Why a Service Level Agreement Between Marketing and Sales is Mandatory : Sales Lead Management Association

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Why a Service Level Agreement Between Marketing and Sales is Mandatory

From the section: Articles

April, 04, 2018 |

Unstated expectations can be a source of friction between marketing and sales. Marketing may perceive that it is doing its job based on an “understanding” of what the sales team needs to hit its revenue targets. However, these so-called understandings often lead to painful discussions at the end of the quarter if results fall short.

Service level agreements (SLAs) are the mechanisms used to establish the relationship and deliverables of everyone involved in generating revenue. SLAs can be tough to hammer out but they can save lots of future conflict and grief. I have been involved in constructing SLAs that have transformed marketing and sales organizations and helped drive increases in revenue of as much as 40 percent.

Basically, with a SLA, the marketing executive promises to deliver a certain quantity of raw leads, qualified leads, or whatever it is that the sales department works with, and the sales executive promises to work their part of the process diligently to ensure that the hard work of the marketing department is rewarded with results that really matter — new customers and fresh revenue.

The SLA should contain a few essential items.

Number of leads required
When they are to be delivered
What constitutes a sales ready lead
How leads are distributed to the field
How sales reps disposition leads
How marketing’s contribution is measured through a closed-loop system

One of the trickiest aspects of creating a productive relationship between marketing and sales is establishing the right metrics. Once you do this, you then need to agree on who is responsible for which part of the process. In most scenarios, the marketing VP is responsible for every step through qualified leads, and the sales VP is responsible for creating opportunities and revenue. However, depending on your revenue model, there can be exceptions.

If the handoff from marketing to sales is at the qualified lead stage, then you must gain agreement as to what exactly constitutes a qualified lead. Do not assume that everyone already understand this important definition. This negotiation is critical for both parties because it is what you will use as a basis for evaluating future performance.

While every company’s definition is a bit different, generally, a qualified lead is defined as a prospect with these characteristics:

An identified requirement or project
An established budget for that project
A specific time timeframe for purchase (e.g., one to three months or four to six months)
An identified decision-maker

How to Make Your SLA Work

Give yourself the best chance by adopting these practices with your service level agreement.

Both marketing and sales need to be careful of overpromising. It may seem like a good idea early in the process, but it is usually better to under-promise and over-deliver than vice versa.
A commitment to achieving SLA metrics is part of a winning mindset. Marketers who fulfill on the SLA promise are treated as valuable corporate assets and sales reps that do so are usually making their quota (and then some!). Both will have great job security.
Provide a little slack when your counterparts fail to fulfill their end of the bargain. It might take a couple of cycles until the numbers become highly predictable but the important thing is to keep testing, learning and improving.
Make sure that you have a closed-loop system in place that tracks every part of the process – especially as regards to reporting results of marketing and sales initiatives.
Clean and fresh data is essential to power the closed-loop system.
Regular feedback from both departments is essential. As one example, marketers need to hear from the sales reps how their messaging is being received by prospects and customers.

Lots more information about this and other B2B marketing and revenue growth strategies at www.FusionMarketingPartners.com