18 months ago, Weidert Group made the decision to grow. We hired a full-time marketing team. We launched a new website, made new marketing content, and got aggressive about attracting more leads.
A year later, we took an even bigger step: we filled a full-time sales function, became improvement-oriented about our sales process, and set concrete, specific goals for adding new clients.
Both changes were big, positive investments for the company, but they also put us at a crossroads. We had sales in place; we had marketing in place—but did each function benefit the other? Did they each see the value in the other? Were they part of a unitary process? At the start of 2015, we weren't quite there yet.
It was January and we were ready for a new year and new goals, but we needed to build out the process for how marketing and sales could really work together effectively. We needed to instill trust, shared responsibility, and urgency, and we needed to establish clear expectations for hitting our goals. We had a huge opportunity to manage leads more effectively, set proper financial benchmarks, sell with an inbound marketing approach, and improve our closing ratios of inbound leads generated.
6 Months Ago: What's the Right Plan for Sales & Marketing?
It's relatively straightforward to set plans when you oversee a single department. You set long-term and medium-term goals, generate activity plans for meeting those goals, and create processes for getting work done. Admittedly, it's not simple, but at least you're working within the same function area. Marketing knows how to plan for marketing and sales knows how to plan for sales, but it's much harder to plan for aligning two departments to work together.
When we faced the question of how to plan sales and marketing alignment last January, it quickly became clear that what we needed wasn't planning per sé—rather, an agreement on how to plan. We needed an agreement on common expectations, shared business goals, and processes for working together where necessary and effective.
If you've read any of the business literature on internal agreements in corporations, you know that these kind of change-of-habit agreements are typically called service level agreements (SLA). SLAs started as a way to determine agreement between vendors and clients, and eventually, management strategists began using them as a way to help guarantee service between internal departments.
We decided we needed a sales and marketing service level agreement because we needed to articulate the ways in which sales and marketing each have a responsibility to one another in fostering growth. By recognizing responsibility and its attachment to the business as a whole, each department could effectively build plans that actually lead to growth.
In effect, our marketing & sales SLA was a clear and deliberate plan to reach our business development goals collaboratively. It included:
a clearly stated revenue goal
protocols for lead management from marketing to sales
separate but related key performance indicators (KPIs) for sales and marketing
a process for tracking and analyzing progress
(For more information on the components of an SLA, click here.)
How to Operate a Service Level Agreement
Fast forward to a full six months later and we have many lessons learned from the execution of our agreement and the marketing and sales plans that resulted from it.
We not only found that the SLA was effective as a planning tool, it also served as an operational tie between our sales and marketing departments. Because it is inherently an agreement—as opposed to a plan—the SLA changed the tone between departments and helped each side prioritize activities, rather than letting sales or marketing fall back to their own idiosyncratic preferences or modes of operation.
In the following list, I'd like to highlight 3 important lessons of using a service level agreement to foster business growth.
1. An Agreement is Inherently Bound by Time
In other words, you'll have to reset and review the agreement down the road because there's no way to write an agreement that doesn't eventually become obselete.
Once you dig into a service level agreement for sales and marketing, you'll find that in order to begin, you have to start with your financial growth objectives. And, like with any budget planning, you can only forecast your growth so far.
In our service level agreement, we aimed to meet our agency income budget for 2015 (twelve months). Sales and marketing agreed on a specific number of new clients needed and the number of proposals, leads, and traffic we'd need in order to get there. Each level of the agreement was highly specific because as a whole, the agreement was bound by an annual time frame.
After six months, we found that we actually surpassed our revenue goals (in turn, growing our team by 25+% to support the new business generated), and given the change in our organization and structure, we had good reason to reset our SLA for the last six months of 2015.
We also had gained enough data after six months to more accurately set benchmarks that made sense for our organization. After six months of testing and beating our expectations, it was clear that a service level agreement must be an ever-evolving document for setting plans in action. Don't set it and forget it; apply your learnings to continually improve.
2. Effective Reporting is Critical to Making an SLA Operational
If I were to break open the structure of our service level agreement, the central component of the document is an agreement on key performance indicators for sales and marketing and how each side's KPIs relate to one another.
One critical learning piece in the SLA-building process was determining which metrics indicate success and which numbers demonstrate success. For us, goal attainment numbers such as "total number of leads" or "total number of won sales" only had demonstrative value for agreed-upon goals. However, insights like "the rate at which visits generate leads" or "the rate at which sales-ready leads turn into proposals" provide real-time indicative power of our success. By using these so-called "conversion rates" as our key indicators of performance, marketing and sales could more effectively monitor each other and guarantee common responsibility.
Of course, these KPIs were mostly useful because the SLA determined that sales and marketing agreed to report on them regularly. Every month, sales and marketing report together on KPIs and goal attainment at a monthly company meeting.
In doing so, we've learned that some of our KPIs were harder than others to report on. It's critical, for example, to make sure you can track all of your KPIs. We found that having the right tools in place saved time and allowed for easy reporting. We were already using HubSpot for CRM and marketing automation, which made this process much more straightforward.
Make your KPIs and goals easy to report on and you'll be more likely to avoid unnecessary headaches.
3. Sales & Marketing SLAs Inevitably Lead to Other Departments
Everyone in our organization knows our SLA goals and their roles in developing new business. It's been critical to our success in 2015. However, it's important to realize that our 2015 SLA is almost exclusively focused on agreement around new business objectives. True business growth involves more than sales and marketing. Customer service, operations/production, and distribution are all involved in creating successful long-term growth.
Just as the marketing and sales aspects of a service level agreement require continual revision, so does the scope of the agreement. If you want to retain customers and reduce customer churn, you'll need to expand your service level agreement to involve more parties.
At the same time, to bring more people together, we've found that open and transparent reporting is critical to building an environment of trust and responsibility. In addition, there's an aspect of team-building and company culture that's important in service level agreements. At Weidert Group, we celebrate the small wins, the big wins, and the teamwork involved in shared agreement around central goals.
Effective Plans Develop from Holistic Agreement
What's important to remember about building organizational alignment for sales and marketing is that a service level agreement is just that: an agreement. It's not a plan of action for your monthly and weekly activities. However, it makes planning and implementing so much easier because you've already agreed on what's absolutely most important to growth—and you remain held to that agreement.
In business, we all understand competing priorities. On a basic level, the value of setting agreements is that you clarify the most important priorities with others in your organization, rather than letting the slight difference in people's perspectives shape diverging plans for your company.