It is pretty common to have a Service Level Agreement between your business and your clients. An SLA is an agreement between a service provider and its customer that guarantees a certain output (it may also been known as a Scope of Service). Creating an internal SLA between your sales and marketing is an important part of the sales enablement strategy. When it comes to sales and marketing, this is actually a two-way agreement, with marketing promising a certain number of leads to sales, and sales promising to contact those leads within a certain timeframe.
In order to create a simple SLA, you need to know three things:
- The average conversion rate from lead to opportunity
- The average conversion rate from opportunity to closed sale
- The average value of a sale.
These three pieces of information, will allow you to calculate how many qualified leads marketing needs to send to sales in order for your company to meet its revenue goal.
After coming up with the metrics of your SLA, the next step is to look at the logistics of the deliverables. Let’s start with marketing’s deliverables:
Your SLA is going to require that marketing delivers a certain number of leads or a certain amount of lead value every month. It’s great to know exactly what marketing has to deliver within a given month, but if you don’t pay attention to pacing, you can run into serious trouble. As marketing gets better at delivering the right number of leads every month, they’ll need to also get better at delivering those leads at a sensible pace which sales can handle.
Sales Accountability in the SLA
Knowing what timeframe to set for sales to contact a lead is not always easily figured out. We know what marketing needs to do thanks to the math mentioned above. Look at how much revenue you need in a month to meet your company’s goals, and you figure out exactly how many leads you need to hit that goal. But how quickly should sales contact those leads?
Answer: As quickly as possible. Why? Because the faster you contact your leads the more likely they are to close.
The only problem with this answer is that it isn’t specific enough to go into an SLA. An SLA needs a SMART goal in order to create accountability for the sales department. So work with your sales team to figure out what the fastest reasonable timeframe is, and then look for ways to shorten it as time goes on.
So start with an SLA that requires marketing to deliver a certain number of leads each month and requires sales to contact those leads within a specific timeframe. Once you get that in place, you will be able to start experimenting with your lead generation strategy and sales process. Look at new ways to reduces the timeframe and pace of your sales outreach. From there, you’ll be able to build an SLA that completely improves the way your company performs.