Should sales and marketing have SLA’s between the two organizations? Why/why not?

SLA's from this perspective suggest a disconnect within the organization between strategies, structure, processes, rewards and people. Agree with Dan, do sales people need another piece of paper that does not truly build the relationship? Do they not already have documents in place that address what is probably duplicated within the SLA? Sounds like another symptom posing as a problem.

SLA’s between two or more parties are intended to provide clarity in terms of accountability, roles and responsibilities, deliverables, timeframes and results. As has been so aptly pointed out, they don’t work effectively between departments internally. However, the spirit of a SLA can and should be embodied within the strategic business planning process. The performance expectations and planning assumptions should be detailed during the “top down, bottom up” planning cycle, so all departments, including sales and marketing, fully understand and agree to the benchmarks that ultimately contribute to the success of the business. This will help to ensure the proper alignment of resources and that the established milestones can be met on time and within the budget parameters.

One of the most effective sales and marketing machines I have seen in recent years can be found at Hubspot. They are huge proponents of Sales and Marketing SLAs and have published theirs with a "how to" on how to create one. http://blog.hubspot.com/blog/tabid/6307/bid/5885/Improving-Sales-and-Marketin...

My take on the SLA question is this... how can it hurt to have these two teams come together, define their requirements and expectations and then document that understanding?

An SLA?

Seriously?

This is silly, passive-aggressive business mumbo-jumbo. How hiring the right people for the job and demanding passionate activity from our teams.

Another piece of paper is hardly the answer. And the fact that we might consider it as a viable alternative to common sense accountability and bold thinking, is a sign that we have lost our way.

What we really need is Senior Level Accountability. There's an SLA for you. Chances are, it might actually work this time.

Dan

Great conversation.

We need corporate terrorists to blow up all of the silos.

SLAs are only as good as the leaders that enforce them. We need leaders that view and treat their organization holistically as one living organism with a singular purpose; marketing.

Accounting, Customer Service, HR, Logistics, Operations, Production, and Sales should all work cohesively for a singular purpose, creating, bringing to market, and delivering products and services with consistent quality.

Every facet of a business impacts marketing. Marketing is not a department that creates cool graphics, acronyms, copy, and packaging. Marketing does much more than generate and nurture leads. Marketing includes everything we do to bring a product or service to market – and - no department is excluded from the process regardless of the existence of silos.

Additional note to this - Iron Mountain is currently presenting and showing off their mutual SLA's between marketing, sales & ops. It's mutual and has both groups focused on one common goal - revenue!

Since implementing their process - 12 months and developing SLA's they went from a 4% of revenue delivered by marketing to 25%. SLA's when done right work!

Carlos Hidalgo
The Annuitas Group
@cahidalgo

Hooray for Dan, Jeremy, and Scott for calling-out the internal SLA nonsense. A sales-marketing SLA and $2.25 gets one a subway ride in NYC.

There are no internal “customers” within an organization. The only customers sales and marketing have are real customers. SLA or not, sales cannot “fire” marketing and marketing cannot “fire” sales. The groups can collaborate … or not … to acquire and keep real customers and thereby sustain and grow the business.

Strategies that encourage collaboration are good. Divisive tactics like internal SLAs are not. Doing it right takes big minds, not big heads, in sales, marketing, and the C-level offices.

None of this is important, none of it matters, nobody gets paid and nobody gets to keep their job unless the company sells something.

Marketers, in too many organizations, still don't think of themselves as critical path to revenue. They act like a cost center, get frustrated when the CFO won't give them more money, and plead ignorance and amnesty when the sales team doesn't hit their quota.

Ladies and gentlemen, it's all about sales. Marketers need to own that. An SLA is a great tool to help align teams and individuals to the specific metrics required to hit and exceed sales & revenue goals. It will not, magically, drive performance. It will not direct day to day activity. Or intent. Or eliminate animosity between the groups.

Square pegs don't fit into round holes. For organizations that have a unifying view of the end-goal, an SLA is simply public confirmation of what everyone's working towards in the first place.

The title "Should sales and marketing have SLA’s between the "two organizations'?" Answers subtly addresses the problem. Sales & marketing are not seperate organizations, although they are treated that way. They are two departments in one organization. Just sayin'

I know I am late to this thread but the thought that SLA's are nonsense is a scary one if organizations actually buy into that. Am sitting here at the Sirius Decisions Summit and they hit the nail on the head. SLA's are not just one way or set on one department. SLA's are mutual as marketing has SLA agreements to sales and sales in turn has SLA agreements to marketing.

The reason many organizations fail when they develop SLA's is they truly are just sheets of paper. To have effective SLA's in an organization they have to be based on a solid process that is jointly owned and developed by marketing and sales, then enabled by technology.

