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To have a successful business, you have to satisfy customers’ expectations. Which means that first, you have to make it clear what your customers can expect of you.
In this blog, I am going to explain why a formal SLA for customer service is necessary to your company’s customer support operations.
Definition of an SLA in customer service
SLA is an acronym for service-level agreement. It is an agreement between a company and its customers on what products or services the company will provide them and the quality they can expect.
It’s a contract with a particular set of customer service standards concerning support, as well as what happens when those standards are not met.
A service-level agreement can also be used internally in a company, such as between departments. With such an agreement, everyone knows what to expect, what is expected of them, and how to remedy the situation if those expectations fall short.
Reasons you need an SLA for customer service
An SLA lays a solid foundation for growing businesses. The following are the most important reasons why you need one for your customer service.
1. Establishes clear expectations for customers
An effective service agreement defines clear expectations for performance and relationships in quantifiable and reliable terms.
By clarifying response times, escalation management procedures, resolution times, and the scope of services, SLAs eliminate ambiguity and outline precisely what customers can count on and what lies beyond your service boundaries.
Example:
A cloud storage provider promises 99% uptime with a 2-hour response time for technical issues.
When a business client experiences a service downtime, they know when support will respond and that the platform will be restored quickly, avoiding panic or guesswork.
2. Enhances compliance and risk management
Companies in highly regulated industries need to ensure strict compliance with legal and contractual obligations. SLAs help assure this compliance and reduce operational risk by clearly defining roles, responsibilities, and escalation procedures.
Moreover, they explicitly detail a company’s commitment to complying with relevant laws and industry regulations, such as the General Data Protection Regulation (GDPR). This assures customers that their service provider adheres to high standards.
Example:
A SaaS company includes SOC 2 Type II compliance in its agreement, ensuring that all support interactions meet strict data privacy standards. This protects both the organization and its clients from legal risks.
3. Builds trust and accountability
A detailed SLA creates a mutual understanding of responsibilities. When businesses consistently meet their SLA commitments, it builds trust. If they fall short, the agreement provides a framework for accountability and remediation.
The SLA serves as a tangible demonstration of a company’s commitment to its clients, which is vital in a marketplace where 46% of consumers emphasize the importance of trusting the businesses they patronize.
Example:
An e-commerce help desk platform includes a clause in its SLA that guarantees a refund or service credit if customer support fails to respond within the agreed-upon timeframe. This shows customers that the company stands behind its promises.
For the provider, reliably meeting or exceeding SLA terms showcases their commitment to clients and fosters strong customer trust.
4. Enhances customer satisfaction and loyalty
When customers know their issues will be addressed within a promised timeframe, their confidence in your service grows. Consistently meeting SLA targets can lead to higher customer satisfaction rates and long-term loyalty.
Research shows that 43% of consumers spend more on companies and brands to which they are loyal.
Example:
A digital bank sets a clear service-level agreement: all disputed transactions will be investigated and resolved within 72 hours. To meet this commitment, it leverages AI for customer experience to detect dispute-related messages across chat, email, and app feedback, automatically categorizing and routing them to the appropriate resolution team.
Customers receive timely updates throughout the process, and most cases are resolved within the promised timeframe. This transparency and reliability foster trust, encouraging customer loyalty and positive word-of-mouth.
5. Strengthens brand reputation
Consistently failing to meet customer expectations can damage your brand’s image. SLAs help maintain consistent service quality, reducing the risk of negative reviews and public dissatisfaction.
By choosing a company that always commits to high standards, the customer can be assured that the service they rely on is backed by formal processes and a provider that is motivated to avoid reputational damage.
Example:
A logistics company promises delivery within 48 hours as part of its SLA and consistently achieves a 98% on-time rate. This reliability not only reduces customer complaints but also becomes a powerful marketing tool.
Customers trust the brand for dependable service, leading to repeat business and strong word-of-mouth referrals.
6. Provides customers with a benchmark for performance
A good service agreement establishes specific Key Performance Indicators (KPIs) that serve as a foundation for evaluating customer service success.
