The Takeover with Tim and Cindy

The AI SDR Explosion – Why It’s Not Working as Expected

• Tim and Cindy Dodd • Episode 94

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Are AI SDRs just another overhyped tech trend that’s failing businesses?

Companies poured thousands into AI-powered SDRs, hoping to automate cold outreach, book more meetings, and skyrocket sales. But now, 75% of them are ditching their contracts because the results just aren’t there. In this episode, we break down why these AI-powered sales reps are failing and what strategies actually work in 2025 for successful cold email campaigns and direct outreach.

Key Points + Chapter Marker

00:00 – The AI SDR Hype & Why It’s Failing

02:20 – What AI SDRs Were Supposed to Do

03:45 – Major Issue #1

05:09 – Major Issue #2

07:21 – Major Issue #3

09:47 – What’s Actually Working in Cold Email in 2025

15:04 – The Future of AI in Cold Outreach

18:20 – How to Stay Ahead


Resource:
How to Get Leads with Cold Email Marketing

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About The Hosts:

  • Tim & Cindy Dodd are the Co-founders of PEMA.io, based out of Miami, FL. Connect with Tim and Cindy: Instagram

About PEMA.io:

  • PEMA.io is a Inc 5000 Outbound Marketing Agency specializing in Enterprise Sales & Appointment Setting. With over 7-years and 1,000+ clients served in the industry, PEMA is the leading agency for cold outreach appointments & systems. Learn more about PEMA.io here: www.pema.io/discover

00:00
So we're looking at issues like deliverability. Deliverability is still a major, major factor when it comes to whether your cold email is a success or a failure. So we saw things like AI generated emails being flagged by AI spam filters on Google and Microsoft, right? We see things like domains getting blacklisted  really fast if AI is sending like spammy non-human type of emails. AI is a great tool.

00:28
when you put it in the hands of a great copywriter, somebody who understands marketing, somebody who understands what's a good message and what's a bad message. But AI in itself is a terrible copywriter. And if you don't have a master copywriter training the AI,  keeping the AI in line constantly, you're gonna have bad copy infinitely multiplied with AI. Welcome to The Takeover with Tim and Cindy, where we show you how to dominate.

00:54
every area of life  and business. Let's get with it.

01:00
Welcome back to The Takeover. Today we're gonna go over the AISDR explosion and why it's not working as expected. And funny thing is, is we've had a lot of people calling into our company saying, hey, we've gotten this 12 month contract with these AISDRs that are supposed to replace human, know, SDRs and they do everything on automatic with AI and they're all getting burned. They're like, it worked for a little bit and now it's not working at all. And I've been paying this

01:29
12 month contract every month for the last six months and I haven't gotten any meetings from these AI SDRs. And so today we're gonna walk through why 75%, I heard a stat from one of the guys I was talking to, he said 75 % of companies are ditching the AI SDR and we're gonna walk through why it's not working and we love AI. We use AI in every part of our business so we are not anti-AI people.

01:55
whatsoever. We're going to explain to you why this is not working and why so many people are ditching the hype SDRs and they're coming back to  just traditional  good practices and yes, using AI to  put  good practices on steroids, whereas bad AI is just making bad things badder  by a hundred times.  making things worse. Let's talk about AI SDR. An SDR is a sales development rep.

02:25
And how we're seeing companies utilize it is essentially to automate cold outreach, right? So essentially it's doing the reach out, it's sending the messages, it's supposed to automatically, or using AI schedule leads and get appointments. Okay. And so when we think about an SDR, the sales development rep that's going out, it's doing the cold outreach, it's replacing humans doing the manual outreach.

02:50
And essentially they're doing this outreach through email, LinkedIn, and sometimes voice.  And what we're actually finding, which we're going to dive into a lot in this episode, as Tim is mentioning, is that AI alone isn't solving the biggest problems in cold outreach. The principles of marketing and persuasion still remain. So if you're trying to use AI on outreach methods that didn't work,

03:15
not using AI, you're essentially just getting left in the dust because AI is helpful, but it's not the magic bullet to accelerating your cold outreach and getting more leads and booked calls. So let's dive in a little bit more. What is an AI SDR? And we'll talk about exactly why companies are ditching their AI SDRs and what you all can actually do about it. today we're going to give the example specifically of the cold email SDRs, which is, gosh, we've seen those just explode.

