What is a Service Level Agreement (SLA) and how to implement the agreement in your company’s Marketing and Sales Areas?

With an adequate SLA, the Marketing and Sales areas work together to enhance the company’s results

SLA is the acronym for Service Level Agreement (Service Level Agreement), an agreement made between different areas of the company so that, together, they obtain better results and aligned with the organization’s objectives. The most common type is between the Marketing and Sales teams, but there may be others!

It seems obvious to say that the Marketing and Sales areas need to work together. After all, they are two teams with a common goal: to generate more results for the company. However, it is quite common to find examples where the two strategies walk apart, without a unified planning and without proper monitoring.

When a company manages to create a culture of collaboration between areas, in addition to boosting results, the entire corporate dynamic starts to flow better. With clear responsibilities and well-established metrics, teams can have more autonomy to work freely and innovate in actions.

Putting this into practice requires effort and organization. Therefore, more and more companies are investing in the creation of SLAs, the Service Level Agreements. These are documents that contain the agreements between the areas, clarifying who should be responsible for each stage of the process and how the results will be measured.

In practice, what is SLA?

Service Level Agreement (better known as SLA or, in Portuguese, Service Level Agreement) is an agreement between different areas of the company. The most common type of SLA is made between the Marketing and Sales teams that, as mentioned in the introduction, work together to obtain better results that are more in line with the company’s objectives.

This agreement is like a contract that brings the responsibilities and expectations of each team, especially in relation to the quantity and quality of Leads passed from Marketing to Sales and the steps of the Commercial team in the follow-up of those Leads.

The goals of each area are also in the SLA, and the fulfillment of each step is essential to reach the expected result at the end of each month. Thus, it is possible to prevent the Commercial team from having unrealistic expectations regarding the volume of Leads to work with, as well as the Marketing team from producing Leads with low purchasing potential.

Here at RD, for example, some criteria of our SLA that determine the potential to buy a Lead are the title, the size of the company and the fact of having or not a website.

How to create my SLA?

For this agreement between Marketing and Sales to be consistent and really help generate results, it is important to follow a few steps:

  1. Define the steps in your funnel

In an Inbound Marketing operation, faisal hills will recommend you to work with a funnel definition that includes the following stages of a Lead:

  • Lead: a generated contact;
  • Marketing Qualified Lead (MQL): Lead qualified by Marketing, which meets the requirements to be evaluated by Sales;
  • Sales Accepted Lead (SAL): Lead accepted by Sales and which will be approached by a seller;
  • Opportunity (Opps): Leads that are in contact with sellers, in the negotiation process;
  • Clients: Leads that closed a deal.

These steps include a Lead generation strategy through content actions, social networks, paid media and Email Marketing. If you work with other channels or methods of Lead generation or prospecting, it is necessary to list each step of the relationship with the contacts and what are the criteria for them to move forward.

Having made this definition, the next step is to decide who will be responsible for each step. In our example above, the Marketing team is responsible for generating Leads and converting them into MQLs. From there, the Commercial team assumes the SALs and Opportunities and must work to convert them into customers.

This needs to be clear in the SLA, as well as the tools and methodologies that will be used by teams throughout the process.

  1. Calculate goals for each step of the funnel

To continue creating your SLA, we need to look at the numbers. In order for teams to plan assertive strategies, it is very important to set goals for each stage, and not just a sales or billing goal.

One suggestion is to do the process backwards. Start with the sales target for the year, for example. Divide this goal into quarters and then into months. Keep this number, let’s get back to it.

If you already have a structured transaction, look up your sales conversion rate history. In the last year, how many leads did you generate? How many were really qualified? How many Opportunities have you negotiated with your company? How many became customers? With these answers, you will have your conversion rates and be able to project growth on them.