Common examples include:
- Uptime percentage
- Average support response time
- Issue resolution time
Each SLA metric defines a clear, measurable target, so customers know exactly what service to expect. This transparency ensures providers are actively managing performance, gives customers confidence in service quality, and promotes customer success.
In case standards go below expectations, customers have objective data to hold the brand accountable.
Example:
Richard subscribes to ConnectFast, an internet service provider that promises 99% uptime and 4-hour issue resolution. One weekend, he experiences a 48-hour outage with no timely response.
He documents the incident and refers to the SLA terms when contacting support. Using the SLA breach as evidence, he requests compensation. ConnectFast acknowledges the issue and offers a service credit for the next billing cycle.
7. A service level agreement streamlines communication
A well defined SLA enhances communication by clearly outlining when and how updates, such as status reports, escalations, and issue closures should be shared. This clarity reduces confusion and keeps both customers and service teams on the same page.
When everything’s clearly defined, customers benefit from:
- Efficient issue reporting with clear contact points and processes
- Consistent updates that build trust and transparency
- Peace of mind knowing the provider is proactive and committed to honest communication
Example:
A customer using a payroll software platform discovers an error in a tax calculation. Instead of sending a frantic email, their service contracts directs them to submit a “High priority” ticket through the official support portal.
The agreement guarantees a response from a support specialist within two hours and a resolution within one business day. This process benefits the clients by removing all guesswork in customer communication.
8. Facilitates prioritization of support requests
SLAs help support teams prioritize requests based on urgency and impact, ensuring that critical issues are resolved first. This structured approach improves service efficiency and minimizes downtime.
As a result, customers enjoy faster resolutions and greater confidence in the reliability of support.
Example:
The booking system at Starlight Airlines suddenly crashes during peak travel hours. The airline contacts their IT provider, AeroTech Solutions, which operates under a strict SLA.
Because the issue affects flight operations, it’s flagged as high priority. AeroTech responds within 30 minutes and restores the system in under 3 hours.
Thanks to the SLA, Starlight avoids major delays and gains trust in AeroTech’s ability to handle critical issues swiftly.
Leverage SLA for customer service to grow your business
A well-defined service-level agreement can help you deliver exceptional customer experiences, attract more customers, and grow your business.
Check out BoldDesk to see how you can implement effective SLAs in your customer service processes. You can also try a 15-day free trial or book a live demo to discover more of its features. For more information, contact BoldDesk support.
We hope this article was insightful. Do you have any additional comments? We’d love your thoughts! Share your comments and suggestions below.
Related articles
- What is an SLA? How does an SLA improve productivity?
- Top 7 SLA Best Practices to Improve Customer Service
Frequently Asked Questions
SLA compliance is typically monitored using customer service or help desk software. These tools track response and resolution times, comparing them against the agreed targets to ensure service standards are met.
When the service agreement is breached, it may trigger penalties, service credits, or escalation procedures. More importantly, it signals areas where service delivery needs improvement.
A service-level agreement for IT support services is a formal agreement between an IT support provider and a customer. It outlines expected response and resolution times for issues, ensuring the customer gets good and timely service.
Yes. SLAs can be tailored based on customer segments or service plans. For example, premium customers may receive faster response times than standard users.
A customer-level SLA is tailored to a specific client.
Example: A company commits to responding to critical issues from a VIP customer within 30 minutes and resolving them within 4 hours.
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2 comments
Miloni Salot
December 5, 2023 at 11:56 am” Excellent insights into the importance of having an SLA for customer service! The article effectively highlights key reasons businesses should consider implementing an SLA to enhance their customer support strategies. It’s crucial to set clear expectations and standards for service delivery, and this piece does a great job of explaining how an SLA can contribute to improved customer satisfaction.
i also covered it in detail on blog here https://t3planet.com/blog/why-your-business-need-sla/. It provides additional valuable information that aligns with the points discussed in this article.
zoritoler imol
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