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How to Create a Sales-Marketing Service Level Agreement (SLA) at Your Company

By December 22, 2016August 13th, 2017Inbound Marketing

This blog post is part of “The Ultimate Guide to Lead Generation” blog series.

Service level agreements are the holy grail for sales-marketing collaboration. The prizes are predictable lead generation and sales conversion that runs like a Swiss watch.

In the world of online marketing and sales, it is more important than ever that these two functions be closely aligned. Why? Because in the digital world, marketing is tasked with generating leads. Because buyers of everything shoes and books to medical and manufacturing technology research products online long before they contact a sales person. Where previously customers may visit a business early in the sales process, now customers make an average of 12 web searches before contacting a supplier. This makes marketing responsible for filling the top of the sales funnel with qualified leads.

A service level agreement between marketing and sales might look something like this:

Owner Marketing Marketing Sales
Current Performance Marketing Qualified Leads (MQL) Sales Qualified Leads (SQL) Closed Business
1,500/mo 20% (300) 10% (30)
SLA Q1 1,800  growth 25% (450) 15% (68)

And this is where collaboration is required. Marketing and sales must agree on what makes for a marketing and sales qualified lead and; in the best case scenario, marketing can guarantee a specified volume of leads that meet that criterion each week or month in the form of a service level agreement.

Getting Qualification Right

A service level agreement between marketing and sales will look beyond clicks and downloads to determine lead qualification criteria. Just because someone downloaded a white paper or e-book doesn’t make them a sales qualified lead. There’s just not enough data to indicate the buyer intent or decision-making process. Other criteria like company size, revenue, sales cycle, industry, the role of the individual lead, budget, sales goals, search and website visit behavior can be identified and measured. Measuring all of this data will give marketing and sales, over time, a better and better idea of what indicators and signals are most likely to result in sales, and then focus on getting more of those types of leads in the pipeline.

Improve Funnel Performance

Gathering and analyzing this data can help companies understand their sales funnel performance, and then systematically improve it. Here is an example of a basic funnel performance matrix.

alanizNote that this matrix measures lead generated, passed to sale, conversions, revenue and customer value. It would make sense that improvements at the top of the funnel–”leads passed to sales” would result in more customers, as would improvement in conversion percentages. If marketing were able to double the Enterprise leads passed to sales in this example, at the historical 3 percent conversion rate, it would result in double the sales.

Increase Commitment and Accountability

Committing to this kind of numbers is what service level agreements are all about. Marketing commits to a certain number of MQLs and the agreed-upon qualification criteria to move these leads to SQLs. Sales commit to closing a certain percentage of SQL opportunities. Both teams are accountable for their numbers.

The beauty here is that everyone knows when his or her job is done. There is no mystery about “impressions” or other soft marketing metrics. Sure, impressions, awareness, and brand building are important, but when it comes to the marketing-sales relationship, lead generation, and closed business are the numbers that matter most.

Marketing = Hard Numbers

This shift moves marketing into the world of hard numbers and hard deliverables. This is good news for marketers that may have been undervalued in the past. It is easier than ever to demonstrate measurable value to a business. In order to do this, however, you must be able to identify those signals and indicators that trigger sales and measure them rigorously. Identify what makes an MQL and SQL, and what actions should be taken at each qualification stage. It is also important to continually ask if the qualification criteria should be changed, or if new criteria should be added. Few markets are static–buyers’ needs change, competition changes, and new products emerge.

Marketing and sales need each other in order to deliver the value they are capable of delivering to businesses. Sales need qualified leads that are mostly found through engaging people as they search online for solutions to problems, and marketers need sales to turn leads into customers, or neither team wins.

This blog post is part of “The Ultimate Guide to Lead Generation” blog series.