At many companies, it can feel as if there are 100 miles between sales and marketing. In a recent LinkedIn survey, 60% of global respondents believed that misalignment between sales and marketing could damage financial performance, yet there are a number of disconnects between the teams from strategy to process.
One of the most critical steps for 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.
Ultimately, a service level agreement is designed to create alignment between two parties by setting clear expectations and mitigating any issues before they happen. With that in mind, there are multiple types of SLA depending on your use case.
What are the 3 types of SLA?
- Customer service level Agreement
- Internal service level Agreement
- Multilevel service level Agreement
1. Customer Service Level Agreement
A customer SLA is just 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
An internal SLA only concerns parties from within the company. 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.
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, Amir, can work with the sales team on an SLA, stipulating that Marketing will deliver 100 qualified leads to sales director, Kendra, by a certain date every month. This might include four weekly status reports per month, sent back to Amir by Kendra, to ensure the leads Kendra’s team is receiving are helping them keep pace with their monthly sales goal.
3. Multilevel Service Level Agreement
Multilevel SLAs can support a business’s customers or the business’s various internal departments. The point of this type of SLA is to outline what is expected of each party if there’s more than just one service provider and one end user. Here’s an example of a multi-level SLA in an internal situation:
Company X’s sales and marketing teams partner up on an internal SLA that delivers leads from Marketing to Sales every month. But what if they wanted to incorporate a customer retention strategy into this contract, making it an SLA between Sales, Marketing, and Customer Service?
After sales closes 50 new deals for the month, it’s Customer Service’s job to keep these customers happy and successful while using the product. In a multi level SLA, Company X can have sales director, Kendra, send monthly “customer friction” reports to Joan, the VP of service, based on dialogue the sales team has regularly with its clients. This helps the customer service team build a knowledge base that better prepares them for the pain points customers call them about.
You can learn more about customer service’s increasing role to business growth in the HubSpot Academy.
What does an SLA include?
The details of an SLA will differ among internal and external agreements. Nonetheless, there are common building blocks that each SLA should include, whether the recipient of the service is your customer or your sales team.
Featured Resource: Free Marketing & Sales SLA Template
1. A Summary of the 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 will be measured.
2. The 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. The Requirements of 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. The 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. A Plan if Goals Aren’t Met
You might not want to think about it, but there should 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. The 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.
Examples of SLAs
While an SLA will be unique to your needs, here are some examples and templates that can give you an idea of what an SLA may look like.
As previously mentioned, HubSpot has a template for marketing and sales service level agreements. Instead of being overly complicated, the template provides straightforward, no-nonsense sections so that any party can skim at a glance.
What we like best: It’s laid out in a two-column style to easily denote which team is responsible for which activities and metrics. Having them side-by-side like this further underscores the goals of partnership and alignment.
How to Implement This in Your SLA
Simplicity is the key to recreating this SLA template. Whether you use HubSpot’s offering or create your own, effectively implementing this type of SLA means resisting the temptation to list out every possible outcome and instead focus on the big picture of goals, initiatives, and accountability.
This sales and marketing SLA template focuses heavily on metrics, making it a great choice for high-performance teams. The design relies on tables for easy information input and even comes with prompts/examples to help you define the agreement.
What we like best: The document is organized step-by-step, making it a great choice for teams without a formalized SLA process (yet).
How to Implement This in Your SLA
Implementing the Hivehouse model for your SLA means leaning into its step-by-step strengths. By breaking down SLAs into smaller and more manageable steps, there’s less chance of you and your team getting overwhelmed.
Instead of going through the process of creating an SLA, this template organizes sections by the marketing and sales process itself, from goals to lead qualification, handoff, and nurturing.
What we like best: The template takes a visual approach with columns for marketing, sales, and shared goals. This makes ownership of deliverables crystal clear throughout the process.
How to Implement This in Your SLA
Seeing is believing in this type of SLA template. While the nitty-gritty details are there, this approach uses color and shape to highlight important categories and actions. If you’re planning to take this approach to your SLA, use color psychology and graphic design principles to create a visually appealing SLA.
