Why a Service Level Agreement with Sales is a Bad Idea – Part II

Service level agreements (SLA)for lead follow up are all the rage in marketing and sales organizations. Promoted by marketing analyst firms as one of the things that help with sales and marketing alignment, in my view they do the opposite. In part I of this post, we walked through how SLAs are used with two organizations that aren’t 100% aligned.  Theoretically, sales and marketing better be 100% aligned.

But lets move beyond theory for a few more reasons why SLAs don’t work:

  • They don’t work.  Crappy leads with an SLA won’t get followed up on any faster with an SLA.
  • The sales team doesn’t care about your SLA, nor does the VP of Sales or the CEO. All they care about is revenue.
  • SLAs prevent a deeper discussion around perceived lead quality and the time to follow up.

First – they don’t work.  You might think they work.  You might think the reps are following up within the time frame, but most likely they are not.  Why?  Because at the end of the day, whether they make their number is all about the revenue they book, not whether they keep to an SLA.  Their manager only cares about this, the managers manager only cares about this. If the reps believe a batch leads is bad, they won’t deal with them.  No sales manager is going to make his team spend time on something they don’t believe in due to an SLA. Said another way, you can legislate action or compliance.  Be enough of a pain about the SLA, they will meet it by changing whatever they need to in the system.

But beyond reps not following up on SLAs, an SLA prevents a deeper discussion of lead quality and follow up.  Because, here is where sales and marketing are aligned — marketing wants to deliver the best leads they can. Sales wants the best leads they can get.  No sales manager would be happy with their sales team sitting on hot leads. Just the opposite.  Sales managers know the shelf life of leads goes down dramatically by hour.  So rather than worry about the SLA, ask the sales manager “why isn’t the sales organization following up on these quickly?”.  The answer might surprise – not enough time, perceived poor quality, or maybe not enough staffing.

Each of these issues has solutions.  Not enough time? Change the timing of lead delivery – maybe turn down PPC until after the quarter is over qnd the reps have more time. Perceived lead quality problems?  Measure past history for leads and provide the sales leadership with an expectation on opportunity creation.  If the opportunity creation is too low, discontinue the program or give the sales team the option of cancelling the program.  Ultimately, the opportunity creation rate from marketing leads should be compared against cold calling success.  If marketing leads falls below the cold call rate, or even if it gets near the cold call rate, expect sales to want you to cancel the program.

Staffing shortages is another problem marketing can help with.  If sales is short on headcount, reduce lead flow until they can catch up.  No SLA can fill vacant sales positions.

Nothing in this blog should imply sales and marketing don’t jointly track time to follow up on leads. Tracking and measuring follow up time is key.  But there is a difference between this and an SLA.

Sales wants to make money.  Sales wants to follow up on hot leads yesterday.  Marketing wants to make revenue.  Marketing wants to help sales do this and understands they need to provide hot leads that sales wants to follow up on yesterday.  Marketing and sales are actually highly aligned. You don’t need an SLA for this.

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