The Power of SLAs: Driving Alignment and Accountability in Your RevOps Strategy | #RevOpsLife

The Power of SLAs: Driving Alignment and Accountability in Your RevOps Strategy

I've seen first-hand the importance of SLAs (Service Level Agreements) in creating successful revenue operations strategies even in the most fractured and siloed teams.

SLAs, particularly between marketing and sales teams, can significantly impact your organization's growth and revenue. In this #RevOpsLife series,I discuss how to build and optimize an SLA that drives alignment, accountability, and results.

A Guide to Marketing and Sales SLAs:

An SLA (Service Level Agreement) is a formal contract between two parties, in this case, your marketing and sales team, that outlines each team's responsibilities, expectations, and key performance indicators (KPIs).

By defining the relationship and clarifying the roles of each team, an SLA helps to ensure that both departments work together effectively and efficiently, ultimately driving revenue growth.

Why SLAs are Essential in a RevOps Strategy:

A well-crafted SLA forms an essential part of a RevOps (Revenue Operations) strategy for several reasons:

1: Alignment:

SLAs align marketing and sales teams by providing a clear understanding of each team's objectives and responsibilities. This alignment ensures that both teams work together to achieve common revenue goals, resulting in a more cohesive and efficient organization.

2: Accountability:

By establishing measurable targets and expectations, SLAs promote accountability for both marketing and sales teams. When each team understands their role in driving revenue and its contribution to the organization's overall success, they become more focused on achieving their individual and shared goals.

3: Communication:

SLAs facilitate better communication between marketing and sales teams by providing a framework for regular reporting and feedback. This ongoing dialogue helps to identify and address any issues or areas for improvement, promoting continuous growth and optimization.

4: Performance Management:

With an SLA in place, marketing and sales teams have a basis for tracking and measuring performance against agreed-upon goals. This performance data enables organizations to make data-driven decisions, optimize processes, and ultimately, drive better results.

5: Scalability:

As your organization grows, so does the need for a structured approach to managing marketing and sales efforts. Implementing an SLA early on can help create a scalable framework that supports growth and ensures consistent performance across the organization.

Key metrics to consider when creating a marketing-to-sales SLA include:

In order to establish a successful marketing-to-sales SLA, it is essential to identify the right metrics that truly reflect the effectiveness of your organization's revenue generation efforts. I recommend you start by retrieving and analyzing your previous 12 months' metrics  on these KPIs

• Lead-to-opportunity conversion rate

• Opportunity-to-close conversion rate

• Average deal size

1: How to Calculate Your SLA:

To establish an effective SLA, you'll need to answer the following questions:

• What is your monthly revenue goal? (If your revenue goal is annual, divide it by 12.)

• How many deals must you close to achieve that goal? (Divide your revenue goal by your average deal size.)

• How many opportunities are needed to close those deals? (Multiply the number of deals by your opportunity-to-close conversion rate.)

• How many qualified leads must be generated to create those opportunities? (Multiply the number of opportunities by your lead-to-opportunity conversion rate.)

Part 1: This accounts for you calculating the first half of your SLA (i.e. your marketing teams responsibility)

Part 2: The second half of your SLA is how quickly sales contact those leads. Remember, you want your sales team to contact marketing leads quickly. But you’ll have to do some experimenting to discover what’s reasonable to require of your sales team.

2: Document Your SLA:

With a better understanding of your required volume of leads sales will need, write a clear and concise statement for your SLA that both parties agree, such as:

3: Optimize Your SLA:

Analyze past data and answer the following questions to fine-tune your SLA:

• Is there a difference in conversion rates between good-fit and poor-fit leads?

• If not, revisit your ideal customer profile.

• Are you receiving a high percentage of poor-fit leads?

• To combat this you can identify their sources and improve messaging in those channels.

• Is there a significant conversion rate difference between hand-raisers and other sales-ready leads?

• Consider counting hand-raisers differently in your SLA and strategize ways to generate more.

The goal here is to establish what is the value of each lead in the sales qualification table

EXAMPLE: If 3% conversion from leads that request a demo and spend $100,000 on your product are hand-raisers vs 1% conversion from leads that request a PDF download (MQL) who also spend $100,000 on your product, demo leads are worth 3x more than the PDF MQL's.

4: Evolve Your SLA to Focus on Lead Value:

By understanding which leads marketing should prioritize, you can incentivize the generation of leads that close at higher rates. Rewrite your SLA into lead value and give marketing a revenue target with a statement such as:

5: Focus on Creating Lead Value $ over Lead Volume (i.e. MQL / PQLs):

Focusing on lead value rather than lead volume is critical in today’s economic landscape, marketing teams can emphasize the quality and revenue potential of the leads they generate and align them to the sales teams' requirements and wider company revenue goals.

A marketing team that targets ‘lead value’ should be incentivized to attract leads that are more likely to convert into customers, ultimately contributing to higher revenue growth. 

This requires a shift in focus and thinking, it also encourages your marketing team to refine their strategies, targeting channels, and messaging to appeal specifically to high-value prospects.

Conclusion:

Committing to implementing a well-crafted and optimized SLA between your marketing and sales teams, offers you numerous benefits that contribute to a thriving RevOps strategy.

By fostering alignment, promoting accountability, enhancing communication, enabling performance management, and supporting scalability, your organization can enjoy sustainable growth and revenue generation.

Emphasizing key takeaways such as focusing on lead value instead of lead volume will help your marketing team attract high-quality leads that convert into customers.

Involving the sales teams in the SLA development process and ensuring their commitment to a feedback loop creates collaboration and helps both teams understand each other's perspectives and requirements, leading to better lead quality and follow-up.

By agreeing on a specific timeframe for follow-ups (e.g. minutes or hours), your sales team can efficiently engage with these high-quality leads, increasing the likelihood of successful conversions.

This ongoing communication and commitment from both marketing and sales teams will create a synergistic environment that drives growth and maximizes the potential of every lead generated.

Ready to create your perfect SLA with the expert guidance of our team:

Join our RevOps GamePlan workshops, where we'll help you align your marketing and sales teams, drive accountability, and optimize your lead generation strategy.

Book a consultation today and start building a solid foundation for your organization's sustainable growth and success. Take the first step toward a more effective and results-driven RevOps strategy now!