in content marketing teams see 53% higher lead form completion rates compared to those relying on paid channels alone. For instance, educational content assets like whitepapers and webinars generate 27% of SQLs (Sales Qualified Leads) in B2B sectors, with a 12% lower CAC than outbound leads. Although, be prepared to fend off internal arguments of the dark funnel. Often times, a lack of attribution is attributed to direct/organic. Some teams find this skeptical because it can be difficult to prove it is organic.

Agency Partnerships vs. In-House Teams

Having a mix of an in-house team and and agency, or what I call a hybrid content models (in-house + agency), can reduce time-to-first-lead by 40%. However, exclusively outsourced content strategies correlate with 18% lower lead-to-customer conversion rates, emphasizing the need for internal subject-matter expertise to maintain messaging coherence. I’ve had some marketing teams rely on third party content teams and the amount of coordination to maintain messaging cohesion can be high. If you can, I’d highly suggest bringing in that level expertise in-house. It has to go beyond just excellent content copy, but truly subject matter expertise paired with excellent copy.

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Demand Generation’s Role in Capturing "Pain-Aware" Buyers

The 95/5 Rule in Action

In B2B marketing the 95/5 Rule is a concept popularized by the Ehrenberg-Bass Institute that says:

Only 5% of your target market is in-market to buy right now. The other 95% are out-of-market.

Implications of the 95/5 Rule:

• 5% of your ICP is actively researching and ready to buy

• 95% are not ready, but could be in the future

• Focus on brand building and demand creation to stay top-of-mind

• Demand Gen should aim to nurture the 95% while capturing the ready 5%

Leads from demand gen campaigns targeting intent data (e.g., webinar attendees, content downloaders) exhibit 31% higher close rates than cold outbound prospects. HubSpot notes companies with dedicated demand gen functions achieve higher revenue growth YoY by focusing on this "low-hanging fruit".

Retargeting and Multi-Touch Nurturing

Organizations using multi-touch attribution models in demand gen report 23% higher pipeline accuracy. For example, retargeting website visitors with personalized email sequences increases MQL-to-SQL conversion by 19%, while dynamic content delivery based on firmographic data boosts win rates by 11%. Using LeanData reserach here.

Inbound vs. Outbound SDR Models

Going back to SDRs for a bit. Between inbound and outbound SDRs there are performance disparities: inbound SDRs generate 42% more meetings per month but require 15% higher lead volumes, whereas outbound SDRs achieve 27% higher lead-to-meeting conversion rates through targeted outreach. However, outbound SDR teams cost 22% more per lead due to prospecting tool investments. Each scenario has its tradeoffs. I highly suggest fine tuning one function before setting off to build and tune another.

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GTM Engineers as Force Multipliers