4. AT&T’s Small Business Service Agreement Example
Here’s a real-world example in the wild. Not all SLAs are between marketing and sales teams or even other internal departments. Here’s an SLA that lays out a service agreement between AT&T and its customers, setting expectations for the engagement. They make this SLA publicly accessible for all their users.
What we like best: The agreement is plain and simple, leveraging bullet points to make each detail clear and understandable.
How to Implement This in Your SLA
AT&T’s real-world example highlights the importance of calling out what matters — in this case, by using bullet points. Applying the same approach to your SLA means distilling larger and more complicated outcomes into easily-understood snippets that don’t leave room for confusion.
5. Microsoft Azure SLA Example for Cloud Services
As a service provider, Microsoft Azure also makes its SLA for customers public. The SLA uses bullet points to clearly identify its offerings and customer promises, which are unique depending on the plan and services rendered.
What we like best: The SLA is organized with headings for quick navigation to the offerings that are most pertinent, and information is kept concise with an optional “View full details” link.
How to Implement This in Your SLA
In-depth SLAs are naturally complicated, making it easy to get bogged down in the details despite best efforts to keep things simple. Microsoft’s example offers a streamlined approach to implementation: Call out the key details and then provide links to the full SLA text.
PandaDoc provides another option for provider/client agreements and is a great choice for more formal arrangements.
What we like best: This template makes for a clear and concise SLA with times, dates, and solid expectations.
How to Implement This in Your SLA
While this type of SLA leans more toward legalese with language like “whereas” and “therefore”, it has the advantage of a solid narrative structure to describe expectations. If you’re planning to implement something similar, consider using a template to speed up the process rather than starting from scratch.
How to Make an SLA for Marketing and Sales Alignment
While SLAs are common between businesses and new customers, they can also improve internal alignment. When one exists between sales and marketing departments in particular, this agreement 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? 87% of sales and marketing leaders say collaboration between sales and marketing enables critical business growth.
Now, if you don’t have a Sales and Marketing SLA in place, fear not: We’ve outlined how to create one below so that you can easily start aligning your sales and marketing teams.
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.” This alignment can then dictate the creation of a written SLA that reflects these goals. Here’s how to create an SLA with “Smarketing” in mind:
1. Calculate a numerical marketing goal based on the sales team’s quotas.
As a marketing department, not only should you have a concrete goal for each campaign you run, but you also should have a high-level numerical goal that aligns with the sales team’s operations. At the end of the day, that’ll mean qualified leads and actual sales from those leads.
Salespeople are driven almost entirely by their sales quotas — the numerical goals that correlate with their compensation and job security. If Marketing commits to a similar, related numerical goal, it shows that the team is being held accountable in a manner similar to Sales. The trick, however, is to make sure your numerical goal can effectively power the sales team’s numerical goal.
In order to calculate the marketing side of your SLA, you’ll need the following four metrics:
- Total sales goal (in terms of revenue quota)
- % revenue that comes from marketing-generated leads (as opposed to sales-generated ones)
- Average sales deal size
- Average lead-to-customer close %
Then, it’s time to do some calculations:
- Sales quota x % revenue from marketing-generated leads = Marketing-sourced revenue goal
- Marketing-sourced revenue goal ÷ Average sales deal size = # of customers needed
