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Service Level Agreement (SLA) – A Complete Guide

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Service Level Agreement (SLA)

Most service providers are aware of the importance of service level agreements (SLAs) with their clients and business partners. A service level agreement is essential at the start of every product or service offering. In this guide, I’ll take you through the following:

  • What is a service level agreement?
  • Types of SLAs, their components, and the advantages they offer.
  • Steps to implementing SLAs for customer support

What is an SLA?

This type of agreement specifies the precise services a client can expect from a company upon purchasing its product or service. The contract can include the delivery time for products, procedures for reporting problems, and the response and resolution times for support requests. It also usually includes consequences for breaching the agreement. SLAs protect the interests of both the business and customers by outlining procedures and expectations.

Learn more about the service level agreement through this article.

Types of SLAs

There are three types.

Customer SLAs

This is an agreement between a company and its consumers. The agreement includes the quality customers can expect of the service or product they purchase. It also stipulates how long customers’ issues should take to resolve and the terms of payment. Generally, this agreement covers how all the parties’ needs are to be satisfied.

Internal SLAs

This type of agreement only involves people and groups within a company. Often, there are SLAs among departments that keep operations running smoothly. Every department understands explicitly what other departments expect of it.

Multilevel SLAs

This is an agreement between more than two companies and consumers. This agreement takes place when multiple companies come together to meet the needs of their consumers.

Components of SLAs

These are the some of the common components that should be included in these agreements.

Components of SLAs
Components of Service Level Agreements

Summary of the agreement

This overview of the agreement holds descriptive information like the parties involved, the dates, and the broad elements of the agreement. It describes the mode and form of production. Moreover, the summary includes the signatories required to make the agreement official.

Terms of service

This component specifies the conditions in which to expect the services. It explains who will provide the services, to whom, when, and how long it should take. It also includes detailed information on services that the service provider will not offer. In addition, the terms of service detail specifics like the security precautions that each side must take.

Performance measurement

This component lists and describes the methods for determining whether the parties abide by the terms of service after establishing them. Moreover, it typically involves metrics and agreement on where, how, and how often the service provider will be report them. This part lets managers track the performance of their teams and make timely adjustments to their workforce or processes that help them keep up with the service-based agreement standards.

Performance measurement
SLA Reports and Analytics Dashboard

Consequences

Plans for exceptions are necessary in any agreement, in case unforeseen events prevent one party from fulfilling its responsibilities. However, the agreement must also explicitly state the repercussions of not upholding promises outside of these exceptions. This component protects both parties, spelling out both the compensation due in these circumstances and the method of requesting it.

Review and termination

Sections for review and termination outline how and when your contract and service-based agreement will be looked at and updated, if necessary. In addition, the agreement outlines the procedure for ending the contract. This part covers the mechanisms for both the natural end of a partnership and circumstances where early termination is proper. This component protects the interests of both parties.

What advantages do SLAs offer?

The following are some of the advantages of having this agreement.

Standard SLAs give security to buyers and suppliers equally

A service-based agreement describes the responsibilities that a company and its customers have to one another. It holds both parties accountable. If one party does not carry out these responsibilities, they may have to terminate the partnership and compensate the other party, as laid out in the agreement. This safeguards each party.

It is simple for companies to see their current status with regard to deliverables and for customers to get the services they require confidently.

Stipulates quality and performance measures

Agreements define specific metrics for evaluating service quality. When suppliers sign an agreement, they agree not to fall below these standards.

For example, a broadband provider usually guarantees a certain amount of bandwidth and near-immediate responses to emergency customer support requests.

Stipulates quality and performance measures
Setting SLA Metrics

Defines expectations

A service-based agreement defines clear expectations for customers, the company, and its support staff in quantifiable and reliable terms. Furthermore, it holds the company accountable for fulfilling the terms of its agreement. In this way, it prevents unpleasant surprises, since it lays out the dos and don’ts to both parties. Thus, it promotes transparency and a good business environment.

Sets performance goals

Internal agreements help your employees achieve high performance. For example, they set standards and quotas for your support agents based on metrics specific to their development and your goals. For example, you can set the monthly performance expectation of agents. This gives them specific targets and the ability to track how well they’re doing themselves, leaving no surprises in performance reviews. As a result, it keeps your agents focused on producing the best customer service.

Outlines solutions for non-performance

Under-performance from your support team can cause the loss of customers. For instance, if a ticket is not solved in a timely manner, a customer can be irritated enough to look for an alternative to your brand. While support software can keep the situation from getting this bad, a process still needs to be set up. It should evaluate why the agents overlooked the ticket and how to keep this from happening to other tickets. An external agreement determines the consequences to the company in case of any breaches. On the other hand, an internal one can clarify whose responsibility an oversight is and the consequences to specific teams or roles.

Steps to implementing SLAs for customer support

To implement a service-based SLA, you have to be organized and precise. The following are the most effective methods for implementing a customer service agreement for your support team:

1. Set realistic SLA terms

Examine how well you’re doing with your current agreements. Take stock of your resources and how they relate to the commercial goals of your firm. Afterward, set terms in new agreements that are in line with your commercial goals and current capabilities.

2. Create a draft

By creating draft SLAs, you can refine the terms with input from your internal team leads. Depending on your service or product, you may seek customer input for SLAs with specific companies. By doing this, you cut out unnecessary requirements and ensure everything necessary is covered.

3. Define the SLA terms plainly

SLAs define the terms under which you serve your customers and their obligations to your company. To guarantee that both parties meet these terms, you must adjust the language of the agreement to improve the understanding of both your customers and employees. Input from your legal department is necessary. However, you should write and summarize the terms in plain language.

4. Add reminders

To avoid overdue support tickets, you should use a reminder system. These reminders will notify your agents when their assigned tickets are approaching their SLA-mandated due dates. That way, the agent can either re-prioritize or request a new agent for urgent tasks.

4. Add reminders
Adding Reminders

For instance, you can add reminders for the following SLA metric targets:

  • First response
  • Updates
  • Resolution

For first responses, support software can automate sending acknowledgement emails, which helps your team save time.

5. Add escalation procedures

Escalation should happen when the due date for a ticket has passed. A customer service agreement specifies the procedure for when this occurs. With help desk software, this usually involves automated notifications sent to the assigned agent and that agent’s supervisor. They can update the customer and take action. By adding an escalation procedure in your level of agreement, you ensure tickets are not overlooked indefinitely. It also ensures customers are updated on progress.

5. Add escalation procedures
Adding Escalations

6. Monitor and update the SLA regularly

To avoid problems between your agents and your customers, you need to have a regular review and update of your agreement. How often this occurs should also be set in the customer service SLA. Sometimes what sounds good initially fails to work out in practice. You can check that both parties are getting what they require from the standard SLA and are able to meet those requirements. This helps you keep the business relationship functioning. Adjusting your service-based agreement to match the relationship’s reality increases both employee and customer satisfaction.

Conclusion

Every company needs to create smart SLAs to regulate quality and expectations. This is regardless of the type of product or service you provide and the number of end users with which you deal. When both your customers and employees are clear about what to expect and what is expected of them, everyone is more satisfied.

BoldDesk helps you to implement the best SLA metrics and methods. Contact the BoldDesk support team if you have any questions.

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