What is an SLA?
SLA stands for Service Level Agreement, which is used as much between clients and providers as it is between teams in a company. In this case, we are going to be talking specifically about an SLA between marketing and sales teams while using the Inbound Methodology.
What should be in an SLA?
An SLA should be detailed, clear, and easy to understand for both teams. Here are some questions that we will answer in this post:
- What is an MQL (Marketing Qualified Lead) and how can you define MQLs in your company.
- How many qualified leads should the marketing team be bringing to the sales team?
- In what Lifecycle Stage of the lead should it be handed over from the marketing team to the sales team?
- How quickly should the sales team contact a qualified lead?
Establishing an SLA is very important, because fluid communication between sales and marketing teams produces the best results, even in the short term. Businesses that do not have a unified sales and marketing strategy don't achieve their goals, offer a sub-par experience for their leads and clients, and generally have poor organizational culture.
Standardizing organizational objectives between the sales and marketing teams is a crucial step for companies looking for sustainable growth.
That said, it's not uncommon to find organizations that still have not standardized their processes completely; however more attention is being paid to SLAs, and more companies are starting to develop them.
A HubSpot Inbound Marketing Report pointed out three irresistible advantages for companies that have an SLA:
- Companies that have an SLA in place are 34% more likely to have a higher year-to-year ROI (Return on Investment) when compared with companies that don't have any agreement within their sales and marketing departments.
- These companies have, on average, a 21% higher probability of obtaining larger budgets for these departments.
- They take on 31% more new hires in order to satisfy higher demand.
Everything that is measured is completed. Everything that is measured and controlled is completed better and faster.
How to create an SLA between your sales and marketing teams:
Follow these steps by downloading the free template here.
The process begins by bringing together the stakeholders, in this case the managers of each department, to discuss: roles, responsibilities, processes, and objectives. There should be at least one leader from each department involved.
Step 1: Define your Buyer Personas (profiles of your ideal clients)
A buyer persona document will detail the audience that your company wants to sell to. An effective SLA starts with a clear idea of who your ideal clients are, and a profile of each key group. If it is not clear who your purchasing audiences are and how they behave, it is difficult to achieve alignment between sales and marketing departments.
Characteristics of the company:
- Ideal Buyer Persona
- Competition
- Challenges
- Objectives
Profile of the Persona
- Demographics
- Role/Responsibilities
- Priorities
It's important to include this in the SLA to precisely define and communicate all criteria and the type of clients that you want to have.
When this step is skipped (a mistake made by many organizations) it leaves too much up for interpretation, making it more difficult for team members to focus on the ideal client.
Only after familiarizing yourself with the worries, needs, and tastes of your ideal Buyer Persona will you be able to truly target them in your marketing and sales to obtain effective results.
Step 2: Standardize the Lifecycle Stages of your Contacts.
It is important to define what a lead is for your organization in order to define each part of your sales funnel. First of all, you should establish which leads should be qualified by the Marketing team and which are ready to be sent to the sales team.
For a useful funnel, these stages should be well-defined within your organization:
Leads -
These are all the people that you have in your database that could possibly become clients. They belong to the Marketing team, and should not yet be passed along to the Sales team.
Marketing Qualified Leads - These are the leads that have already been filtered by the Marketing team. They still belong to the marketing team.
Sales Qualified Leads - These are leads that already meet all requirements for them to be handed over to the Sales team including:
- Authority: The lead is able to make the purchasing decision within their company.
- Necessity: They have a demonstrated need for your services.
- Understanding: They understand what your company does along with a basic understanding of our value proposition.
- Fit: Their profile fits with your company.
Step 3: Establish Objectives and Clear Goals.
When you define and establish objectives, you should consider the tenure of your team members together, the departments involved, previous results, and lead generation. Don't pull numbers from the air, your goals should be based in the actual situation of your company.
The Marketing team should be assigned objectives based on: total number of leads obtained, number of MQLs, and number of SQLs.
All teams related with the SLA should meet once a month in order to go over results and update objectives. You can make a simple table that allows you to display the number of contacts fore each Lifecycle stage.
Step 4: Define How Leads are Passed to the Sales Team
Increasing lead generation is a true team effort. You should determine at which point a lead is ready to be passed from the Marketing team to the Sales team, and how said leads are handled by Sales team when they receive them.
It is essential that your leads are well defined at each stage, since it provides a clear structure to guide your Sales and Marketing teams in order to maintain alignment and growth.
Step 5: Establish a Lead Management Protocol
In an SLA, it is common to hear from the Sales or Marketing team, that the other team does not know how to properly handle the leads assigned to them. This section serves to eliminate this concern by addressing the proper way for leads to be managed throughout their Lifecycle.
Leads should be carefully managed, since any one could become your next client. Discover when, how, and how many times you should contact each lead. How you close the Lifecycle of the lead is important, along with how you generate lead reports, and how you face rejection. In order to improve Sales and Marketing processes, it is also important that you make a report at the end of the Lifecycle. For example:
- The marketing team should generate 200-400 leads per month.
- The sales team should work with 150-200 MQLs per month
- The conversion rate for MQLs should be at least 8%
- The sales team should produce 15 new SQLs per month.
Step 6: Find, Measure, and Evaluate Performance Metrics
The SLA should clearly define the key performance indicators that will be universally to evaluate the progress and effectiveness of the lead generation process.
Your follow-up with the team should highlight opportunities and performance characteristics together with individual contributions, while also highlighting and accelerating learning in your team so that can always be improving. Some metrics that you should be measuring include:
- Lead conversion rates
- Number of contacts required in order to get an MQL that converts to an SQL
- Monetary value of the SQLs that you obtain.
- Average time it takes to convert a lead from an MQL to an SQL
- MQL to client conversion rate
- Tasa de conversión de un MQL a Cliente
Step 7: Standardize the Process and Review SLA
Determine the amount of time needed to completely review standards, processes, and objectives established in the SLA, for most companies 6 months is enough time.
However, for businesses with large growth, the SLA should be revised every 2 months.
Making an SLA is challenging, but it is well worth the work. Clearly defining and communicating the expectations that you have for your Sales and Marketing teams will help you to define, reach, and increase the income objectives that you have established
