predictable-revenue

$28

Type

Source

Conversion

Cost

Example

Seeds

Word of mouth, referrals, organic

Highest (best quality)

Lowest (takes time)

Customer referral, NPS-driven

Nets

Marketing campaigns, inbound

Medium

Medium

Content marketing, SEO, webinars

Spears

Outbound prospecting

Lower (but predictable)

Higher (people-intensive)

Cold Calling 2.0, targeted outreach

Key insight: Most companies over-invest in nets (marketing) and under-invest in spears (outbound). Seeds are the best but can't be manufactured quickly. A balanced mix of all three creates predictable revenue.

Revenue mix:

• Seeds: Invest in customer success, NPS, referral programs

• Nets: Invest in content, SEO, paid acquisition

• Spears: Invest in SDR team, Cold Calling 2.0

See: references/lead-types.md for lead source strategy and investment allocation.

Sales Role Specialization

The #1 principle: Separate prospecting from closing.

Traditional (broken) model:

• AEs prospect AND close

• Result: AEs hate prospecting, pipeline is feast-or-famine

Predictable Revenue model:

Role

Focus

Metrics

SDR (Sales Development Rep)

Outbound prospecting → qualified opportunities

Qualified meetings/month

MDR (Market Development Rep)

Inbound lead qualification

Qualified leads/month

AE (Account Executive)

Close deals

Revenue closed, win rate

CSM (Customer Success Manager)

Retain and grow accounts

Retention rate, expansion revenue

SDR (Sales Development Rep)

Mission: Generate qualified pipeline through outbound prospecting.

Focus:

• Research target accounts

• Write personalized Cold Calling 2.0 emails

• Get referred to the right person

• Qualify opportunities (ANUM)

• Pass qualified opportunities to AEs

Not their job:

• Close deals

• Handle inbound leads

• Manage existing customers

Metrics:

• Qualified opportunities generated per month

• Response rate to outbound emails

• Meetings booked per week

• Pipeline value generated

SDR capacity: One SDR typically generates 10-20 qualified opportunities per month.

AE (Account Executive)

Mission: Close deals from qualified pipeline.

Focus:

• Run discovery calls

• Demo and present solutions

• Negotiate and close

• Hand off to CSM

Not their job:

• Prospect for new leads (this is SDR's job)

• Qualify inbound leads (this is MDR's job)

• Manage post-sale relationships (CSM's job)

Metrics:

• Revenue closed

• Win rate

• Average deal size

• Sales cycle length

CSM (Customer Success Manager)

Mission: Retain customers and grow accounts.

Focus:

• Onboard new customers

• Drive adoption and engagement

• Identify expansion opportunities

• Prevent churn

Metrics:

• Net revenue retention

• Churn rate

• Expansion revenue

• NPS / CSAT

The virtuous cycle:

SDR generates pipeline → AE closes → CSM retains/grows → Happy customer refers (Seeds)

See: references/roles.md for role definitions, career paths, and hiring profiles.

Cold Calling 2.0

The outbound prospecting methodology that replaces traditional cold calling.

Why traditional cold calling fails:

• Gatekeepers block calls

• Decision makers don't answer phones

• 1-3% connection rate

• Damages brand

• Not scalable

Cold Calling 2.0 process:

1. Build list → 2. Send mass email → 3. Get referral → 4. Call the referral → 5. Qualify

Step 1: Build Target Account List

Ideal Customer Profile (ICP):

• Company size (employees, revenue)

• Industry

• Technology stack

• Geography

• Pain points

Build list using:

• LinkedIn Sales Navigator

• ZoomInfo / Apollo / Clearbit

• Company websites

• Industry directories

Target: 200-500 accounts per SDR per quarter

Step 2: The Referral Email

The core innovation: Don't email the decision maker directly. Email above them and ask for a referral down.

Why it works:

• Senior people are helpful (they forward emails)

• Referrals have 3-5x higher response rate

• Creates warm introduction from within the company

The email template:

Subject: Quick question

Body:

Hi [Name],

I'm not sure if you're the right person to speak to about [specific topic] at [Company], but I was hoping you could point me to the right person.

We help [companies like theirs] with [specific value prop].

Would you mind pointing me to the right person to talk to?

Thanks,

[Your name]

Key elements:

• Short (< 100 words)

• No pitch, no attachments, no links

• Asks for referral, not a meeting

• Specific about what you do

• Easy to forward

Response rate: 9-15% (vs. 1-3% for traditional cold emails)

Step 3: Follow Up

Follow-up sequence:

Day

Action

Day 1

Send referral email

Day 3

Follow up if no response

Day 7

Second follow up (different angle)

Day 14

Break-up email ("Should I close your file?")

Day 30

Re-engage (new trigger event or content)

Break-up email example:

Hi [Name],

I haven't heard back from you. I don't want to be a pest.

Should I close your file, or would it make sense to chat?

[Your name]

Why break-up emails work: People respond to the threat of losing access/opportunity (scarcity principle).

Step 4: Qualify with ANUM

ANUM qualification framework:

Criteria

Question

Strong Signal

Weak Signal

Authority

Can this person decide?

Decision maker or strong influencer

No buying power

Need

Do they have the problem you solve?

Active pain, looking for solutions

"Nice to have"

Urgency

When do they need to solve it?

This quarter, budget allocated

"Someday"

Money

Can they afford it?

Budget exists, within range

No budget, too expensive

Qualification call structure:

• Build rapport (2 min)

• Set agenda ("I want to understand your situation and see if there's a fit")

• Discovery questions (10-15 min)

• ANUM qualification (built into discovery)

• Next steps (if qualified → schedule AE demo)

Step 5: Hand Off to AE

The handoff must include:

• Account background and ICP match

• Contact details and role

• Pain points discovered

• ANUM qualification notes

• Agreed next steps

• Any competitive intel

Handoff meeting: SDR introduces AE on a brief 3-way call or email, then drops off.

