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5 Key Elements Of An Effective Sales SLA

sales SLASales SLAs (or Service-Level Agreements) are critical documents for establishing process alignment amongst your sales team, and other stakeholders with responsibilities related to sales (e.g. marketing and customer success). Without a proper sales SLA, it’s easy for your sales development team (SDRs) and your Sales Executives to make mistakes around account hand-off. Eventually, your startup’s sales culture itself may be at risk as reps begin to blame one another for communication failures that could have been easily avoided were they spelled out clearly.

Sean Kester joined us in the Bowery Capital studio last Friday to discuss how SalesLoft’s sales SLA has been critical to the growth of their sales team. He joined SalesLoft as their first-ever sales development rep and led the Company’s efforts to build the highly effective sales development organization (both inside and outside) that is driving its impressive growth today. As a follow-up to our session on Friday, we thought it would be helpful to lay out the 5 key elements of an SLA, focusing on the points that, in Sean’s experience at SalesLoft, have ensured that all sales stakeholders were properly aligned.

1) Lead Qualification

Most modern sales orgs use some sort of sales qualification framework: a few examples include MEDDIC, BANT, and ANUM. As Sean points out, SDRs usually qualify prospects based on the first half of any given framework. In the case of ANUM (which SalesLoft uses), the SDRs focus on Authority and Need. A good sales SLA should bridge the gap between theoretical framework and on-the-ground selling by making clear what the exact criteria are. Criteria for Authority might include: they’re senior enough to actually sign to get a deal done, they hold a team credit card, or they were asked to solve a relevant pain point or evaluate vendors in the space by their manager. Criteria for Need might include (from the perspective of SalesLoft): they have a sales team, their prospects exist on LinkedIn, or they actively prospect to discover new leads. The SLA would require that outbound SDRs agree that they will identify and prospect only into the ideal customer profile, which meets the above type of criteria (and that inbound SDRs take the same approach in vetting marketing-generated leads). In Sean’s view, the more specific, the better. So any additional elements of the customer profile that are known to be effective should also be included. For example: specific titles, departments, company sizes, industries, and functions (which is critical given that roles often vary in their actual responsibilities company-to-company). Finally, a good sales SLA should require that the Sales Executive assumes that the prospect / lead in fact meets the first half of the framework (in this case, Authority and Need). The Sales Executive will dig further into the prospects’ situation with specific questions to identify problems and gaps in their prospecting strategies, and create a sense of Urgency (which brings us to the second half of ANUM where the SE is primarily responsible). Once Urgency is created through such questions, pricing is presented and budget is identified (i.e. Money, the last and final step in ANUM).

2) Lead Passing

As Sean describes in the podcast, Lead Passing is essential to a sales SLA, as it determines when and where responsibilities start and end for various members of the sales team. Once the lead has been qualified, the SDR will distribute leads in some sort of structured way. SalesLoft, for example, has a shared Leads Pass Sheet document which is used to distribute leads in a Round-Robin fashion. In your SLA, ensure that whichever Sales Exec is “next” always gets the lead, and define what happens in the case that said SE isn’t available when the lead is ready for a demo. The SLA will spell out that the Sales Executive should understand that a “perfect” Round-Robin lead pass system is not always feasible, largely due to scheduling. But the key here is that the Sales Executive will trust that the Sales Development team, and overall process as defined in the SLA, will ensure that they receive a fair and equal amount of demos over time.

3) Lead Ownership

Even when the lead passing process is established, an effective SLA will additionally ensure that it’s clear which one person “owns” a lead at any given time (as that may not always correlate perfectly with passing). At SalesLoft, for example, the SDR assumes full ownership over a prospect until that prospect has completed a demo with the right Sales Executive. In cases of issues with the demo (missed, rescheduled, cancelled, etc.), the SDR is required to reschedule the meeting back onto the Sales Executive’s calendar. SalesLoft’s SLA, for example, explicitly states that the SDR will not receive any commission until the demo has been completed, as they own it fully until that point. Sean highlights that in his experience, you need be detailed in a sales SLA down to the minute. As he writes, “the Sales Executive may send an email to the prospect 5-7 minutes after the proposed meeting time to confirm the meeting and send a reminder to the prospect. After 11-13 minutes, the Sales Executive must chat, call, or email the SDR to notify them that the prospect was a No-Show.” If a prospect “goes dark” or fails to show at the demo altogether, the exact type of notification, follow-up cadence and lead-related data entry an SDR must execute should be defined. Sales Executive ownership should be equally as clear: if the SDR schedules and notifies the SE properly per the SLA process, and the SE misses or doesn’t show, the fallout is on them (and consequences, once again, are spelled out in the sales SLA).

4) Calendar Invites

This point is quite straightforward but a very important aspect of the sales SLA. The SDR, generally, will be responsible for scheduling sales demos on the Sales Executives’ calendars. But it must be clear exactly how to handle edge cases, like when the SE is busy, or what happens when an SDR accidentally double-books an SE. Similarly, the SE must handle their end of scheduling appropriately. At SalesLoft, the Sales Exec must keep their calendar pristine, transparent and up-to-date at all times; if the SE fails to mark an existing event on a calendar (be it work-related or otherwise), the sales SLA makes it clear that they forfeit the lead.

5) CRM Entry

As we’ve discussed in many Bowery Capital blog posts and podcasts before, proper CRM data management is fundamental to a sales process. An effective sales SLA should make it clear that “if it’s not in the CRM, it didn’t happen.” Especially given that most SDRs are paid based on some variant of meetings or demos scheduled / completed, an SDR cannot be responsible for marking these done in the CRM. In the same vein, a Sales Executive is compensated on a deal basis, so must be required per the sales SLA to record relevant developments in a timely and accurate manner. Use the SLA to avoid potential conflicts of interest in the CRM data entry process.

A sales SLA that adheres to these 5 key elements will help any startup ensure sales alignment, especially when it comes to the relationship between your sales development team and your Sales Executives. But one additional, more global requirement of a well-crafted SLA is also worth highlighting: inter-team trust and respect. It can be all too easy, as Sean explains in our podcast, for SDRs to be considered the “bottom rung” in a sales organization, or for Sales Executives to take the easy way out by blaming sales development for mishandling leads. Equally, the SDR has a responsibility to never “un-qualify (a lead) too early” or “give up too soon.” The SLA should leave no room for argument over who should do what in a sales process to avoid this kind of misalignment, and it should drive home that deal wins are team wins. Amongst other playbooks and helpful materials, Sean has made SalesLoft’s full sales SLA publicly available, which is a great reference piece as you consider the above or the companion podcast. If you haven’t given it a listen yet, check it out here. Thanks from the Bowery Capital team and see you Friday for another episode.

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Nic Poulos
Nic Poulos

Nic is a Principal at Bowery Capital based in New York. Prior to forming Bowery Capital, Nic was an Associate at AOL Ventures where he helped drive investment in and support of over 20 companies, primarily in the enterprise software space. Before AOL Ventures, he served as a Manager at Advertising.com, leading various business development initiatives focused around ad tech and sales. Earlier, Nic worked as a technology investment banking analyst at GCA Savvian Advisors in the firm’s Internet group. While there, he participated in the acquisitions of Broadband Enterprises and Register.com, as well as various early- and mid-stage private financings. Nic holds an A.B. in History from Princeton University.