How to Create an Effective Sales and Marketing SLA

Editor's note: This post originally appeared on HubSpot's Marketing Blog. For more content like this, subscribe to Marketing.

The alignment of an organization’s sales and marketing efforts is a crucial strategic imperative for companies that desire sustainable growth. Despite the evidence of improved business performance, it’s still a rarity to find an organization that has and maintains full alignment. The good news is that the issue is getting far more attention than ever before, and more organizations are making progress.

A major cause for the overall lack of progress is that while the issue of alignment is getting more strategic attention from executives, it’s still getting very little focus in terms of tactical and structural changes that need to be made within an organization to sustain the goal.

While talk and will power can improve results in the short run, structural change is required to sustain the effort and to gain the benefits of such a pursuit. It is for this reason that the development of a documented service level agreement (SLA) between sales and marketing is so important.

HubSpot’s 2015 State of Inbound Marketing report highlighted three compelling advantages for companies that maintain their SLA:

• Companies with an active SLA are 34% more likely to experience greater year-over-year ROI than those companies that aren’t.
• They’re 21% more likely to get greater budget allocations.
• They’re 31% more likely to be hiring additional salespeople to meet demand.

Why SLAs Are So Important

Having been involved in creating many SLAs (for both my company and with clients) I can attest to the fact that while creating them can be difficult (they require a lot of thinking and working through details), the impact is significant. It is said that great communication is communicating not so that you can be understood, but so that you cannot be misunderstood. SLAs make that possible.

It is also said that Wwhat gets measured gets done, and what gets measured and monitored gets done faster. An SLA formalizes the measurement and monitoring processes that ensure progress and results.

Creating An Effective Sales & Marketing SLA

The process starts by bringing together the leaders of all disciplines into the same room to discuss roles, responsibilities, process, targets and accountability. At a minimum, a marketing and a sales leader need to be involved. As the sales development role continues to mature and grow, the leader of that group should be involved as well.

1) Defining Your Buyer Personas/Ideal Client Profile

As with everything else in your demand generation process, your service level agreement starts by clearly defining and communicating the criteria for who you are trying to attract. The more specific and clear the definition is, the better.

When you shortcut this step (and many organizations do) you leave far too much open to the interpretation of individuals. Let’s face it, salespeople and marketers are naturally opportunistic. Without formalizing, your profile definitions will drift and your demand generation process will get bogged down.

2) Standardize Lead Definitions

I regularly assess sales development and sales processes. One of the first questions I ask is to define what a lead is, and, further, to define each stage of an organization’s funnel. The answers almost always start with, “Well, uhm, well that’s a, uhm, good question. You see it kind of depends…”

At a minimum you must clearly define what qualified, marketing qualified and sales qualified leads are. This will force the participants to get into the minutia, but it’s critical to make your process scalable and sustainable.

3) Set Clear Goals

When setting goals, you should consider the maturity/ramp up of your team members and functional areas, past results and lead generation drivers. This is not the time to pull numbers out of the air and to make them motivating. Your goals must be based on real life situations.

The marketing team (and, if you have one, the sales development team) should be assigned goals around how many leads should be sourced, targets for each phase of the funnel and how many sales qualified leads (SQLs) should be turned over to the sales team.

All teams that are party to the SLA should meet every month to review results and update goals.

4) Define How The Handoff Occurs

Increasing lead velocity is truly a team effort. The handoff is a place where otherwise excellent demand generation processes blow up. You must determine if and how your SDRs will specialize, what determines when a lead is moved to that team and how leads are then handed off to the new sales team.

This is why you must have clear lead definitions. Without them your team will be dealing with too much ambiguity to sustain alignment and growth.

5) Establish Protocols For Managing Leads

The biggest, most common complaint I hear from salespeople and marketers is that the other group doesn’t know how to manage leads. This is the section of the SLA that eliminates that concern.

Clearly lay out how a lead should be treated – when, how often and how many times they should be “touched.” Closing the loop is also important. How should a sales accepted lead be reported as well as a sales rejected lead. Closed loop reporting is crucial to improving your processes.

6) Track, Measure & Assess Performance Metrics

Your SLA should clearly define the key performance indicators everybody will use to assess the progress and effectiveness of your demand generation processes. Tracking should be used to highlight performance issues/opportunities with individual contributors and to highlight and accelerate learning so that everyone is always improving.

7) Standardize the SLA Review Process

Determine the period of time that you will conduct a comprehensive review of the assumptions, processes and targets laid out in your SLA. For most companies a review of the SLA every six months is sufficient. For high-growth companies, we recommend reviewing quarterly.

Creating an SLA is a challenging task but one that is well worth the effort.  Clearly defining and communicating the expectations of your sales and marketing teams will go a long way in helping to meet or exceed the revenue goals you have established.