03:44
Now, we're starting to see everybody ditch those. We're going to walk through why those didn't work, and we're going walk through  how you get great cold outreach to work.  We're not going to talk about  some of the other channels. Cold calling, for instance, is illegal in a lot of countries like the U.S. There are still some people that are trying to do it, but it is illegal. You can do it on inbound,  but you have to be very careful. There lot of companies breaking a lot of laws right now. Let me be clear,  there are lawsuits that are up to

04:12
$1,500 per legal call violation. So AI can do  10,000 calls a day or 30,000 calls a day.  That's a lot of violations you're  racking up pretty quick. So just be very careful if you are getting to the AI calling. There's a lot of laws around that. We're very aware of what those are. But today the example is going to be around cold email, because I think this is where I've seen it happen more than anywhere else and where it is tanking.

04:38
where it's absolutely tanking and we have so many people reaching out to us saying, thought, I hope that this would be the magic bolt that worked. And now I'm on a 12 month contract and it wasn't much, it's only three or $4,000 a month. But that's still, man, it's a lot of money and a lot of time to waste on something that's just literally not working at all. An AISDR or Self-Development Representative, everybody's calling it SDR, but SDRs are actually for inbound, not outbound. Everybody's calling an AISDR.

05:07
They're calling it an outbound thing,  it's actually should technically be an AI BDR. I don't want to be too much of a sales and marketing nerd, but they're even calling the thing wrong.  But they're calling it the AI SDR, which does automated  outreach  on email and it generates the lead lists.  It drafts the emails. It personalizes the messaging. does the followups.

05:31
It uses all this different stuff. This uses NLP to tweak messaging. And they're going to use all these fancy terms that seem like, wow, this machine is so much smarter. But at the end of the day, essentially what it's doing is they've created an automation to generate lists, draft emails, personalize messages, do follow ups, and all that stuff. Now, the claim is that it saves time, reduces labor costs, increase outreach and volume. And on the surface, of course, the machines are rising. We got to get with the times.

06:01
and AISDR is $3,000 and it can do, it says the equivalent of five SDRs. Well, gosh, that sounds amazing. Now, that's why it took off in 2024 is because on face value, the SDR costs are, this is gonna be so annoying because everybody calls it SDRs, but they're really BDRs. The SDR costs are high. They're going up, like training people, getting real people to go out and get meetings for your sales team.

06:28
is a lot of work. It's expensive to outsource. can be expensive  to do ads can be expensive. So it's like this just seemed like that magic bullet that was going to work. And everybody was talking about these sophisticated tools like cheap ET for turbo  and Claude and llama and all these other different ones. And there's still more coming out these days and there's more automation and you can do faster outreach and hit your total market. I mean,  like see about that.

06:54
one click of a button and I can reach out to 30,000 people in one day. And it sounds so great and it sounds so magical, but let's jump into the reality of why 75 % of the companies that are on those big retainers with these AISDRs, 75 % are ditching those services this year. It comes back to the principles as to why cold email doesn't work for most people, period.

07:20
Right? Like the issues that people had not doing AI, just doing regular outreach via cold email, those issues  using AI were just heightened, right? They were escalated. So we're looking at issues like deliverability. Deliverability is still a major, major factor when it comes to whether your cold email is a success or a failure.  So we saw things like AI generated emails being flagged by AI spam filters on Google and Microsoft.

07:49
Right? We see things like domains getting blacklisted really fast if AI is sending like spammy non-human type of emails.  So you have these AI detectors that companies like Google and Microsoft  are putting in place that is essentially  not allowing these emails to land in the inbox  of your ideal prospect. We've spoken about this in previous episodes and we'll link it in the show notes where we talk about what makes cold outreach or cold emails successful.

08:18
And 95 % of it is just getting your emails to land in your prospect's inbox.  And if they're not landing in the inbox, it means that your prospect is not reading your message and they don't have a chance to respond. So the issue that we're seeing is that these AI generated emails are being flagged. So they're going to spam versus landing in the inbox. And of course, if nobody's reading your emails, you can't get responses and you're not getting leads. The next thing is just bad copy, bad messaging.

