The Hidden Costs of Running an SDR Team

Key Takeaways

• The true cost of an in-house SDR, factoring in all hidden expenses, is $128,131 per SDR, per year.
• $1,531 is the average cost per qualified lead generated by an SDR, but if only half of the leads are genuinely new, this cost can easily double to $3,062 per lead.
• Many companies underestimate the full operational costs of maintaining an SDR team, including leadership, tech, and attrition costs.

Breaking Down the Real Cost of an SDR

Sales Development Representatives (SDRs) are essential for outbound sales efforts, but their true cost goes far beyond their base salary. When factoring in additional pay, leadership, and other overheads, the total cost of maintaining an SDR can be much higher than expected. Here's how those costs add up.

Employee Costs

The base salary for an SDR in the U.S. averages $50,535 per year, according to Glassdoor. On top of this is additional pay, including bonuses, commissions, and profit sharing, which averages $29,164 annually.

Source: Glassdoor

Further, companies must factor in mandatory employer costs — like taxes and insurance — which add another $7,500 annually. These mandatory costs vary slightly by state but provide a more accurate picture of what it truly costs to employ an SDR.

Tech Costs

Every SDR relies on a variety of tools to be effective. These include CRM systems, email automation software, LinkedIn Sales Navigator, call recording, and data enrichment tools. Altogether, according to Vertice's latest research, these tech tools cost approximately $9,000 per SDR per year.

Leadership Costs: SDR Team Lead

SDR teams require experienced leadership, and this cost often goes unnoticed. According to Glassdoor, the estimated total pay for an SDR Team Lead is $128,338 per year, which includes a base salary of $67,736 and $60,602 in additional pay.

Source: Glassdoor

Spread across a team of 8 SDRs, the leadership cost per SDR is approximately $16,792 per year.

Source: The Bridge Group

Attrition Costs

SDR roles are known for high turnover, which means that attrition costs must be included in the overall cost structure. With an average productivity period of 16 months and a ramp-up time of 3.2 months, the attrition cost for replacing and ramping up SDRs is estimated at 20% of their salary, adding $15,939 per year per SDR.

Ramping new SDRs to full productivity takes about 3 months. Source: The Bridge Group

The Total: $128,180 per SDR, Per Year

When you account for base salary, additional pay, employer costs, tech expenses, leadership, and attrition, the total cost of maintaining one SDR rises to $128,180 per year or $10,682 per month. This is a critical number to consider when calculating your customer acquisition cost (CAC).

Cost Per Lead: The True Bottom Line

According to Bridge Group's data, a typical SDR generates between 5.8 and 7.8 leads per month. Using 7 leads as a benchmark, the cost per lead comes out to $1,531. However, many of these leads may not be genuinely new. If only half are new contacts, the cost per new lead doubles to $3,062.

Source: The Bridge Group

The Outrizz Solution: Cutting Costs While Boosting Efficiency

Given the high operational costs of in-house SDR teams, many companies are turning to outsourcing as a more cost-effective solution. This is where Outrizz comes in. We provide a fractional SDR service, automating the entire lead generation process at a fraction of the cost of building and maintaining an in-house team.

With our AI-driven approach, we can drastically reduce your cost per lead, allowing your sales team to focus on closing deals. By leveraging automation and expert strategy, we cut down on the high costs associated with leadership, tech, and attrition.