We collected every email and every tweet from the 2020 Democratic primary. Here's what we found...

What Is a Service-Level Agreement (SLA)?

Cristina Maria
Cristina Maria  |  September 12, 2019

Service providers have long struggled with the ever-changing rules of service level agreements.

Whether it’s field service companies like plumbing and heating, fire and security, or internet service providers and maintenance businesses, they’ve all had to deal with an SLA at one point or another. However, most of the confusion stems from a few questions which we’ll deal with in a second!

Service-level agreements (SLAs)

Keep on reading to find out more about what service-level agreements are, what you need to know about SLAs as a provider, the biggest challenges in SLAs, and the marketing opportunity you have with SLAs.

1. What is a service level agreement?

Before we go any further, let’s define what a service-level agreement is.

To illustrate this dry definition, an easy example would be to look around your own office building. You should be able to see a few smoke alarms, fire extinguishers, and emergency exit signs. If you don’t see these things, your facilities manager is in big trouble! Now, an alarm company has installed this security system at some point in the past.

Before starting work, they’ve most likely reviewed and signed a fire and security service-level agreement with the facilities management department, in addition to a contract of employment.

The SLA will describe how they’re under obligation to check the installation on a yearly or quarterly basis. In the case of a malfunction, it’s their responsibility to fix any issue in an agreed amount of time. 

2. What you need to know about SLAs as a provider

There is a simple reason why service level agreements are not included in a standard contract of employment for most service providers. Making changes to a contract that’s already been signed can be a costly affair. Not to mention time-consuming. A contract is designed to last for a year or more while SLAs are built to be revised on a regular basis depending on the type of service and the listed requirements. The contract can then refer simply to the agreed SLA and still be legally binding.

Everyone has a different idea about what good service looks like but an SLA makes the voice of the customer ring loud and clear: that’s the quality standard they expect. Despite the flexibility it affords both parties to negotiate rights and responsibilities, breaching a service level agreement has similar consequences to breaching a contract. This is why it’s vital that service providers pay just as much attention to keeping their SLA compliance up-to-date. 

3. The biggest challenge of an SLA

In one word? Scheduling. Sounds like a no-brainer. After all, what could be easier than setting up a few appointments in a Google calendar. Well, if you’re a service provider of any kind and particularly if you’re one in the field service industry, you’ll know how hectic things can get. More often than not, companies have to juggle multiple SLAs and deal with both proactive and reactive work.

Proactive (or preventive) work would be that installation inspection we mentioned in our first example, where the service provider knows they have to comply with a regular check-up. Reactive work is the emergency kind, where the provider needs to fit an appointment in their schedule within a certain timeframe.

Most SLAs have clauses that dictate ‘asset downtime’ meaning how long an asset can be nonfunctional. Imagine your IT provider didn’t comply with their service level agreement and did nothing to fix your internet security issue for a week or more. Same with a fire alarm system. The consequences of SLA breaches can be serious for both parties.

Scheduling SLA appointments used to be a challenging task, involving multiple calendars and spreadsheets but nowadays there are planned preventive maintenance software that can help fast-forward the task. 

Just make sure your digital tool has these features: 

Customization. Admins might want to use SLA features outside of contracts or even add additional criteria to appointments. It’s important to be able to set notifications according to necessity rather than being limited by the software.
Countdowns. SLA information should be easy to find and understand even in busy situations. A countdown showing how much time is left before the SLA is breached will help operation managers and office admins plan accordingly.
Reporting. Analytics are the bread and butter of any good manager these days, regardless of industry. Accurate SLA monitoring and history will help companies understand what works, what doesn’t and how to improve in the future.

4. The marketing opportunity in SLAs

Working under the assumption that the software you choose has the aforementioned features, there is a clear opportunity to improve one’s business reputation with the use of SLAs. It’s a great example of niche marketing that works. True success for a field service company or any other service provider resides with commercial contracts. These guarantee that your business will have a constant cash flow and won’t be subject to market fluctuations as much as a company dealing only with individual customers.

Everything sounds good enough but the truth of the matter is that commercial contracts don’t come easy. And they definitely don’t go to disorganized businesses. Service-level agreements are a given and they’ll come with tough consequences for any breach. 

For example, no commercial property can afford to go without electricity for any period of time without upsetting their own customers, employees, and run afoul of safety legislation. This means that commercial customers will look for tangible proof that your business can handle the pressure.

You can always use past service level agreements to further your brand. With the help of analytics, you can build reports to show that you have a 99% (maybe it’s even 100%!) uphold rate and demonstrate a successful track record. 

TIP: Make sure you promote the fact that you’re using the latest tools and software to demonstrate that you can keep up. And make sure that you monitor your software spend to maximize your overall profits and company success with a tool like G2 Track

Minimize software spend and maximize your business results now.  Get my G2  Track Account, FREE →

Office automation always has a nice ring to it when it comes to writing proposals. You’ll find that surprisingly few service providers of any kind can boast about transparency and guarantee that they have scheduling protocols in place beyond just a promise that they won’t be late. 

It’s key that you add reports based on your scheduling track record to the proposals you submit when you’re tendering for a big contract. Simply saying that you’ve successful upheld every SLA in the past won’t cover it.

You need to be exact and provide the prospective customers with hard data in a way that it’s easy to understand. They’ll be much more open to trust a business that can project this information in a professional manner and have proof to back it up than another provider who comes in with a handwritten stack of papers and the occasional coffee mug ring.

Takeaways

All in all, service level agreements are intimidating only when they’ve not been understood correctly. By following these few steps, you can use them to the advantage of your business and win bigger customers! 

Interested in learning adjacent information about compliance? See our extensive hub with over 30 incredible resources. 

Everything you need to stay compliant, FREE.    Get my 30 resources →

Cristina Maria
Author

Cristina Maria

Cristina Maria is a Marketing Executive at Commusoft, a job management software company, where she helps field service businesses discover the potential of digital solutions. A curious hybrid writer and marketer, you'll usually find Cristina doing what she loves most: using her work experience to produce engaging content for those looking to make the most out of their business strategies. An Asimov fan since childhood, she gets much too fired up whenever the topic of AI comes into discussion.