08:47
AI cannot at this point write effective sales emails at scale. They just cannot.  It's the garbage in, garbage out. AI is a great tool  when you put it in the hands of a great copywriter, somebody who understands marketing, somebody who understands what's a good message and what's a bad message.  But AI in itself is a terrible copywriter. And if you don't have a master copywriter training the AI,  keeping the AI in line,

09:16
Constantly, you're going to have bad copy infinitely multiplied with AI. Like this thing's just going to go rogue on you. And many  AI SDRs are not getting trained by good copywriters. They're getting trained by people who understand how to put together the technology.  They understand how to connect  this AI tool with that AI tool. And  they're kind of leaning on ChatGBT and these AI tools to create the good copy for them.

09:45
But at the end of the day,  garbage in, garbage out. If you do not have a master copywriter backing this up, and if you do not have data,  great AI requires great data. The more data you have, the better. We've done 150 million reach outs. We 10 million a month  right now. And we've collected data on every single component of every single campaign we've ever watched. We're targeting 10,000 plus campaigns. So when we put...

10:13
data and information and with our master copywriters into AI campaigns, they work super well. But even with all of that data, it still takes that human touch to make sure that the AI is producing good copywriting that human beings read, resonate with and respond to. There was a study done by Litmus in 2024 that noted that AI detected emails have a 60 % lower

10:42
open rate than human written ones. And that alone should give you all the information you need to know that AI cannot write your outbound copy. And this is why some of these AI SDRs are failing because the messaging that they're putting together, that is 100 % generated by AI is not only causing just terrible poor deliverability, it's not landing in the inbox and you're having 60 % lower open rates. So from top of funnel, not getting in the inbox to...

11:10
terrible open rates to probably terrible response rates because nobody's reading those emails. It's just bad thing after bad thing after bad thing. So whether you are using the AISDRs or not, if you are doing cold email, just know you cannot have AI write your copy. And I think that that rolls into the the set it and forget it myth, right?  So the whole myth behind it is the machines are now smarter than us.  Let's just have an AI.

11:35
you know, AISDR just do everything. And to try to replace it all, what I've seen a lot of companies, they basically, they sell this dream that the AI does it all for you. You simply put in one prompt, I need more clients. And it magically figures out all your clients and the exact messaging to write for all of them. The reality is even when you have a master team,  copywriters, outreach professionals,  set the thing up, you have to have  people that know their stuff.

12:05
managing it,  keeping the AI in check. Can you get more done with AI?  100%. Can you get ideations for copy that help you write better copy with AI?  Absolutely. Can you get a list of emails faster? Absolutely. Can you create personalization at scale? Way faster.  Absolutely. Can you do everything much better with AI?  Absolutely. But AI that is not managed well is going to just make bad ideas

12:34
exponentially worse and it's going to go  rogue. so AIs actually require a lot of oversight.  And a lot of times I've seen this where companies are selling, we're going to set you up with this and they're having the companies manage it themselves  with people that actually haven't even done outreach yet. And so they're kind of just relying on this magic AI machine to do the work. And the reality is

12:56
We're just not at that point yet.  kind of a last point here before we kind of jump into what's working in cold email right now and how to leverage AI properly,  I do want to mention we saw the same thing and we still see the same thing happening in SEO.  When AI came out, it was this whole promise of we're going to have this AI machine write you  all of this copy and you're going to magically rank on Google for all these keywords overnight. And guess what? Google cracked down on that. Like  you have Google and Microsoft's

13:24
AI detecting your AI. And guess who's gonna win that battle, right?  Microsoft and Google,  or this like little company that just duct taped chat CPT to N8N or to Zapier and is now calling it  an AI SDR. Like Google's gonna win that fight. So you gotta make sure you're still playing with the right game and this is right game. with like SEO, the value  is I wanna have the best content that when people land on my content.

13:51
oh they wanna stay on the page, this is actually a good copy, this is actually good, people actually wanna link to me and yes there is proactive work you have to do in the SEO world but the same thing is happening in  every area of marketing and I think we saw this big time in  SEO that  SEO written, like AI written automated stuff at scale doesn't work and in fact gets you flagged. So Cindy, what is actually working  in cold email? It's 2025 that we're talking about this now but.