- Customers ÷ Average lead-to-customer close % = # of leads needed
2. Segment your goals by specific intervals during the year.
It might also be a good idea to reevaluate the marketing side of the SLA each month, as a variety of factors can change the numbers used in your calculations over time. To do so, create a document that tracks your SLA calculations by month, which should include the following metrics:
- # of marketing-generated leads
- # of those leads that became customers
- Revenue from those closed customers
- Total revenue closed that month from marketing-generated leads only
- Total revenue closed that month
You will also need:
- The average sales cycle length
With the figures above, you can re-calculate the metrics you started with on a monthly basis, or at whichever interval suits your business — quarter, year, etc. Just make sure the same measure of time is used for both Sales and Marketing to maintain alignment. Have a look:
- # marketing-generated leads that became customers ÷ # marketing-generated leads = lead-to-customer close %
- Revenue from closed customers ÷ # of marketing-generated leads that became customers = sales deal size
- Total revenue closed from marketing-generated leads / total revenue closed = % revenue from marketing-generated leads
You could also take it one step further, and incorporate quantity and quality into these metrics. The above calculations provide you with a quantitative volume goal of marketing-generated leads. However, we know that not all leads are created equal, and as a result, some may be considered higher- or lower-quality than others.
For example, a decision-making executive might be a more valuable contact than an intern. If that’s the case, you can do the above analysis for each subset of leads, and set up separate goals for each type/quality level.
Want to take it even further? Measure in terms of value, instead of volume. For example, a CEO may be worth $100, for instance, while a director is $50, a manager is $40, and so on.
3. Calculate sales’ figures and their goals.
The sales side of the SLA should detail the speed and depth to which a salesperson should follow up with marketing-generated leads. When establishing this end of the SLA, consider these two sales statistics:
- Salespeople who follow up with leads within an hour are nearly seven times more likely to have meaningful conversations with a decision maker on the other end.
- However, only 7% of leads respond to a follow-up contact within five minutes after filling out a form.
Bottom line? Not all leads may be fit to send to sales immediately. They often need to meet some minimum level of quality, like reaching a certain activity level, which can only take place after being nurtured by Marketing.
Nonetheless, engaging a lead the short time after he/she converts is critical to maintaining a relationship with them — the question you have to answer is what that engagement should look like. Either sales or marketing should take action to start building that relationship, make nurturing easier, and set up the sales rep for success when she eventually does reach out.
Keep in mind this advice is futile if you don’t consider the bandwidth of your sales reps. Sure, in a perfect world, they’d make six follow-up attempts for each lead — in reality, though, they may simply not have enough hours in the day to do that. For that reason, you’ll also need to factor in the number of leads each rep is getting (based on the marketing SLA), how much time they spend on marketing-generated leads versus sales-generated leads, and how much time they have to spend on each one. If you’re looking to conserve time, some of the follow-up — email, in particular — could be automated, so look into options there.
4. Set up marketing SLA reporting.
Now that you have your SLA goals, it’s time to track your progress against that goal — daily.
To start, graph the goal line using this formula:
(1÷n x g)
Where n is the number of days in the month and g is your monthly goal.
That should determine what portion of your monthly goal you need to achieve each day. You’ll want to graph that cumulatively throughout the month and mark your cumulative actual results on the same chart. We call that a waterfall graph, and it looks something like this:
5. Set up sales SLA reporting.
For the sales SLA reporting, you’ll have two graphs — one monitoring the speed of follow-up, and the other monitoring the depth of follow-up.
To graph the speed of follow up, you’ll need the date/time the lead was presented to sales, and the date/time the lead received her first follow-up. The difference between those two times equals the time it took for sales to follow up with that particular lead.
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.
To graph the depth of follow-up — e.g., the number of attempts — look specifically at leads that have not been connected with, since the goal of the follow-up is to get a connection. For leads over a certain timeframe that have not received outreach, look at the average number of follow-up attempts made, and graph that against the SLA goal.
6. Communicate, celebrate, and address the achievement (or lack thereof).
Maintaining strong communication regarding how each team is performing on goals boosts transparency. If either team isn’t reaching their goals, addressing that confirms their importance, while celebrating hitting those goals can aid motivation.
If you’re not sure where to begin when it comes to setting these goals, check out our free Marketing & Sales Lead Goal Calculator, designed to help you determine and track the goals that will eventually become part of your SLA.