Carlos Hidalgo
The Annuitas Group
@cahidalgo

So … is the consensus that if we create and implement marketing-sales alignment, and if executive management enforces process and accountability, then performance and results improve? Hooray! Let’s endorse that concept and consider any SLA merely the artifact that describes it all. Peace.

At the risk being the village idiot, I have to reach out with my concern about this topic. I zealously resist the idea of the SLA.

I am looking back to my experience as CEO of a large company. I didn't ask my SVP's to put together a document for how things should work. I set the direction for the company, created a culture of excellence, hired the best people possible, and then held people accountable. We grew over 800% generating millions and millions of dollars in less than 18 months.

No SLA.

The mission was inherent. The goal was what ran through our blood. The task was our heartbeat.

It's sad and somewhat disheartening that we are left grasping for the semblance of structure and agreement through the artifice of a intra-departmental contract.

Really? Is that what we have come down to.

What about passion and purpose?

We can call it altruism and shrug it off as "pie in the sky". But it's that same common sense pragmatism that grew the heck out companies like Zappos.

Where are their SLA's?

Setting minimum levels of satisfaction just makes me throw up a little in my mouth.

Hi Leanne! Spot-on! The curious thing is that in carefully reading the pro-SLA comments, most appear to agree with us in principle about the need for wise, coordinated business practices. But the pro-SLA folks apparently believe that charters and operational documents and SOWs and POs are not enough … that somehow internal über-agreements promote / compel cooperation. In my experience, focus, clarity, and continuity backed by cohesive, assertive management work better.

Hey Lauren... The short answer, from my opinion and my formal training is that sales should REPORT to marketing - especially in today's marketing world. That would end the SLA conversation because marketing would be accountable for the revenue number. I wrote a post on this a couple of months ago... here... http://www.leadingresults.com/sales-is-function-of-marketing-and-should-proba...

I agree - sort of - with Dan. Single reporting line helps a lot. We've found over the last 5 years that the higher order issue to get right is NOT marketing Vs sales, but that most CEOs & CFOs don't actually understand both individually, and have even less chance (through all the squabbling) of leading the the approach Dan suggests. In other words marketing Vs sales is just a symptom. So even an SLA between marketing and sales as two areas with a single head will not help if the company itself - from the top - does not have BD & revenue process as a strategic focus. When you get to that level of process maturity, there is no wriggle room for either of the specialisations. Just as there is no longer daily arguments in mature supply chain or manufacturing process. Even good intent by marketing and sales is not the same as good revenue strategy from the CEO & CFO...

When I hear the term SLA I find it difficult to reason with the implementation of one within an organisation.

An SLA is a document that describes the minimum performance criteria a provider promises to meet while delivering a service. It may also set out the any penalties that will take effect if the supplier fails to meet these expectations. It is a legally binding contract between the service requester and the provider. Perfect for controlling an outsourced supply arrangement but could be counterproductive at a cultural level?

I would have thought the clearer path would be to understand the revenue problem within the company and build an organisational system – Owned by the CEO - focussed at solving it where every member of the team has a measureable part to play.

Then again I may be getting swept away with terminology...

Hello to all respondents. I reached out to Hubspot to ask them to participate in this conversation. It is interesting to hear what the pundit/consultants have to say (and yes I am in that mix) but even more interesting to learn about real world application of these theories.

Hubspot is HOT so let's see what they are doing and maybe we can all learn something. Many thanks....

Trish, great answer! If it takes SLA's to resolve the gap that tends to exist between sales and marketing, then so be it. Any business that has adopted formal process management will develop cross-functional performance indicators, i.e. SLA's, and sometimes the cross-functional indicators are the turbo-chargers for getting exceptional performance. For example, in a bank the loan producers (sales people) do better when their SLA's and KPI's are coordinated with those of the loan processors (order fulfillment people). In a manufactuiring shop, order processing coordinates with manufacturing AND inventory management. Need I go on?

So if it works in operational business units, why shouldn't it work in customer-facing ones? I'm a little tired of sales being left out of the loop on all this measurement stuff anyway. So as Trish says, how can it hurt to have two closely-related teams understand each other's objectives and constraints, so they can mutually produce better results?

If you can't measure it, you can't manage it - or improve it either.

Challenge: I have offered up a high growth company where an SLA between sales and marketing has worked. Can one of the participants who say it will not work offer up a real life example where it has not?

PS - the challenge is not passive/aggressive... it is straight up aggressive!

Let's have some fun with this discussion!

Perhaps your vision of an SLA is too rigid. If you think about it as a conversation on expectations that becomes documented rather than a binding CYA contract - is that more palatable to you?

Hubspot (my real world example) is a fast growing company that is adding 50 new sales reps a quarter. These new reps were not privy to the original conversation but because of the SLA they have a set of expectations on where marketing can assist and how they can respond effectively. This dramatically shortens their ramp time. Why is that bad??

You know Dan, sometimes you need a better process to build better people. It might not be as fun or altruistic but sometimes it just needs to happen. Just something to think about.

