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What Terms Should You Include in Customer-Facing SLAs?

Service Level Agreements (SLAs) are critical documents that define the expectations and responsibilities between a service provider and its customers. When crafting customer-facing SLAs, it's essential to strike a balance between protecting your organization's interests and meeting the needs of your clients. Here are some key terms you should consider including in your customer-facing SLAs:

Service Scope and Definitions

Clearly define the services covered by the SLA, including any exclusions or limitations. This section should also provide precise definitions of key terms used throughout the agreement to avoid ambiguity. For example, you might define what constitutes an "incident," "response time," or "resolution time." can help ensure you cover all necessary definitions.

Service Availability and Uptime Guarantees

Specify the expected service availability and uptime targets, typically expressed as a percentage. For example, you might guarantee 99.9% uptime or commit to no more than a certain number of hours of downtime per month or year. Be realistic in your commitments and consider including exclusions for scheduled maintenance or events beyond your control.

Response and Resolution Times

Define the timeframes within which you will respond to and resolve customer incidents or requests. These timeframes may vary based on the severity or priority level of the issue. For instance, you might commit to acknowledging high-priority incidents within 30 minutes and resolving them within four hours. suggest including specific metrics and targets for response and resolution times.

Service Credits or Penalties

Outline the compensation or service credits customers will receive if you fail to meet the agreed-upon service levels. This section should clearly specify the conditions under which credits will be issued and the calculation method. Be sure to cap the maximum credits to a reasonable percentage of the customer's fees to protect your organization's financial interests.

Monitoring and Reporting

Describe how you will monitor and report on service performance, including the metrics you will track and the frequency of reporting. This transparency helps build trust with your customers and demonstrates your commitment to meeting the agreed-upon service levels.

Termination and Renewal Clauses

Specify the conditions under which either party can terminate the agreement, as well as the process for renewing or extending the SLA. This section should also address any fees or penalties associated with early termination.

Limitations of Liability

Include a clause that limits your organization's liability in the event of a breach or failure to meet the agreed-upon service levels. This can help protect your business from excessive financial exposure.

Dispute Resolution Process

Outline the process for resolving disputes that may arise regarding the interpretation or implementation of the SLA. This could involve escalation procedures, mediation, or binding arbitration.

By including these key terms in your customer-facing SLAs, you can set clear expectations, protect your organization's interests, and foster trust and transparency with your clients. Remember to review and update your SLAs regularly to ensure they remain relevant and aligned with your evolving service offerings and business objectives.

What's a reasonable uptime guarantee?

A reasonable uptime guarantee depends on the service and industry. For non-critical services, 99% uptime (around 3.5 days of downtime per year) is common. For critical services like healthcare or finance, 99.9% (around 9 hours per year) or even higher like may be expected. However, higher guarantees come with higher costs. Consult industry standards like and balance customer expectations with operational realities.

Should you offer service credits?

Service credits can be a valuable addition to customer-facing SLAs, but they should be approached thoughtfully. They demonstrate your commitment to upholding service levels and provide recourse for customers when targets are missed. However, service credits should be carefully scoped to avoid excessive payouts that could undermine your business. Consult guidance from the on structuring reasonable service credit policies. Ultimately, service credits can strengthen customer relationships when implemented judiciously as part of a comprehensive SLA.

How should you define response time?

Response time is a critical SLA metric that sets customer expectations for how quickly you'll acknowledge and start working on their issue. It should be defined as the time between when an incident is reported and when a qualified technician begins investigating the issue. Aim for a reasonable yet ambitious target, like 30-60 minutes for high-priority incidents during business hours. recommends aligning this with your team's true capabilities to avoid constant breaches. The also stresses clear, quantifiable definitions.

Do SLAs need customer sign-off?

While customer sign-off is not legally required for SLAs, it's considered a best practice. Having customers review and approve the SLA terms helps ensure alignment on expectations and prevents misunderstandings. It also demonstrates your commitment to transparency and building trust with customers. For more comprehensive SLA guidance, refer to or the .

How often should you review SLAs?

SLAs should be reviewed on a regular cadence, typically annually or semi-annually. This allows you to assess if the agreed service levels are still aligned with business needs and customer expectations. During the review, analyze SLA performance data, gather feedback from stakeholders, and identify areas for improvement or renegotiation. It's also prudent to review SLAs when there are significant changes to services, processes, or organizational structures that may impact service delivery. Keeping SLAs up-to-date ensures transparency, accountability, and a shared understanding between the service provider and customers. For guidance, refer to or the .

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