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How to Calculate Your Leads Goal for Sales and Marketing Alignment

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Start to take control of your marketing and sales Information with SLA

What is a SLA?

There is a long history of pain and misalignment between sales and marketing teams. These two groups often suffer from a lack of transparency, and are judged on different metrics and timelines – which devolves into finger pointing and blame sessions. 

But, sales and marketing teams are not doomed to that fate. Effective alignment of sales and marketing is critical to a seamless customer experience. And according to the Aberdeen Group, companies with good sales and marketing alignment achieved 20% annual revenue growth. Essential to a productive relationship is establishing concrete metrics and mutual responsibilities for both marketing and sales. This is where a Service Level Agreement (SLA) comes into play.

With clear expectation on how many quality leads marketing will generate each month, and how sales will follow up with those leads, a SLA defines the expectations and provides hard numbers for both teams to measure their success.  

How to use SLA

SLA is designed to help delve deeply into your pipeline numbers and create your own Service Level Agreement with your sales team. Using our four step process you will: define your customer close rates, determine a dollar value for your leads, identify how many monthly leads both sales and marketing need to hit your monthly numbers, and tally your monthly productivity against these goals. 

In order to fill out this template, you should have your sales and marketing analytics in front of you. Look at your historical marketing performance and Salesforce, or your own CRM, closing histories to make sure you have a clear picture of how leads proceed through your funnel. Most of these insights are available in integrated marketing software platforms like HubSpot and your sales CRM tools.

How to Create your own SLA

In order to create your own SLA follow the next steps.

Step 1

The first step of your sales-marketing SLA is to examine your sales closing rates, and specifically tease out what percentage of your leads ultimately become customers. This analysis looks at the historical performance of both your marketing and sales, and fills these holes in with actual performance data.

To tease out your overall % closing rates, look at your last six months of sales data for each channel that you use to generate marketing leads.

In the SLA example sheet, we include several inbound sources including organic, social, email and PPC, as well as outbound calling. Additionally, we include our three customer personas: small businesses, medium businesses and enterprise companies. When you move to your SLA worksheet, be sure to cover every channel that your company uses, and add a column to include all your customer personas.  

Take the average close rate and add it to the correct cell in the document. Remember to update this spreadsheet on a monthly basis as your channel performance will change over time.

Step 2

The second step in your SLA development is to determine the value of each lead source. Knowing the value of your leads is pivotal in evaluating your overall pipeline, and deciding where to allocate your scarce sales and marketing resources.

While important, calculating the value of your leads is simple. First, identify your average sale price for each of your core personas. Again, find this data in your marketing software and sales CRM tools. As you can see in the SLA Example, your average small business sale may be $200, but a larger enterprise company may double that number.

Input your average sale value into the top “average sale price” row for each persona. Our SLA template will automatically calculate the value of your leads based upon the % close rates you filled in for step one.

Again, revisit your average sale prices for your personas on a regular basis to make sure you are holding your teams to the right numbers.

Step 3

Step three helps your marketing team track its monthly lead generation by channel. By looking at actual monthly data in real time, you can see which channels are performing each month, and which need to be addressed to enable your team to hit its projected numbers. Monthly lead tracking gets the whole team on the same page, offers insight into which strategies are working, and helps pinpoint underperforming channels in near real time.

The SLA Example shows a snapshot of a month’s productivity. For maximum visibility, update these leads on an ongoing basis. HubSpot managers often monitor these numbers daily, and we send the marketing team a daily summary of our month-to-date performance.

In step three, you will see the template includes an additional row on the right of the persona averages, which tallies the total leads your team generates each month. While its valuable to look at your monthly numbers by individual channel, your marketing team’s ultimate success is determined by your team’s total numbers – and this is the statistic that you want to have at hand for your sales conversations.  

Calculate your SLA

The final section of our calculator will tally your SLA commitments. As you fill in steps one through three, the SLA calculator will automatically populate the total SLA fields for each channel and persona. This worksheet will sum your channel and persona SLA, and your overall monthly totals.

Ultimately, the total monthly SLA you commit to should equal the total potential revenue each lead segment can produce per month.  

As you fill out your tables each month, the SLA calculator will show how you are tracking towards your monthly SLA goal.  

Conclusion

Armed with actual dollar values for your lead generation efforts, you know how many types of leads you need in order to reach quota. This eliminates any confusion over what leads marketing is responsible for each month and creates alignment between your sales and marketing teams.

Use this SLA as a tool to hold sales accountable for following up with these leads. With this data, your sales team can identify exactly how many times they need to attempt contact with their leads in order to deliver on their numbers.

Finally, close the loop in your reporting, and build this SLA into your reporting structures, so that this tool becomes a resource for both marketing and sales teams to measure your mutual success.

Source provide by HubSpot 

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