The Ultimate Guide to Service-Level Agreements (SLAs)

The Ultimate Guide to Service-Level Agreements (SLAs)

One of the most critical steps to aligning your sales and marketing efforts is creating a service level agreement (SLA). However, when one exists between sales and marketing departments, this agreement instead details marketing goals, like number of leads or revenue pipeline; and the sales activities that'll follow and support them, like engaging leads that were qualified by the marketing team. Is this an internal SLA between your sales and marketing departments? Both teams should have their goals outlined in this section of the contract, while making sure that when Marketing hits its goal, Sales can reach its own goal as a result. Here's an example of a multi-level SLA in an internal situation: It's a no-brainer for Company X's sales and marketing teams to partner up on an internal SLA that delivers leads from Marketing to Sales every month. In a multilevel SLA, Company X can have sales director, Amy, send monthly "customer friction" reports to Joan, the VP of service, based on dialogue the sales team has regularly with its clients. How to Make an SLA for Marketing and Sales Alignment To draft your SLA, you first need to align your Sales and Marketing teams around a shared set of goals -- or, as we put it before, the harmonious "Smarketing." Just make sure the same measure of time is used for both Sales and Marketing to maintain alignment. Take the averages of lengths of time it took for Sales to follow up with all leads within a particular timeframe -- day, week, month -- and chart it against the SLA goal. This step helps to maintain accountability and transparency and allows for both teams to address issues -- or congratulate each other on productive results.

How to Use Snapchat: A Detailed Look Into HubSpot’s Snapchat Strategy
Why are marketing automation platforms getting so much VC funding?
13 Gmail Plugins That Make Client Communication Easier
service-level-agreement-sla

At many companies, it can feel as if there are 100 miles between sales and marketing.

According to the 2018 State of Inbound report, fewer than half of marketers would describe their respective companies’ sales and marketing teams as “generally aligned.” That’s a problem.

In HubSpot’s early days, our marketing and sales executives started out on the same team, and luckily that collaboration has trickled down throughout the organization as it continues to grow. But it wasn’t just luck, of course.

That alignment — which we call “Smarketing” — is largely the result of a conscious decision to work together, set goals, and create agreements between both teams.

One of the most critical steps to aligning your sales and marketing efforts is creating a service level agreement (SLA). Traditionally, an SLA serves to define exactly what a customer will receive from a service provider. But SLAs serve internal operations as well, and sales and marketing agreements are among the most crucial.

Service-Level Agreement (SLA)

A service-level agreement (SLA) is a contract that establishes a set of deliverables that one party has agreed to provide another. This agreement can exist between a business and its customers, or one department that delivers a recurring service to another department within that business.

SLAs are common to a business when signing on new customers. However, when one exists between sales and marketing departments, this agreement instead details marketing goals, like number of leads or revenue pipeline; and the sales activities that’ll follow and support them, like engaging leads that were qualified by the marketing team.

Both the sales and marketing departments use this document as a commitment to support each other, based on concrete, numerical goals. And guess what? 65% of marketers whose companies have this type of SLA see higher return on investment from their inbound marketing efforts.

state-of-inbound-marketing-SLA

What an SLA Includes

The details of an SLA will differ among internal and external agreements. Nonetheless, there are common building blocks that each SLA should be sure to include, whether the recipient of the service is your customer or your sales team.

1. Summary of Agreement

The first item on your SLA should be an overview of the agreement. What service have you agreed to deliver to the other party? Summarize the service, to whom it’s being delivered, and how the success of that service is to be measured.

2. Goals of Both Parties

In external SLAs — those between a business and its customers — the goals stated in the agreement are primarily those of the customer. If this is your intention, work with your client to marry their needs with the abilities of your product, and come up with a measurable goal that your company can feasibly meet for the client on a regular basis.

Is this an internal SLA between your sales and marketing departments? Both teams should have their goals outlined in this section of the contract, while making sure that when Marketing hits its goal, Sales can reach its own goal as a result.

3. What’s Needed by Both Parties

SLAs should include what each party needs in order to reach their goals. In agreements that serve a customer, keep in mind their needs might go beyond simply “the product.” They might need more than that to reach their goals — such as weekly consulting, reporting, and technical maintenance from you.

SLAs between sales and marketing teams should describe what they might need from the opposite department in order to help them hit their targets. Marketing, for example, might need weekly status reports on Sales’ pipeline so the marketers can adjust their lead-generating campaigns accordingly.

4. Points of Contact

Who’s in charge of making sure each party’s goals are met? Sort out which team does what, and who talks to whom, in this section of your SLA. Is there a separate employee using the services, in relation to the employee who reports on performance every week? Make it clear who’s involved in the SLA, and how.

5. If Goals Are Not Met

You might not want to think about it, but there should always be formal consequences when a goal isn’t met as part of an SLA. Don’t freak out, though — these consequences aren’t always business-ending situations. Include a form of compensation to the service’s end user for when the service doesn’t meet their agreed-upon goals. In external SLAs, according to PandaDoc, this compensation can come in the form of “service credits.” Grab PandaDoc’s free SLA template here to find out more.

For Sales and Marketing SLAs, work with your sales team to establish a plan for how any lost revenue is to be made up as a result of an unreached sales quota. You might settle on a strike system that holds certain employees — in both Sales and Marketing — accountable for diagnosing and resolving issues of low performance.

6. Conditions of Cancellation

Under what circumstances will your SLA be terminated? Whether your contract serves a customer or two internal departments, you’ll typically find yourself putting the SLA on the chopping block when it’s just not working. Maybe your goals have gone unmet for the last three months, or the current agreement simply doesn’t have buy-in from everyone involved.

Come up with formal conditions under which you’d cancel the current SLA in pursuit of, hopefully, a better SLA.

Service-Level Agreement Examples

  1. Customer Service-Level Agreement
  2. Internal Service-Level Agreement
  3. Multilevel Service-Level Agreement

1. Customer Service-Level Agreement

A customer SLA is precisely what it sounds like: an agreement by a vendor to deliver a certain level of service to a particular customer. Here’s a fun example:

In the TV show The Office, the company, Dunder Mifflin, supplies paper to various organizations. They might have a customer SLA stipulating that Dunder Mifflin will supply [Company X] with 50 reams of paper per month, shipped every Monday to [Address 1] and [Address 2] by Darryl Philbin — with a confirmation of delivery sent to Jim Halpert. (Sorry, we had a little too much fun with the references in that one.)

2. Internal Service-Level Agreement

As explained earlier in this blog post, an internal SLA only concerns parties from within the company, rather than its customers. So, while a business might have an SLA open with each of its clients, it can also have a separate SLA between its sales and marketing departments.

For example, let’s say Company X’s sales department has to close $5,000 worth of sales per month in total, and each sale is worth $100. If the sales team’s average win rate for the leads they engage with is 50%, Company X’s marketing director, Josh, can work with the sales team on an SLA, stipulating that Marketing will deliver 100 qualified leads to sales director, Amy, by a certain date every month. This might include four weekly status reports per month, sent back to Josh by Amy, to ensure the leads Amy’s team is receiving are helping them keep pace with their monthly sales…

COMMENTS

WORDPRESS: 0
DISQUS: 0