See: references/cold-calling-2.md for email templates, sequences, and scripts.

Pipeline Math

The math of predictable revenue:

Revenue Goal ÷ Average Deal Size = Deals Needed

Deals Needed ÷ Win Rate = Opportunities Needed

Opportunities Needed ÷ SDR Conversion = Prospects Needed

Prospects Needed ÷ Response Rate = Emails Needed

Example:

• Revenue goal: $1M ARR

• Average deal: $20K ARR

• Deals needed: 50

• Win rate: 25%

• Opportunities needed: 200

• SDR conversion: 10% of responses become qualified

• Response rate: 10% of emails get responses

• Emails needed: 20,000

• SDRs needed: ~2-3 (each sends 300-500 emails/month)

Capacity planning:

Metric

Benchmark

Your Number

Emails per SDR per day

50-100

Response rate

9-15%

Qualified opportunities per SDR per month

10-20

AE demo-to-close rate

20-30%

Average sales cycle

30-90 days

See: references/pipeline-math.md for revenue modeling templates.

Building the Sales Development Team

Hiring SDRs

Ideal SDR profile:

• Coachable (most important trait)

• Curious and intelligent

• Strong writing skills

• Resilient (handles rejection)

• Organized and process-oriented

• Not necessarily experienced

Where to hire:

• Recent graduates

• Career changers

• Internal transfers

• SDR-to-AE career path candidates

SDR career path:

SDR (6-18 months) → Senior SDR → AE or SDR Manager

SDR Ramp Time

Phase

Timeline

Expectations

Training

Weeks 1-2

Product knowledge, tools, process

Shadowing

Weeks 3-4

Observe experienced SDRs, practice

Ramping

Months 2-3

50% of full quota

Full quota

Month 4+

100% of quota

Full ramp: Expect 3-4 months to full productivity.

SDR Compensation

Structure: Base salary + variable (commission on qualified opportunities)

Typical split: 60/40 or 70/30 (base/variable)

Variable triggers:

• Per qualified opportunity generated

• Bonus for opportunities that close

• Bonus for hitting/exceeding quota

See: references/team-building.md for hiring, onboarding, and compensation.

Metrics and Dashboards

Key metrics to track:

Leading Indicators (Predictive)

• Emails sent per SDR per day

• Response rate

• Meetings booked per week

• Qualified opportunities per month

• Pipeline value generated

Lagging Indicators (Results)

• Revenue closed

• Win rate

• Average deal size

• Sales cycle length

• Customer acquisition cost (CAC)

Efficiency Metrics

• Cost per qualified opportunity

• SDR:AE ratio (typically 2-3 SDRs per AE)

• LTV:CAC ratio (target >3:1)

• Payback period

Dashboard cadence:

• Daily: Activity metrics (emails, calls, responses)

• Weekly: Pipeline metrics (opportunities, meetings)

• Monthly: Revenue metrics (closed, win rate, cycle)

• Quarterly: Efficiency metrics (CAC, LTV, ratios)

See: references/metrics.md for dashboard templates.

Common Mistakes

Mistake

Why It Fails

Fix

AEs prospecting

Feast-or-famine pipeline

Hire dedicated SDRs

Long, pitchy emails

Low response rate

Short, referral-focused emails

No ICP definition

Wasted effort on wrong accounts

Define ICP before hiring SDRs

Too few SDRs

Can't generate enough pipeline

Pipeline math: work backward from revenue goal

No hand-off process

Leads fall through cracks

Standardize SDR→AE handoff

Measuring activity, not results

Busy but not productive

Track qualified opportunities, not just emails

Quick Diagnostic

Audit any B2B sales process:

Question

If No

Action

Are prospecting and closing separated?

SDRs doing both = bottleneck

Create dedicated SDR role

Is there a defined outbound process?

Ad-hoc prospecting

Implement Cold Calling 2.0

Can you predict pipeline 3 months out?

Revenue is unpredictable

Build pipeline math model

Do you know your lead type mix?

Over-reliance on one source

Balance seeds, nets, spears

Is SDR→AE handoff standardized?

Leads lost in transition

Create handoff checklist

Reference Files

• lead-types.md: Seeds, nets, spears strategy and investment

• roles.md: SDR, MDR, AE, CSM role definitions and hiring

• cold-calling-2.md: Email templates, sequences, follow-up cadence

• pipeline-math.md: Revenue modeling, capacity planning

• team-building.md: Hiring, onboarding, compensation, career paths

• metrics.md: Dashboard templates, KPI tracking

• qualification.md: ANUM framework, discovery questions

• case-studies.md: Salesforce, HubSpot, and scaling stories

Further Reading

This skill is based on Aaron Ross's Predictable Revenue methodology. For the complete system:

• &quot;Predictable Revenue&quot; by Aaron Ross &#x26; Marylou Tyler

• &quot;From Impossible to Inevitable&quot; by Aaron Ross &#x26; Jason Lemkin (scaling to $100M+ ARR)

About the Author

Aaron Ross built the outbound sales process at Salesforce.com that added $100M+ in recurring revenue. His Cold Calling 2.0 methodology became the standard for B2B outbound prospecting and is used by thousands of companies worldwide. Predictable Revenue is known as "The Bible of Outbound Sales" and has influenced an entire generation of SaaS sales organizations. Ross is also co-founder of Predictable Revenue Inc., which helps companies build outbound sales machines.