Do you remember your worst experience as a customer of a service? We're going to go ahead and say that (you won't let us lie) it was when a company said it would provide you with a solution and didn't. It must be one of the most frustrating situations, because the provider is the one who sets the expectations, and then doesn't deliver.
It must be one of the most frustrating situations, because the provider is the one who sets the expectations, and then fails to deliver. That's why it's essential to build an SLA, or service level agreement, in a clear, transparent and, especially, realistic way.
In this article we want to help you make yours with all these features, so that your commitment to your customers is real and responsible, and they are happy to count on you.
What is an SLA or service level agreement?
A service level agreement (or SLA) is a contract that establishes the responsibilities and obligations between a company and its customer. Among other things, it clearly defines the expectations to be met by both parties regarding the quality of the service provided.
Although it is a document that is commonly implemented with technology and service companies (such as telephone providers or technological maintenance of organizations) with third parties, an SLA can also be used with banks (when obtaining a credit card, for example), within a company (the human resources area could use one to establish the relationship with its staff), schools (with their students) and even an online retail store.
What is an SLA for?
An SLA is very useful because it allows you to put in writing, in a clear way, the responsibilities that both parties must fulfill for the relationship to be considered successful. It also helps to agree on actions to be taken when situations arise that are not ideal, but unavoidable. For example, there may be a delay in a delivery or the response time to a problem may be longer than stipulated.
This keeps the customer's expectations realistic and creates greater confidence in the level of quality of service they will receive. By putting it in writing, it increases the commitment of the company that will provide it: in the event of a problem, the customer will be able to demand compliance with the guidelines they have already signed.
And on the other hand, the company agrees to provide what is within its means, since when it promises benefits and compensation for the service it will provide, it does so based on what it has at its disposal: from the number of technicians and expert representatives to serve customers to its own or external infrastructure at its disposal with which it will comply with the level of service it establishes. In other words, with a well-written SLA and transparent clauses, the company also protects itself from misunderstandings or erroneous expectations.
As we have already mentioned, an SLA can be used in different areas. But to better understand its scope, there is a simple classification that explains the different types of agreements; we will mention them below.
3 types of SLA
1. Customer-based SLA
This is the one that considers the needs, characteristics and expectations of the particular customer with whom the agreement will be signed. This means that it must be prepared very carefully and that it will probably not be possible to replicate it with another customer, because they will not require the same specifications.
This SLA is useful for companies that are suppliers of raw materials. Even if they sell the same product to all their customers, the truth is that each one will require specialized attention, either because of delivery times, the frequency of orders or the conditions under which shipments must be sent.
2. Service-based SLA
This type of agreement could be seen as the opposite of the previous one, since it grants the same contract to all its customers, to whom it gives basically the same service. An example here could be a cellular company, which broadly offers two types of service: devices, phone lines and Internet for individuals and for businesses. It would therefore have two types of SLAs available with the same commitments for the individuals or companies that contract it.
3. Multi-level SLAs
When you combine customer-based and service-based agreements, then you have a multi-level SLA. It is perfect for use at the corporate level in all areas of a company. The purpose of this type of SLA is to describe what is expected from each party if there is more than one service provider and one end user.
This SLA avoids duplication or errors between several agreements. For example, the marketing area could implement a multilevel SLA for the work it does with sales, with customer service and with the systems area that handles its digital automation tools. This ensures that deliverables, information security and data protection are met, allowing the work of each department to mutually benefit each other.
Elements of a service level agreement
Description of services
This will list the services that are contracted and their characteristics. All aspects of each are included so that the client has a complete list of what he will receive from the provider without leaving any doubt or room for misunderstanding.
Responsibilities of each party
This section explains the commitments that are established for the supplier and for the customer, so it is important to be as explicit as possible. We talk about payment and collection dates, methods available to comply with this process, the type of attention that the supplier will give to its customer to solve problems or situations, guarantees and how to claim them, as well as the cases in which these responsibilities are excluded (such as natural disasters, for example).
Penalties in case of non-compliance of the parties involved.
It should be transparently mentioned what the supplier will do to compensate for failures, inefficiencies or errors in any of the processes of its service; likewise, what the client must comply with in case of misuse of the service or delay in payments. This, of course, will depend on the established conditions. Remember that the SLA serves, among other things, to protect the work of the provider and to give confidence to customers.
Performance metrics to measure compliance with the service level.
This aspect is also a sign of trust and a promise to deliver. The key performance indicators, or KPIs, that are chosen to demonstrate compliance with the service level that was originally stipulated are a reflection of the supplier's capabilities, and must be easy for the customer to consult and come from reliable sources.
Even if the metrics obtained with hard data say that the level of service is met, but customer satisfaction is in question, it is important to consider that actions will have to be taken to correct the errors that may not appear in a measurement tool, but in the perception of those who use the service.