14:21
Timber One's working right now on Cold Emo.  Hey there, I've got to stop here for one quick second to ask you this question.  Have you been enjoying the podcast?  If so, make sure that you are subscribed and take that one extra step  to please leave us a rating and a review wherever you are listening to the show.  Not only does it help us continue to grow and impact more people,  we'll make sure that we show up wherever you are listening as well.

14:50
So the first most important thing, I just want to backtrack and say cold email does work. Okay. So I don't want you to have a doubt in your mind of whether it works or not cold email does work and we're seeing great results from it. It is a great tool for lead generation and getting meetings with your ideal prospect. It's just about figuring out the best way to do it. Keeping a lot of these most important aspects that we're talking about, like deliverability and a few of the other things. So

15:16
The first thing that we're seeing work really well in cold email is hyper personalization beyond just basic or generic personalization. So early on in the year, we released an episode about marketing trends, things you need to look out for in 2025. And this just confirms it. We're seeing hyper personalization increase open and response rates in cold emails. So the more personalized your messaging can be truly speaking to that individual prospects pain points.

15:46
desires, company, and crafting the messaging around that, you're gonna see a double, even triple response rate from just a generic type of email. So you definitely wanna be looking at hyper-personalization because that is just transforming cold email results across the board. And you might be wondering like, what is hyper-personalization? Maybe we have an email that converted super well  a year ago, and now it's starting to produce a little bit less and a little bit less and a little bit less, and we don't know why.

16:14
Well, if I can simply add a personalization and really simple would be like a first line. Like this is pretty old school. People have been doing this for a while. But where that first line is personalized to that human, like it does data mining and it can find out what school they went to, their career path. And it kind of creates a unique first line. We call it like an icebreaker. That just that very first line, it seems like, I saw you went to CU Boulder, da da da.

16:38
Or I saw that you had you started your career at such-and-such Wow what an inspiration to see you grow so fast in your career  And then you transition into your your pitch message That's a really just super simplified version  that alone right there creating a custom icebreaker will double your response rates Immediately just with a super basic one now you can get into more more advanced where you kind of roll that first icebreaker into a more personalized pitch message

17:04
and that's more advanced stuff we won't get into now, but just that hyper-personalization where you have good copy. mean, remember, the AI is not writing the copywriting for us, but the AI is  tweaking it to be very personalized for that specific prospect. So guess what happens, because we're talking about deliverability. We need to actually show up in the inbox and not the spam box. Well, how do you get into the spam box?  You get marked as spam, and when enough people mark you as spam, you start going into the spam box.

17:34
Well, what happens now when you have personalization where people actually  respond, that's a positive signal to  what's called the ESPs,  which is like the Microsofts and the Google inboxes or mailboxes. When they see people actually responding,  they see that as a positive signal, so your domain reputation actually has a positive increase. Now, there are  warmup tools out there, and we do suggest them.

18:01
Everybody thinks, oh, I just need to do like 40 or 50 more. You gotta do a lot of warmups. You gotta do a lot of warmups to get your inbox healthy, but nothing keeps your inbox healthier than getting good opens and good responses. So hyper personalization is a great, as long as you are already getting into the inbox and passive spam filters, hyper personalization is working extremely well right now. Another thing that's very important to note is that even when you write really good copy,

18:26
it might actually still look like AI copy. So you got to do this thing where you actually run your copywriting by an AI detector to make sure that your copywriting doesn't look like it's AI written. Because you might be writing your copy and you think, well, I wrote this as a human or I tweeted a little bit as a human, but you actually might find that the spam filters and the AI filters actually see that it looks 70 % AI generated. make sure before you're sending out any messages to run it through a tool,

18:56
that can confirm what percentage of your email copy looks AI generated so that you are not  accidentally  ending up in the AI spam filters. Another thing that's working really well in cold email that's contributing to exceptional results is having the right data. Do you have the right email addresses? Have those email addresses been verified and double verified to ensure that not only are you reaching out to the right people, but their email addresses are not bouncing or...

19:24
causing you to land in the spam folder. We must not neglect this critical part of essential cold email because sometimes we can get caught up in the AI is going to do it all and it's going to look great like these AI SDRs are doing.  But if they don't have the foundational principles like having the right data, your cold email is not going to be effective.