Calculation example

Now, just start with the number of sales you want to close each month and calculate how many Leads you need to generate to reach that goal. See the example:

Last month, a company’s funnel looked like this:

  • 500 Leads
  • 150 MQLs (30% conversion)
  • 73 SALs (48% conversion)
  • 50 Opps (68% conversion)
  • 10 Sales (20% conversion)

For this month, the owner wants to close 35 sales, keeping the same Marketing actions and without changes in the Sales team. Therefore, based on the history, the goals for the month would be:

  • 1,783 Leads
  • 535 MQLs (30% conversion)
  • 257 SALs (48% conversion)
  • 175 Opps (68% conversion)
  • 35 Sales (20% conversion)

This calculation shows that, to reach 35 sales, it would be necessary to increase the volume of generated Leads by more than 3 times. Without any change in marketing strategy, this is practically impossible. That’s what the SLA is also for: contextualize and show the feasibility of each goal or what it demands to become a reality.

In the case of our example, possible solutions are:

  • Search for new ways to attract Leads to gain volume;
  • Improve the quality of Leads, to increase the number of Opportunities;
  • Make changes to the business process to improve sales performance.

It is difficult to estimate a number that is good for Marketing and Sales, but there are ways to balance the needs of each area and reach a positive consensus for the business. The definition of the SLA should spark this kind of debate!

  1. Define how the Leads will be transferred to the Sales team

Once the goals for each step are defined, it is necessary to establish how the Leads from the Marketing to Sales team will be transferred. Speed ​​and efficiency in this process are essential to guarantee good closing chances and avoid losing good business opportunities.

We’ve already written in detail about how to transition from Marketing Leads to Sales, but here are some tips:

  • Integrate Marketing and Sales tools. If you use a software to manage Leads, it must be connected to your CRM. This way, in addition to automatically sending Leads to the Commercial team, you also don’t lose the information history;
  • Have defined criteria for barring Leads at each step of the funnel. This is what we call a “blacklist” in the SLA. Describe all Lead profiles that should not be forwarded to the Salesperson and avoid wasting sellers’ time;
  • From time to time, check the reasons for lost sales and check if the Commercial reports many Leads outside the ideal profile. This can happen if one of the areas is not following the SLA correctly;
  • Define a routine for reviewing the Leads passing criteria. The SLA must be a document that is constantly updated, to contemplate changes in the market and in the business itself.
  1. Define which information from the Lead should reach the Commercial

Some information can save time and increase the efficiency of the Sales team. Therefore, it is interesting that teams define what information should be passed along with the Lead.

Important information is:

  • Contact details;
  • Brief history with your company;
  • Summary of interactions with emails, materials, website and blog, showing the Lead’s areas of interest and need.

This data prevents the seller from having to ask questions that the Lead has already answered in other opportunities, improving the experience of the commercial approach, as well as providing inputs to create more attractive and suitable proposals.

  1. Define how the Sales approach will be

After defining the Marketing responsibilities, it is necessary to define the responsibilities of the Sales team. After all, it is essential that the business process continues with the expectations generated at the beginning of the relationship with the Lead.

It is important to outline what will be the actions of the Sales team from the moment they receive the qualified Lead. This includes how the contact should be made initially (phone or email), number of attempts per day, when the seller should give up on that Lead, etc.

  1. What happens to the Lead after the sale?

After negotiating with the Lead, he may or may not become a client. This next step of the SLA should tell the Lead’s path if he doesn’t become a customer.

If that Lead still has potential, but it’s not a good time to buy, the Marketing team can direct it to a specific nutrition stream and wait for it to reach an Opportunity state again.

Those who don’t really have the profile to become a client can receive other materials and educate themselves even more on the subject. If the Lead changes companies or starts investing more, it can resume trading, for example.

Finalizing the SLA

These SLA definitions are critical for teams to work together in a healthy and productive way. Finally, it is important that the areas have regular meetings to monitor the work, discuss difficulties and review the agreement.

The meetings mainly help to validate what was defined and understand what can be improved in the processes. At this point, it is good to remember that all stages must have their respective metrics and monitoring so that the data can be analyzed and reflect reality.

To help you start your SLA between Marketing and Sales, we’ve created a complete, editable template! In it, you can include the steps and goals of your funnel, those responsible for each one of them and even the tools used by each area to monitor the results.