The Necessity of Marketing-Sales Service Level Agreements (SLAs)
Instituting a comprehensive Service Level Agreement (SLA) between Sales and Marketing is vital to establish mutual accountability and ensure that the departments work in tandem and take proper actions to move the organization forward. An effective Marketing-Sales SLAs elucidate the complex process of B2B demand generation and sales so that the stakeholders involved in business development have a conspicuous roadmap. SLA eliminates unknown expectations between departments, and futile efforts on pursuing low-value leads, and lays out a streamlined way of functioning.
Organizations using Marketing-Sales SLAs have witnessed higher win rates, substantiating the need to align Sales and Marketing. HubSpot’s State of Inbound Marketing report highlighted the following advantages for companies that maintain their Service Level Agreement. Companies with an active SLA are:
- 34% more likely to experience greater year-over-year ROI than those companies that aren’t.
- 21% more likely to get greater budget allocations.
- 31% more likely to be hiring additional salespeople to meet demand.
According to InsideView’s 2018 State of Sales and Marketing Alignment report, when asked to name the biggest challenge to aligning Sales and Marketing departments, 43% of respondents referred to a “lack of accurate/shared data on target accounts and prospects.” Organizations have realized the need to break down silos between Sales and Marketing to maintain a competitive advantage and SLAs are a stepping stone.
Creating A Robust Sales & Marketing SLA
Developing a Marketing-Sales SLA requires a synergistic effort by the leaders of all disciplines to establish roles, responsibilities, processes, targets, and accountability. Let’s delve deeper into the process of charting SLAs.
– Define Your Ideal Customer Profile
SLAs should essentially begin by clearly defining and communicating the criteria to qualify the best-fit customers for your organization whom you are trying to attract. Having thorough profiling of your buyer’s persona eliminates the room for misinterpretations. Not formalizing the definitions for your customer profile will negatively impact your demand generation process.
– Standardize Lead Qualification
Sales and Marketing teams must clearly define what qualified, marketing qualified and sales qualified leads are. This entails defining the process in detail and making the process scalable and sustainable. Standardizing lead definitions enables the efficient qualification of leads and sets strategic parameters that optimize the time and effort spent to pursue and nurture leads.
Although there are many factors that can be considered in defining leads, the important aspects of establishing the rules for MQLs (Marketing Qualified Lead) and SQLs (Sales Qualified Lead) are fit and interesting. Fit determines whether a lead falls into the defined target persona — as either an influencer or decision-maker. Interest assesses a lead’s knowledge, consideration, and urgency along the buyer’s journey. Enterprises can also improve lead assessment by incorporating Lead Scoring. This is done by setting the basis for scores using the desired fit and interest parameters. Lead Scoring can also be automated with an inbound marketing platform such as HubSpot.
– Establish a Process to Manage and Nurture Leads
One of the most pressing issues between salespeople and marketers is the misalignment in understanding how to manage leads. Having a Service Level Agreement (SLA) eliminates this issue as it requires the teams to clearly lay out how a lead should be handled. Closed-loop reporting can greatly improve communication and understanding between the teams.
Marketing’s lead nurturing process is a well-crafted process that helps to move prospects further down the sales funnel. Lead nurturing workflows should clearly communicate the details of each stage with Sales, which enables a subjective determination and personalization of workflow assignments for leads.
– Define Targets and KPIs
While setting targets, it is essential to factor in the functional areas and maturity of the sales and marketing team, historic performance, and lead generation drivers. The Marketing team should be assigned specific targets on how many leads to be sourced, targets for each phase of the funnel, and how many SQLs should be handed over to the sales team.
Instituting Key Performance Indicators (KPIs) will help in managing the targets as well as shed light on areas of improvement and opportunities to improve. All the stakeholders who are part of the SLA should regularly meet to assess KPIs and update targets.
– Define Handoffs
Having an efficient handoff between marketing and sales is pivotal in improving lead velocity. SLAs should thus lay down the handoff between the teams. It must include what will trigger the lead handoff from Marketing to Sales, outline the information that will be shared at each stage, and detail how Marketing will notify Sales of these leads. Without a robust handoff process, the Sales and Marketing team will be left in ambiguity to handle leads and incapacitated to sustain alignment and growth.
– Standardize the SLA Review Process
Determine the frequency and period of time to review the assumptions, processes, and targets established in the SLA. Many organizations review the SLAs every six months while high-growth organizations do it every quarter.
Components of a service level agreement
SLAs should be well-detailed and constitute key aspects of the agreement. Following are the components of a well-drafted SLA which should invariably be incorporated:
- Overview — SLA should briefly describe the spirit of the contract for future reference.
- Common Goals — Common goals for Sales and Marketing should be derived strategically that emphasize the brand as a whole.
- Cross-functional Support — Mutual commitment to carry out the necessary tasks, be it weekly reporting or a software subscription, to enable efficient functioning should be outlined.
- Points of Contact (POC)— POCs for any deliberation, assistance, or grievances should be identified. POCs are usually the department leads.
- Accountability — When performance doesn’t meet expectations or if there is a dereliction of duties from the teams, SLAs should define the nature of accountability if one of the teams fails to hold up its end of the deal.
- Termination/Revision of SLA — If the agreement isn’t mutually value-adding, it is necessary to outline the terms in which the SLA may be canceled and/or revised.
Service Level Agreements standardize the measurement and monitoring processes from which progress and results have ensued. An organization with well-aligned sales and marketing has a common goal and expectations clearly defined for each team to achieve the goal. Marketing-Sales SLAs take into account all the issues and exposes shortcomings in the sales/demand generation process that are likely to hinder progress. Creating, monitoring, and revising SLAs requires the stakeholders from Sales and Marketing to analyze contributors to the success and ensure that the teams are working synergistically to reach the organization’s true north.