4 Ways to Keep the Peace with a Service Level Agreement
Even though sales and marketing are on the same team, that team may look like the '78 "Bronx Zoo" Yankees at times.
According to a study by the CEB, 87% of sales and marketing professionals use negative terms to describe each other. Now, why would grown men and women resort to childish name calling?
Much of this confusion can be attributed to poor sales and marketing alignment and the lack of a service level agreement.
Don't just count on luck to cultivate a great relationship between sales and marketing, there needs to be a conscious decision to work together to set goals and create an agreement to help align these naturally bitter teams.
A common disagreement can go something like this...
Marketing Manager: Why did your team only close three leads this month?
Sales Manager: Your marketing team was giving me much in the way of qualified leads.
Marketing Manager: This report states that my team sent sales over 100 leads in the last month.
Sales Manager: Again...75% of the leads sent had less than 20 employees and were outside of the state, making them unqualified.
And the disagreement between the two teams will continue.
Just because marketing generated 100 leads doesn't mean any of them were actually qualified. The two teams probably don't have the same definition or set of criteria that makes a qualified lead for the company.
To help keep the peace see how you can create an alignment between sales and marketing with a service level agreement.
Sales and Marketing Alignment
Develop a Marketing Goal
To keep this disagreement from happening month after month, the marketing department should be setting a concrete numerical marketing goal that aligns with the sales team.
Everyone knows that salespeople are driven by a set quota, give your salespeople a number that they have to reach, say 10 customers a month. However, sales isn't just in this by themselves, marketing has to help sales meet that goal by generating a certain amount of qualified leads.
How do you know how many qualified leads you need to help sales reach their goal? Great question, you just need to wipe some dust off your math skills and keep reading to learn how you can create a service level agreement.
Now that each team has a better understanding of their role in "SMarketing," it is extremely important to maintain open communication between the two teams. Each team should be consistently tracking their goals and addressing any concerns along the way. If the other team isn't on track to meet the goal, don't be afraid to address your concerns.
Help them get back on track, the success of sales relies on the success of marketing. Think of achieving your goals as a team effort, each team should work hard to fulfill their half of the service level agreement.
Here is a list of some reports to help keep sales and marketing accountable:
- Daily leads waterfall graph, compare that graph against your goal for the month.
- Develop a list of workable new leads, breaking them down into categories such as open, in progress, qualified, unable to qualify and unqualified.
- Monthly marketing report, should show the impact of recent activities. Look at visits, leads and customers by source. Sources can include; organic search, referrals, social media, email marketing, paid search, direct traffic and others.
- Determine how effective your web pages, landing pages, blog articles call to actions and other content are performing.
- Sales should also be calculating how fast it takes for them to follow up with a lead. How many days, 0 to 10? 11 to 20? or 21 to 35 days?
Develop an Agreement
Hopefully, each team is effectively communicating with each other and understands what information can help them become more accountable. Sales and marketing should now develop their service level agreement, detailing the marketing goal (that could be number of leads, number of qualified leads or revenue) and the sales activity to help them follow up with leads generated by marketing.
With an agreement, it makes it easier for sales and marketing to work together.
Don't have a service level agreement in place? We've got you covered.
How to Create a Sales and Marketing Service Level Agreement
1. Calculate Marketing
Before you start calculating anything for the marketing side of your SLA, you will need for gather some information.
You will need the following information to calculate some marketing SLA metrics:
- Total sales goal in terms of revenue
- Percentage of revenue that comes from marketing versus sales generated leads
- Average sale
- Average lead to customer close percentage
I'll give you a second to gather that information before we start doing some calculations.
You will want to calculate the following:
- Revenue goal, generated from marketing = sales quota X % of revenue from marketing generated leads
- Customers Needed = revenue goal, generated from marketing / average sale
- Leads Needed = customers / average lead to customer close percentage
Now that you know how to calculate the marketing side of your service level agreement, you will want to make sure that you reevaluate it every month. Due to different factors and time, your numbers within your calculations can actually change. Therefore, be sure to recalculate your marketing SLA, either every month or every quarter. To be the king or queen of your marketing SLA calculations, you should create a spreadsheet containing your calculations.
Track the following metrics in your spreadsheet:
- Number of marketing generated leads
- Number of leads that became customers
- Revenue from closed leads
- Total revenue generated by marketing leads for the month
- Total revenue closed for the month
- Average sales cycle
If you're not just interested in the quantity, but also the quality of your leads and customers, you can take your marketing SLA calculations one step further by doing the above analysis for each subset of leads and set up separate goals for each quality level of leads. We all know that all leads are not the same, therefore, your sales and marketing teams value some leads more than others. If your sales team has a hard time determining which leads are more qualified than others, look into implementing lead scoring.
2. Calculating Sales
Just like with marketing, you should also be calculating the sales side, in regards to the speed and depth of follow-up for marketing generated leads. Do you know the optimal number and frequency of follow up attempts should be made for each lead? If not, you should develop a chart outlining the speed from conversion event to sales follow up. checkout the extensive analysis done by InsideSales.com, who found that:
- The first 5 minutes are critical to develop higher contact and lead qualification rates, than waiting 30 minutes
- Recommended follow up attempts is between six and nine calls
Not every lead is going to be sales ready, perhaps marketing needs to nurture those leads and help push them down the sales funnel. Once a visitor becomes a lead, either sales or marketing should make contact with each lead to start developing a relationship, whether it's through lead nurturing or following up with a sales call.
3. Setting up Marketing SLA Reporting
You've finally set your goals, now you need to track your progress. This isn't something that you should just be checking once a week, it should be done daily. A great tool to help you track your progress is a daily lead waterfall graph.
If you aren't using HubSpot, you won't automatically see this graph. A great option that HubSpot offers allows you to change what you're comparing the results to. You can choose from custom goal, last month, this month, last year and last three month average.
For those not using HubSpot but still looking to utilize a daily lead waterfall graph, you can create your own in excel. To achieve your goals and to ensure you're on track, you will want to calculate your daily goal for each day of the month by multiplying 1/n (where "n" equals the number of days in the month) by your monthly goal. Just remember to graph your results everyday.
4. Setting up Sales SLA Reporting
Sales should be reporting and tracking their progress with two graphs, one monitoring the speed of your sales people following up with leads and the depth of the follow up.
- Speed of follow up should be calculated by taking the date the lead was sent to sales and the date the lead got their first follow up. The difference between the two will tell you how many days it took sales to follow up.
- With depth of follow up, you want to focus your attention on the leads that have not been reached yet. Within a particular time frame, a week, two weeks, or a month, look at the average amount of follow up attempts that your sales team has made.
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About Carolyn Edgecomb
Before moving into a portfolio management position, Carolyn was a key contributor to the IMPACT blog. (In case you thought she sounded familiar.) Nowadays, as our Community Coordinator, she manages and maintains the logistics of daily, weekly, and monthly operations from a portfolio management perspective to ensure each client, Pod, and the overall Community is performing at an acceptable level. You might call her the queen of post-it notes and organization. With a passion for all things inbound marketing and project management, she is always looking for new ways to improve our client services department. Outside of IMPACT, you'll find her on Pinterest, listening to country music, reading a book or trying out a new recipe.