Are your sales and marketing departments like peas and carrots? Or more like oil and water? Unfortunately, too often the answer is the latter. (And public relations? Do they even matter? But that’s for another discussion.)
The fact is that having your sales and marketing teams aligned and in agreement on the company’s overall goals, and the specific targets each group needs to hit to achieve those goals, is vital. A 2010 study by the Aberdeen Group showed that organizations with good alignment between sales and marketing teams achieved 20 percent annual revenue growth. (Click to tweet!)
One way to ensure everyone is on the same page, rather than blaming each other for failure to succeed, is to literally put it in writing. It just takes a little time to create a clear record of current results, expected outcomes, and how each department contributes toward achieving revenue goals.
As with any marketing decision — or really, any business decision — you make, the first step is to Do The Math. Three sets of data go into determining commitments for the service level agreement (SLA) that will unify your sales and marketing teams:
Sales closing rates for each lead generation channel
Value of leads generated by each channel
Volume of leads generated
Combined, these figures point toward realistic revenue-driving commitments for each department.
Let’s take a closer look at each figure, along with how they might look in an SLA document.
Sales Closing Rates
Do you know what percentage of your leads ultimately become customers? This is the first step in determining how many qualified leads the marketing department needs to provide to sales. To find this figure, dig into your last six months of sales data for each lead generation channel. This could include organic search, social media, email marketing and PPC, along with outbound calling. Add other lead generation channels if appropriate for your business.
I suggest you also break each of those channels down by buyer persona. This will give you the most accurate details on your sales closing rates.
Value of Leads
Second, determine the value of leads from each of your lead generation channels. What is the average sale for each buyer persona and each channel?
In our example below, the average sale to a small business is $200, while the average sale to an enterprise company is $400. When you multiple the average sale for each persona by the closing rate for each lead generation channel, you can determine the value of each lead.
In this example, the value of a small business lead ($200 average sale) gained through an inbound email channel (41 percent closing rate) is $82, while the value of an enterprise company lead ($400 average sale) gained through organic search (3 percent closing rate) is $12. (Do I need to say these are simply hypothetical figures? You own results will be much different.)
Lead Generation Tracking
The third portion of our worksheet template 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.
For maximum visibility, update these leads on an ongoing basis. We also include an additional row to tally the total leads generated each month. While it is valuable to look at monthly numbers by individual channel, a marketing team’s ultimate success is determined by the team’s total numbers – and this is the statistic that you want to have at hand for your sales conversations.
Commitments for Sales and Marketing Alignment
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.
If you use our template and fill in the leads generated as you progress through the month, you will instantly be able to see how your actual lead generation compares to what you need to achieve your monthly goals. Share the information frequently with sales and marketing, so that everyone is pulling together and working from the same information. When you close the loop in your marketing, tying specific sales back to their lead generation source, and report on sales closing rates and lead values, this worksheet becomes a valuable tool for both sales and marketing to measure their mutual success.
Does your company have a service level agreement in place to keep sales and marketing focused on working together? How often do you revisit it, and how has it evolved over time?
If you don’t have one, now is the time to get started. Download the template you see in the screenshots above, plug in your close rates, lead values and lead generation figures, and create the right mix to bring the sales & marketing teams back into alignment.