Sales and Marketing don’t always agree (and as much as we may want to deny it, they are intrinsically linked). Both think they’re right and they can’t seem to fully understand the other. In the open, they seem to play well together, but behind closed doors it’s often like this…
Sales and Marketing must learn how to work well together as one cannot effectively do their job without the other. But why exactly are these two departments notoriously in conflict? Simple. It’s due to a lack of communication and alignment.
The best way to resolve this issue to to create a Sales & Marketing Service Level Agreement (SLA). Yes, this requires yet another meeting, but I assure you this one can bring a lot of clarity and purpose.
How to create an effective SLA
Define your MQL and SQL
From you business’ perspective there are three main categories your prospects will fall under: Information Qualified Leads (IQL), Marketing Qualified Leads (MQL) and Sales Qualified Leads (SQL).
- Generally speaking an IQL is someone who has visited your site and, for the first time, downloaded a white paper or eBook; someone who is simply poking around your website and gathering information.
- A MQL is someone who has (repeatedly) returned to find and possibly download additional information.
- Finally, a SQL is someone who is ready to be sent to Sales and proactively pursued to close a deal.
There isn’t a whole lot to say about IQLs as there is not much difference between them regardless of your business or industry. It is simply important that you capture their basic data (i.e., name and email) and integrate them into your current CRM and automated workflows. This will help nurture them to becoming a MQL.
MQLs and SQLs vary greatly depending on your business or industry and are an essential part of your Sales and Marketing alignment. Now, I wish there was some magic formula here to help you develop these, but this needs to be decided internally, together. But take time to clearly articulate, plan and agree what your MQLs and SQLs are. This will help Marketing know when the appropriate time to hand a lead off to Sales is and will help Sales know where to continue the conversation with the lead.
As a marketer myself, I know we sometimes prematurely send leads straight through to Sales without considering where the lead is in their buyer’s journey. We need to do our best to minimize this, and defining MQLs and SQLs is a great way to start.
The Marketing side of the SLA
The Marketing side of the SLA is all about realistic calculations:
Sales Goal x (%) Revenue from Marketing-Sourced Leads
= Marketing-Sourced Revenue Goal
Marketing’s Contribution to Revenue Goal ÷ Average Sales Deal Size
= (#) Customers Needed
Customers ÷ Average Lead to Customer Close (%)
= (#) Leads Required
Lets go through a real word example. Lets say your company’s sales goal per month is 10,000€ and Marketing is directly responsible for 70% of those earnings, your Revenue Goal is then 7,000€.
10,000€ x 70% = 7,000€
If the average sale is 1,000€, the number of customers needed per month to continually hit 7,000€ is sales 7 customers.
7,000€ ÷ 1,000€ = 7 customers
If the average lead-to-customer close rate is 10%, Marketing must source at least 70 sales qualified leads per month.
7 customers ÷ 10% = 70 SQLs
If Marketing continues to fall short of these metrics, action should be taken. These types of stipulations should also be included in the SLA. However, don’t think of these as consequences. These actions are to insure both teams are keeping an honest, open dialogue about their successes.
The Sales side of the SLA
The sales side of the SLA is more about the follow-up and less about calculations. However, just like the MQL and SQL, the follow-up should also be quantifiable. Once Marketing has delivered the number of leads needed to help reach revenue goals, Sales must commit to follow-up in the agreed upon way outlined in the SLA. Follow-up varies greatly depending on industry. You may be able to wait a day or two before contacting the SQL or it may need to be within 30 minutes. This will all depend on your sales cycle.
Sales Follow-up within (x) days of SQL delivery
In addition to follow-up, Sales must commit themselves to reporting back to Marketing so they can learn and revise Marketing strategies and to redefine (together with Sales) what a MQL and SQL is for the company. For example, if Sales realizes that a majority of the current SQLs are not actually making purchases, these leads need to remain as MQLs for further nurturing.
Sales report (%) of closed SQLs to Marketing each Month/Quarter/etc.
SLAs are a necessary part of your entire Online and Inbound Marketing strategy.