SLA Best Practices
- Define realistic goals
- Ensure everyone is on board
- Get specific
- Pinpoint key metrics
- Account for the unexpected
- Double-check the details
- Review and revise as needed
To ensure you’re getting the most from SLA creation, implementation and management, it’s worth aligning your efforts with industry best practices. Some of the most common include:
Define Realistic Goals
While promising the moon might seem like a good idea, things can quickly go off track when SLA outcomes aren’t met. As a result, it’s worth starting SLA creation with a brainstorming session that includes relevant stakeholders. Here, the goal is to define what you want to do, what you can do, and what you can reasonably offer.
Ensure Everyone is On Board
Next, make sure all relevant parties feel like their needs are being met with your draft SLA. Better to find out up-front that there are potential problems — and make proactive changes — than face pressure to scrap in-place service level agreements and start over.
Specificity is what makes SLAs work. For example, if you’re an IT service company drafting an SLA about uptime, the number of “nines” — 99.999 percent, 99.9999 percent, etc. — defines exactly how much uptime you’re agreeing to provide. Using specific terminology reduces the risk of conflict around SLA expectations by removing ambiguity.
Pinpoint Key Metrics
While specific SLAs are a solid starting point, you also need ways to effectively measure the success of your agreement. In the uptime example above, minutes of downtime per year are often used to determine if goals are being met. When it comes to marketing or sales, meanwhile, metrics could include leads generated, deals closed, or any other measurement that makes sense under your SLA structure.
Account for the Unexpected
Unexpected events — such as severe weather, staffing challenges, or sudden IT failures — can make SLA goals challenging to reach. As a result, it’s worth creating clauses that account for unexpected events. While there’s no way to predict exactly what will happen, and obligations remain to meet at least minimum standards, building in some breathing room for the unexpected is well worth the effort.
Double-Check the Details
Even small details matter. Consider the example above: While 99.999 percent uptime works out to just over 5 minutes of downtime per year, 99.9999 percent is 31 seconds. Here, a misplaced 9 could put your company on the hook for providing service levels that are almost impossible to reach. As a result, it’s worth getting your SLA double-checked by a fresh pair of eyes before moving forward.
Review and Revise as Needed
Service level agreements aren’t static documents. While they cover a set period and describe a specific set of actions, both provider and partner needs can change during that time. As a result, it’s worth building in the option for review part way through the SLA agreement period and conducting a full review when the contract is up to determine if changes are required.
One Last Step When It Comes to SLAs
When it comes to what should be in your service level agreement, there’s one final piece: Review these metrics on a regular basis to monitor your progress, and make sure both Sales and Marketing have access to the reports for both sides of the SLA.
This step helps to maintain accountability and transparency and allows for both teams to address issues — or congratulate each other on productive results.
Editor’s Note: The post was originally published in January 2019, but was updated in December 2019 for comprehensiveness.
5 Project Management Essentials That You Need to Know
Project management essentials represent step-by-step instructions on how to complete projects successfully, on time, and on budget. Poor project management will cost you more than just money. When deadlines and budgets are missed, it harms your reputation, self-assurance, and client trust irreparably.
Here we discuss the top 5 project management essentials for a successful project, how to implement them, and how they can benefit you and your whole team. Let’s dive in!
What Is Project Management?
Project management is the use of procedures, methods, techniques, abilities, knowledge, and experience to accomplish particular project goals in accordance with predetermined guidelines. Such management is determined in terms of budget and time.
When done correctly, project management makes every aspect of the business work more efficiently. Your team can concentrate on the important work without being distracted by unmanageable budgets or projects that grow out of hand.
Why do Companies Need a Project Manager?
If there are delivery delays, companies risk losing customers, which can harm the whole company. Project managers can help companies achieve their goals efficiently and on time by designing the project plan. As a result, the teams working on the project have a clear vision that is aligned with the company’s objectives.
Aside from creating the project plan, project managers are also in charge of project scope documents and costs in order to avoid distractions for the designated team. To avoid risks, they schedule tasks appropriately and report progress to leaders so risks can be addressed quickly and effectively.
What is Project Lifecycle?
