Where it concerns defining the role of a company’s services, there are few tools more useful than a service-level agreement. Simply put, SLAs are agreements stating what two parties want to achieve.
We’re all familiar with SLAs in the B2C world. If I want to sign up and buy a membership with Pandora or Netflix, those companies are going to provide me with an agreement stating what I’m getting for what price. As a customer, this puts me at ease because I know exactly what service they provide and how much I’m giving up for it.
SLAs are invaluable in the B2C world, so you’d think the same would go for B2B as well. Interestingly, though, the concept of the service level agreement is often overlooked or ignored in the B2B world. Many operations don’t have an SLA in place, and the detriment of that is reflected in the statistics: according to HubSpot and State of Inbound, a paltry 22% of B2B companies have a formal service-level agreement in place. And of those companies who have not invested in SLAs, only 56% of them feel their marketing efforts are successful (as opposed to 82% of those who do).
The reasons SLAs work is pretty straightforward: they can focus a company’s goals. Moreover, they’re highly effective at aligning the efforts of sales and marketing departments—this is where B2B operations need to take notice.
Below we’ll take a look at why that is and, in the process, reveal how you can create an SLA that runs like a dream.
Know Your Level
There are about three major types of service level agreements out there. These include customer and service-based SLAs, but for the purposes of this article, we’re going to focus on the one that applies to B2B most directly: multi-level SLAs. B2B companies typically implement a multi-level SLA to help manage customer needs while aligning the sales and marketing departments.
That’s because an SLA of this nature is going to help resolve common issues that arise between the sales and marketing departments of different operations. A solid SLA will help both departments commit to specific sales and marketing goals, be transparent about their performance, communicate often and openly with team members, and publicly share progress as they reach benchmarks.
The tricky thing is that there’s no one-size-fits-all SLA for B2B operations. The right service level agreement for you will depend on the size of your company, its internal departments, its growth goals, etc. Before you can draft that SLA, you need to acknowledge these concerns while also making sure everyone in sales and marketing are on the exact same page regarding your needs. You’ll find the first and most important step to achieving this below.
Align Departments in Your Organization
An ideal service level agreement is going to be clear and straightforward to both your sales and marketing departments. Proper sales and marketing alignment begins with this service level agreement. It will bring the two departments together and ensure that they’re working towards the common goal of finding more business.
So, how do you actually bring these two departments together?
First, write an executive summary that answers the what, why, and how. What are your goals? Why are they your goals? How are you going to achieve those goals? This summary should be clear to everyone, from those on the sales floor to the CEO and board of directors.
Next, facilitate cooperation between the sales and marketing departments. Hold regular meetings between these departments conducted not by C-level officers but by management that spend their days working alongside the employees. Make sure each department is clear on what exactly they’re contributing to the goal.
Above all else, ensure each department knows about the other’s processes and metrics. Make sure they are on the same page regarding even the simplest of definitions, like what a prospect is. Or what a lead is. More on this below.
Properly Define Terms and Metrics
In order to create an SLA that works, you are going to have to define everything to ensure there’s no confusion about any terminology. Be sure to comprehensively answer any and all questions, which include:
- Defining units of measurement for leads, whether they’re SQLs (sales-qualified leads) or MQLs (marketing-qualified leads)
- Defining the criteria for both SQLs and MQLs
- Precisely defining leads that both sales and marketing deem qualified
- Clarifying what information sales will use to follow up on leads, as well as sales’s expectations for those follow-ups
- Which specific metrics marketing will be using
A good SLA is also going to standardize the sales process and make each employee within that department understand his or her role. You can look at certain other metrics, too, including:
- Total sales goals by revenue quota
- Average deal size (in the sales department)
- Average lead to customer close percentage
- Percentage of revenue from marketing-generated leads
There’s a subtle art to selecting the correct measurement metrics. Do it right and the boost in productivity and efficiency will help raise employee morale as you reach your goals.
Determine Revenue Targets
Now that everyone is on the same page, it’s time to look towards the future and start setting goals. A simple way to start is by agreeing on a firm revenue target. Ask yourself questions, like what are your yearly revenue goals and how will you achieve them on a monthly basis? What’s the marketing team’s contribution to these goals?
For example, if you set a revenue target of $150,000, and marketing contributes 60% of that, then you have a marketing-influenced (MI) revenue target of $90,000. Now, if you’ve properly established your MQLs, as outlined above, then you can apply a nice, little calculation to measure efficacy. Simply divide your MI revenue target by the worth of each marketing-qualified lead. That will tell you exactly how many MQLs marketing needs to produce. With this info in hand, you can start building effective marketing strategies.
This is what’s possible when everything is defined and outlined in a service-level agreement. Just as importantly, it will facilitate communication between these departments to ensure everyone remains on the same page as you hit your target goals.
By adhering to these fundamentals, you should be able to draft a service-level agreement that properly aligns your sales and marketing departments. Most importantly, though, be sure to set realistic goals. No matter how efficiently your sales and marketing teams are working together and how well they’re communicating, both departments can and will crumble under the weight of unrealistic expectations.