PS - I am at 30K feet on a plane so this is a fun conversation. Thanks!!

Yay Trish! I have seen great performance out of SLA's between sales and marketing as well as between sales and operations.

Seems to me there are two controversies going on. One is the apparent controversy, "do we need SLA's between sales & marketing, yes or no." The other is, "is an SLA just a piece of paper with no meaning or impact, or is it a meaningful addition to the management/leadership toolkit?"

Maybe I'm the one who's naive (it won't be the first time). To me an SLA is the DELIVERABLE that represents the analyzed business process and provides guidance and structure. If it's just another dispensable, empty piece of paper, then please do away with it.

Trish,

Hubspot is a unique company. In my mind, they are a marketing company, backed-up by sales order-takers... It's a genius concept. But it only works in the SMB space. It is not reproducible in most of the B2B space.

It's a new take on the 1980's "numbers game" approach to selling -- except they also have the advantage of having the monopoly on the technology.

I agree that we need better processes to build better people. You and Ellen are perfectly right about that.

I just disagree that the MEANS of delivering that process is an SLA. There isn't any leverage if performance isn't achieved. It's a veiled threat.

And while the creation of intra-departmental interaction documentation might be a intellectually stimulating exercise, I just push back against the lack of emotional intelligence in the process.

I propose less process and better people.... The future is brightest when we allow creative high-achievers to set their own benchmarks for delivering outrageous results.

Dan

Go, Carlos! I think it's a scary notion too. If SLA's were nonsense, we probably wouldn't have seen some of the staggering improvements in productivity that have characterized other business functions in the past couple of decades. Seems to me that there's a deep and authentic hunger among executives to have real visibility and accountability over all business processes, so why should sales and marketing fail to make the grade?

No SLAs. SLAs encourage the idea that there is a "hand-off" between sales and marketing or some kind of clear distinction between sales and marketing activities as if each "owns" a part of the pipeline, etc. I am not a fan of this mentality.Too many companies have fragmented strategies, data tracking/analysis, tactics, and ownership that creates a competitive environment between executives and their departments. That's just wasted energy within a company and distracts everyone from what is supposed to be accomplished together.

A better option? Leadership that models collaboration, focus, and shared values and strategies.

This doesn't mean that we don't manage properly. It just means that broken management is usually simply a symptom of broken leadership. If you are at the point that SLAs are considered to manage relationships between departments, it means that leadership has failed to develop collaborative strategies and processes to deliver those strategies.

SLAs are too often a way not just to manage relationships and expectations, but a way to associate blame, separate credit, and silo responsibility. Not a good idea.

Maybe this is too obvious, but what is the purpose of a Service Level Agreement? Originally I understand it was to clearly delineate the deliverables for a specific level of investment. In my practice I call this a Statement of Work where others might call it a proposal. When I was in corporate this was called a purchase order.

Taking this understanding to an internal organizational document between the sales and marketing departments for large firms (again presumption is most small firms do not have separate departments) seems to be a duplication of existing plans and goals along with unnecessary if the vision, values and the mission have been clearly identified and consistently communicated. When I first read this post, the organizational development person in me was scratching her head because the use of such as document implies a lack of overall organizational alignment that cannot be solved between just two departments.

From two external companies using a SLA, then why not include it within the proposal and the purchase order or contract? Time is money and duplicating efforts does not make any sense. I agree with Dan this is an issue of putting lipstick on a pig.

Again I may be totally misunderstanding the original question. If so, my apologies.

Folks: I think we need to do a Roundtable on this. Stay tuned.

If you want to help, hit "reply to this answer" below and say "i'm in".

Some people have replied in the email, I am asking you to reply in the "reply to this answer" link in my answer. thanks!

Follow the continuance of this dynamic conversation in the upcoming roundtable on Thursday, 6/2 at 11am EST:

“Can SLA’s Take the S&M out of Sales & Marketing?”

Featuring these phenomenal panelists:

Ellen Bristol, Matt Heinz, Leanne Hoagland-Smith, Dan Waldschmidt, and me.

http://www.focus.com/roundtables/can-slas-take-sm-out-sales-marketing/

The thing about an SLA is that it's not a one-and-done deal. You work at it. In a bigger company, you have to set up a small, standing team of sales and marketing people to implement, oversee, and evolve the agreement. And before you start to implement an SLA, you have to have goal alignment between sales and marketing leadership. Too many marketers don't worry about how lead quality will effect sales productivity. And too many sales people and managers do not understand that marketers have to have feedback in order to improve the quality and quantity of leads. So there is a lot of training, inspection, analysis, and iteration that comes with implementing an SLA. Finally, you have to have consequences for non-compliance. I'm more of a fan of carrots than sticks but there has to be something.

I think it's especially instructive to think about how much training sales people get on how to really qualify an opportunity. Somehow, marketers must get much better training on the nuances of lead qualification, too.