The project lifecycle represents the stages involved in a project’s progress. It includes:
- Definition and planning
1. Project initiation
The first step is project initiation. In this phase, project managers determine the project’s objectives and overall scope. A project manager looks for and identifies vital stakeholders during this phase while defending the funding for the project.
Project initiation can include numerous sub-activities, such as identifying the scope, project stakeholders, and deliverables, drafting a statement of work, and determination of initial costs. All of these activities can easily be determined by using the technology for efficient project management.
2. Definition and planning
Once the initiation is done, we move to definition and planning. In this phase, managers create a project plan, which includes the project’s tasks, schedule, resources, and constraints. In this stage, project managers establish the project budget, identify potential risk, and prepare necessary mitigation strategies. Along the way, managers can use manager feedback tools in order to keep each other updated and notify one another of possible errors and risks.
3. Project Execution
The majority of the work on a project is done in this phase. Project managers make adjustments depending on unforeseen changes that arise throughout the project and ensure that designated tasks are done in line with the established timetable.
Say your social media marketing campaign is kicking off to promote your new event. During the execution of the campaign, you need to be able to track the progress across all platforms, analyze the results, and improve with each step.
4. Project performance
In this phase, project managers can use different project manager tools. Usually, they use specific Key Performance Indicators (KPIs) to monitor the progress of the project. They adjust the plan where necessary based on the ongoing results of this measurement.
Pro Tip: When you kick off a project to introduce your new product to the customers, iterations of your project development will include receiving feedback and ideas from the audience directly. Optimize this process by using tools such as a feature request tracker to navigate through information easily and prepare the next generation of your product.
5. The closure
A project is closed once the team has completed all tasks and the project owner has signed off on all deliverables. During the course of a project, project managers must prepare resources and budget utilization reports as well as lists of tasks that were not completed. Once the project is evaluated for performance, it is determined if the project’s goals were met.
Top 5 Project Management Essentials
Let’s identify the essentials for successful project management and what kind of tactics, tools, methods, and project management software you need to use!
#1 Collaboration tools
The project cannot be successful if there’s no successful collaboration. Thus the right collaboration tools are essential when working on projects. Collaboration tools make it much easier for people to stay in touch and communicate.
Rather than relying on email for communication, collaboration tools allow people to know the progress of tasks and deliverables in real-time. Integration tools help keep teams in sync by integrating disparate systems in a flexible and autonomous way. Such tools are especially important when there’s a need for staff augmentation due to the increased number of employees on one project.
#2 Gantt Chart
The Gantt Chart is the most popular project management tool. It organizes every little detail on your project. The tool’s charts let project managers properly allocate resources and time for milestones and deliverables.
It helps recognize limitations and, more importantly, adjust deliverables accordingly. Also, in a Gantt chart, links between tasks can be automatically adjusted if one task is delayed.
#3 Project baseline
The baseline represents the standard you set for your project against the actual performance of the project. The project baseline is a project management tool for scoping, costing, and scheduling projects. Your baseline enables you to monitor your ongoing improvement.
#4 Workflow software
At its essence, project management is all about ensuring that all the moving parts reach the right people at the appropriate times.Keeping things organized on an individual basis is essential, but it’s even more beneficial to have a workflow software that keeps things going smoothly and as effectively as possible.
Use one tool to assign, automate, track, and train. Some advantages include more accountability, improved consistency, fewer mistakes, less time spent looking for solutions, and quicker training.
#5 Project team activities
Team activities can bring a bit of fun, improve morale, and boost energy and productivity in a team member all at once. Furthermore, it can motivate team members to work together to find the best possible solutions by encouraging creativity and highlighting their talents. Such activities are great for bonding together and stepping out from all those project tasks to gain motivation and inspiration.
Project management is ubiquitous in almost all organizations and companies. But in order to complete a successful project, each business will need project management essentials.
Using such tools will clearly define goals and project management processes. Thus, organizations that use project management tools are more likely to achieve their objectives and hit their sales targets.