19:43
Because here's the two things that can happen when you don't have a good list is number one, maybe your list is going to get a bounce rate. And if your bounce rate is above 0.03%, which bounce rate is going to be that you have emails that are no longer active. If you don't have a really well-clean list, you're going to get a high bounce rate. High bounce rate affects your domain. But also,  if you're reaching out to the wrong people with the wrong message that's not going to resonate,  number one, you're

20:06
not gonna get the positive signals, which is them replying and responding and  doing back and forth with you, but you're actually gonna get the negative signals, which is people marking you as spam.  And so, making sure that you not only have a clean list that's not gonna bounce, but also that that list is a very dense population of people that would be interested  in your service and have a positive response to your message is gonna be very important  for just the overall domain health. Like,  Google or Microsoft wanna see?

20:36
Do real people actually like this person's emails that he's sending out or do they mostly not like the emails that this person's sending out? And based off of what the world says about your emails,  right, that's gonna determine your domain health. And having a good list of good people that are going to be interested in your product is a critical step  in the process.  And I'll give a quick little tool just to always make sure you double verify. So you can use like Never Bounce and Zero Bounce, whatever list you buy, always make sure you're.

21:03
putting it through at least we call it a single or double wash. Meaning we're running it through like a zero bounce which verifies the emails for a second time and then never bounce which verifies it again. So you might have a really big list at first but after you've washed it two or three times it's gonna be much smaller but that much smaller list is gonna be very very active and accurate emails to be sending to. So some final thoughts and to recap, AI SDRs are not replacing humans. That's why we're seeing the rise of companies opting for

21:31
not AISDRs because the performance is not as great as they expected. So though AISDRs aren't replacing humans, they are changing the way humans work in outbound sales. Always remember that companies and individuals that understand AI's limitations and strengths are the ones that are seeing the best results. So when you are looking at your cold email, in this case that we're talking about the AISDRs, always remember, am I keeping the principles of persuasion in mind?

22:01
Do I have copy that converts? Am I adding the human element like hyper personalization beyond the basics to my outreach to ensure that  one, not only do I land in the inbox, but that my outreach is effective and is converting into leads and sales. When we do an AIS, we're gonna call it an AIBDR, because that's what they are, man. So when you hear  Tim and Cindy preach from the mountaintops,  AIBDRs are here.

22:30
and you can run an autopilot, you better believe that AI has gotten smart enough to do everything beginning to end. Until you hear us, preacher from the mountaintops,  AI BDRs  are here  to stay.  Don't listen to all the hocus pocus that's going on out there because at the end of the day,  garbage in, garbage out. If you don't have the right data to feed it, AI is dumb without data, right?

22:53
AI is, if ChatGP didn't have any data whatsoever, it would be absolutely dumb. So it's the data that feeds the machine.  And when it comes to specialties and specializations like  cold outreach, which is incredibly difficult,  like you're not gonna find data on the internet about how to be effective with cold email campaigns right now in this moment.  That's gonna be private information that companies have.

23:19
having tested their own outreaches to their audience, their market, or like Pima, we're doing  over 150 million reach  outs, 10,000 campaigns we've collected that on.  Now we can feed that data to the machine, and even with that much data, I don't think AI is at the point where it's ready to be fully run and fully automated, but you better believe  the moment you hear Tim say  AIBDRs are here. Listen up, listen up. So that's it.

23:47
You know, that's why a lot of people are ditching the AISDRs that the magic, but this magic bowl didn't quite work. There's always a magic bowl of every generation in this one didn't quite work at least yet. And I don't think it's going to be working anytime soon. And when it does, we'll let you know. And we'll be on the front line with that. If you got any value from this episode and there's somebody else that you know, that's in marketing, in sales, a CMO, CRO, an entrepreneur, anybody that needs more leads and clients, send this episode to them because I'm telling you, I'm seeing so many

24:16
People  get tricked with this and here we are a year later after I've been telling people not to do it, it doesn't work.  Now we're starting to see these big long contracts that people are paying and not getting results on and they're ditching their AISDR. So  if you know anybody else in marketing and sells that needs help with lead generation, send this episode to them. Make sure that they're in the know so that they don't get duped with these AISDR companies. So that's it. Remember, domination is not a destination. It is a way of life. Stay with me.