Actions to be taken to resolve extraordinary situations
In the event of unforeseen events, what the company providing the service can and should do helps ensure that the customer's expectations are met. From legal responsibilities to the replacement of a product or the refund of the money paid by the customer are some of the clauses that should be included, always with the possibility of revising what is not in the SLA.
Finally, it is important to consider how flexible an SLA can be, since the customer's needs or circumstances may change over time, and it will then be necessary to adjust some of the agreements. This also makes it easier for the customer relationship to grow, evolve and be nurtured appropriately.
Now, every company and every customer is different. So, the SLA that best suits them will need some elements that may not work the same for someone different. With that in mind, we want to suggest you how to establish an efficient SLA, according to the situation of services you are about to offer.
How to establish an SLA
1. Identify the customer's needs
Whether your SLA is customer-based, service-based or multilevel, it is important that you know the type of problems that your service will solve. That way it will be much easier to define the offer you will give and set the real expectations that your customers understand and can decide if it is what they are looking for with complete transparency. Which brings us to the next point
2. Define the objectives to be achieved with the service.
Once you know exactly what you can offer your clients, you will also communicate the objectives that your clients will achieve with your service, as well as its scope and limitations. This is an aspect that should be clear from the beginning, so that no complaints arise as those occasions arise that show one of two things: that the client did not understand the SLA or that you did not know how to share the information clearly.
3. Establish the concepts to be used in the SLA.
In order to put your customers and your company on an equal footing, make sure that there is a common understanding of the concepts and terminology to be read in the SLA. It is not a good idea to assume that your customer is familiar with the vocabulary you use in your area, since it is possible that someone else in your organization has to manage some aspect of the service and may not fully understand what is stipulated there.
Try to put in writing an agreement that is easy to read, with no room for doubt. However, try to give the client time to get to know the agreement and to clarify any questions that may arise before signing it.
4. Explain the metrics that will measure the success of the service and how they will be delivered to the client.
The metrics that measure the quality of the service also work to keep your client aware that the level of service they agreed to is being delivered, and will also depend on the service they signed up for. For example, a company that provides Internet services in offices shares indicators such as upload and download speed, number of devices connected to the network, modems in operation, among others, so that their customers are aware of the performance, and all this can be consulted on a page dedicated to the account of each person or company that has a contract with them.
5. Offers opportunities for dialogue and maintenance
By this we mean that, if you think it is convenient, in the SLA you can establish the periodicity of visits or review of the service to ensure that everything works and is in order. During these sessions you can even request that you receive a form with a brief evaluation of the service during the last months, even if no incidents or problems have been reported to you during that time.
With this you confirm that everything is working well and you have it in writing. On the other hand, your client corroborates that you are attentive to their needs.
6. Share security and data protection policies.
If you must register users, permissions, roles and access for the service you provide, it is important that you guarantee that the information will be managed responsibly and only for processes that you will explain to your client.
Of course, if there are risks of someone external knowing sensitive aspects of your service through the keys that your customers have, also put it in writing in the SLA so that security is taken care of from both sides.
7. Mention the available channels for customer service
Remember to include a list with phone numbers, emails, official profiles on social networks and updated web addresses so that your customer knows where to contact if they want to solve something before their review date or because of a sudden problem. Try to indicate where to go for specific situations, so they won't waste time calling the sales line when they just want to follow up on a repair.
Want to know what a real SLA looks like? Check out these examples:
3 examples of real SLAs
1. SLA from the National Cybersecurity Institute
This example is quite useful because it contains sections that can be used for different industries and is easy to read. It even indicates in yellow the sections that need to be adapted, such as names, response times and penalties, for quick location and replacement.
Image of the National Institute of Cybersecurity
2. Servytec's SLA
Its service level agreement is quite complete. First it explains what is related to the service in general and then to the one it has per product; it clarifies from the beginning that the same SLA is used for all its customers. This helps to avoid confusion and to have one document available, with no surprises.
Throughout the agreement it is clearly stated what the company will do in case it cannot comply with the service level, as well as the contact channels to which the customer needs to resort to make valid those compensations or to follow up on their reports for damages or malfunctions in the operation of the service.
Servytec Image
3. European Agency for Safety and Health at Work SLA
This service agreement is also interesting because it was published when the call for tender was launched. In other words, the SLA could be known before knowing who would work with the agency as a cell phone company, which made it possible to know what it was looking for in the possible chosen one.
The document, which is less than 10 pages long, contains a table of contents that breaks down all the sections it covers, from service management and reporting to penalties. This level of transparency is always appreciated.
Image from the European Agency for Safety and Health at Work.
Before closing, don't forget that an SLA should be a record of what your company can and should do for its customers. So take a good look at what you need to comply with it, from the structure of your organization to the infrastructure you need to invest in.