Sales and marketing are part of the same team within an organization. Both have responsibilities that center around revenue growth. Their end goal is really the same thing…bring in more highly profitable customers.
The reality is sales and marketing teams aren’t always on the same page. For many, team meetings (if they even happen) can be more like a battle between enemy forces than a cooperative effort to move their combined efforts forward. It happens in small businesses and large businesses. As you can imagine, this leads to lost productivity, fewer opportunities and less growth.
Last month, Doug wrote a post about the importance of sales and marketing alignment and the positive impact establishing a sales and marketing service level agreement (SLA) can have on your business. In fact, according to HubSpot’s 2015 State of Inbound report, companies with an active SLA are 34% more likely to experience greater year-over-year ROI than those companies that aren’t. That statistic alone should make you think about establishing an SLA, right?
Despite the evidence that sales and marketing alignment can have a positive impact on the bottom line, there are still many small and mid-size companies that are reluctant to spend the time creating a documented SLA. It is a very rare event when we meet a prospect (and we meet a lot of them) that has an SLA in place.
I experienced this first hand when working for a small manufacturing company. The company was a small business and in turn, our sales and marketing team was also small. There were six of us total, all with very distinct roles.
I had read about SLAs and thought it provided a great opportunity for us to document our organizational goals as they related to leads, growth, etc. I thought it might help us feel more like a unified team. I presented the idea but it was shot down by my teammates. The other five decided that our team (and company) was too small to spend time creating the SLA. They felt that SLAs were meant for larger teams with more players and where there was more at stake.
I was disappointed by their response. Since then, I have learned that this response to the idea of an SLA for a small business was not unique. For some reason, many believe that you have to be a big company to create an SLA. That is simply not true.
Everyone needs an SLA
All companies, big or small, need to keep generating business in order to stay alive. SLAs provide a mechanism for the team responsible for generating business to be very clear on the goals and responsibilities of the team members. Company size should not be a factor in the decision to establish an SLA.
When we ask about SLAs the most common push back we get from a prospect is about the size of their company or team. They feel that an SLA is far more formal than what is needed. Often they’ll have 3 – 6 people on the sales team and 1 or 2 in the marketing department. They say that they’re small enough that they can stay aligned.
The reality is that if you’re a sales and marketing department of one person doing everything, you should still have an SLA. The value behind an SLA isn’t the document itself, but the thinking it forces you to conduct and the clarity that is created. Here are five reasons ALL companies – regardless of size – should create an SLA.
1. Defines a common goal
Establishing a shared goal between sales and marketing opens the door to collaboration. Having a clearly defined goal also helps to set expectations for the entire team. Make sure the goal ties back to overall company performance and is clearly communicated.
2. Establishes definitions
With the experience I shared earlier in this post, one of the reasons I personally was pushing for an SLA was to force our team to agree on definitions. There was, at best, a very murky definition of a lead…just a lead, not even marketing-qualified (MQLs) or sales-qualified (SQLs). At that time, I felt that the lack of definitions was making it difficult, if not impossible for us to all be on the same page.
Regardless of company size, clearly defining what a lead is, what an MQL is and what an SQL is (and what they are not) will make measuring whether or not you have enough of them at any point much easier. When no one is sure about these definitions, it is easy to point the finger at someone else and argue that leads aren’t being generated or handled correctly.
3. Defines lead classification and lead management
In addition to defining leads, an SLA will also provide a road map for how to qualify or classify the leads. At Imagine, we use a classification system that is assigned to a lead as part of our lead triage program. The SLA provides a place where the classifications can be clearly defined.
Depending on a lead’s classification, it needs to be managed in different ways. An SLA provides a place where how they will be managed is clearly defined and agreed upon by sales and marketing. Part of managing a lead is knowing when it should be moved to the next phase. For example, when does it move from an MQL to an SQL and what happens from there. A well-written SLA provides this information.
4. Establishes metrics
All businesses, big or small, need to determine metrics. In fact, according to the 2015 State of Inbound report, marketers who check their metrics at least 3x per week are over 20% more likely to achieve positive ROI than those that don’t. Having metrics defined in the SLA creates accountability and keeps everyone moving in the same direction.
5. Enables the effective allocation of resources
The most important go-to-market decision any executive makes is how they allocate resources for growth. Does the focus need to be at the top, the middle or the bottom of the funnel? Certainly all aspects need to be supported, but to what degree? The answer to this question is always changing based upon the conditions that exist and the effectiveness of each function. An SLA creates the clarity and accountability to effectively make these decisions.
Creating an SLA can be a challenging process but the rewards of sales and marketing alignment that can be realized by completing the process are too good to pass up. It doesn’t matter if your team or business is large or small. Establishing a sales and marketing SLA is worth the time and effort.