What is an SLA?

A Service Level Agreement (SLA) is a contract between an end-user and company that outlines minimum expected service requirements, including quality, availability, and timeliness. They are used to set expectations and keep companies accountable for delivering on their promises. For instance, guaranteeing an uptime of 99.7% for a product is an example of an SLA for Software-as-a-Service (SaaS) providers.

SLAs are important because they,

Customer support SLAs are often used to ensure timely support to customers by setting deadlines across different types of inquiries and customer segments. 

What is an SLA in customer service?

SLAs in customer support service are time-based deadlines agreed upon by the customer and outlined in contracts or in the terms of service. They define the specific amount of time the company has to respond and resolve different types of incoming inquiries from customers. A customer support SLA clearly defines the response and resolution timeframe, along with the channels on which a service provider extends support services.

 

The document includes details about how a customer can log a support request, how support tickets are classified according to their severity, the corresponding target response times, and exceptions to the agreement. Giving these details in your customer support SLA document assures your customers of the quality and type of support expected from your business.  

Here's an example of an SLA for customer support.

 

Example of SLAs in customer service Example of SLAs in customer service

Example of SLAs for customer service

Types of SLAs

There are three main types of SLA.

1. Customer-based SLA

This is the service level agreement between your company and an individual customer or specific group of customers. The conditions in the SLA are strictly only for the particular customer involved in the agreement and could differ for different customers and segments.

2. Service-based SLA 

The SLA here is pinned on the service provided by your business to all customers. For instance, the minimum percentage of internet availability assured by an Internet Service Provider (ISP) to all customers is a service-based SLA type.

3. Multiple SLAs

Setting up multiple SLA policies becomes more important to keep different types of customers satisfied. Multiple SLA policies can help teams prioritize incoming inquiries. You could define the agreement across time zones and regions depending on your agents’ availability or where your customers are located, set multilevel SLAs to handle VIP or premium customers, or even prioritize issues with stricter SLA policies to ensure that agents are dealing with incoming inquiries in the right order.

OLA vs SLA

An OLA (Operational Level Agreement) is the agreement between functional groups or teams within an organization. This agreement supports the delivery of the overall SLA to the customer. For example, if an organization offers a 24-hour resolution SLA to their customers, the functional groups might have several OLAs to ensure that can happen including a 4-hour triage OLA by engineering and an 8-hour resolution time by system administrators. Delivering on SLAs requires collaboration across internal teams and OLAs can help maintain accountability through the process.

What are the key components of a customer support SLA?

Any customer support SLA can have a combination of the following key elements.

1. Details of the parties entering into the contract: The name and location of the service provider and the customer or prospect between whom the agreement is signed.

2. List of offered services or features: Note down the core features and services that are bound by the terms and conditions of the agreement.

3. Committed service standards: Describe the guaranteed service quality you’re promising your customers, including service availability or uptime percentage, permitted downtime, and maintenance time.

4. Support type and channels of contact: While framing a service agreement, it’s important to mention what kind of support your customers can expect from you when they face issues with the services you provide. Would it be 24/5 or 24/7 support? If you have more than one type of support service, for instance - different SLAs for free or premium accounts, state explicitly which support mechanism the customer has opted for. You can also call out the different support channels such as email, phone, or chat on which you’ll be available for your customers, along with the contact information. 

5. Target timeframes for support: Timeliness is a crucial element of outlining SLA in customer service, which is why it’s vital to mention the targets for the SLA metrics. Note that SLA metrics act as a response target for customers and differ from key performance indicators (KPIs) that measure your team’s performance and goals. 

6. Compensation or penalty if committed standards are not met: Though businesses strive to keep the committed service quality, there may be instances where they can’t meet the guaranteed unexpected situations. The SLA should clearly state how a service provider compensates for the miss in such circumstances. Giving service credits to customers according to the level of upset in the quality is one of the ways to pay for the penalty.

7. Exclusions in the SLA: This section should describe the events and conditions in which the clauses mentioned in the service level agreement become null and void. For example, service quality could be exempted in the event of unforeseeable natural traumas that are beyond business control or when a customer fails to adhere to recommended configurations.

 

Commonly used customer support SLA metrics

- First response time: The time to give the first reply is an important SLA metric because it serves as an acknowledgment of the customer inquiry. Once customers know that an agent is looking into the problem, they are less likely to be frustrated while waiting for a resolution.

- Average response time: The time between subsequent responses is the response SLA which ensures that customers aren’t left waiting for a reply or an update. 

- Resolution time: It’s the time taken to resolve an issue completely. Resolution SLAs ensure that the customer is actually getting their issue resolved with quality responses and action, and not just getting quick responses.

7 Customer support SLA best practices

Determining the right amount of time to commit to for SLAs is a balancing act. As much as we might want to promise instant responses, it’s not a practical promise to make to customers. If we over-promise on response times and don’t deliver, customers will be disappointed and there might be serious contractual consequences such as fines, usage credits, or early contract termination.

On the other hand, SLAs should help the customer feel assured that they will get timely responses if and when they need assistance. Set the goal post too far away and customers will be disappointed with slow responses. Instead, find a balance between over-promising but still meeting the needs of customers - often by personalizing SLA policies by customer segment. Here are six things to think about when designing your SLA team policies. 

Here are 7 best practices that you can adhere to when designing your SLA policies.

1. Set your internal SLA targets below external SLAs

SLAs are promises you make to your customers. If you’re a smaller company that doesn’t offer contracts or legally binding SLAs, your SLAs might be similar to the internal goals your customer support team sets for response and resolution times.

However, if you’ve outlined your SLAs in your terms of service or in a legal contract, there are serious repercussions for breaches. Your customer support team's goals shouldn’t be to meet the bare minimum level of service. In this case, you’d want to set your internal team benchmarks more ambitiously than simply avoiding SLA breaches.

Plus, setting your external SLAs the same as your internal goals don’t give you much room for error. Ideally, you should aim to resolve inquiries well within SLAs. SLAs should be the longest acceptable time for a customer to wait, but they shouldn’t be your measurement for quality.

The best practice is to set your customer support team response and resolution goals well below your SLAs so that you’re consistently working to exceed customer expectations.

2. Understand customer needs and segments well

When determining your SLA policy, it’s important to consider if all customers fall into the same bucket, or if some customers require unique policies. Understanding your customers’ needs based on their plan type or contract requirements and setting up different SLAs can help provide more personalized experiences.

Two ways you can segment customer groups are:

3. Categorize common support problems

While every customer concern is important, not all of them are equally urgent. By categorizing common support problems by priority and setting separate SLAs for each type of question, your team can better prioritize the needs of your customers. For example, an outage SLA time might be a lot shorter than a request to update a billing address. Using multiple SLA policies allows your team to get as granular as you’d like to serve each type of customer uniquely.

4. Listen and incorporate customer feedback in your support SLAs

When setting SLA policies, take customer feedback into account. If customers complain about slow responses or leave negative customer satisfaction responses, it’s time to revisit your SLAs to ensure you’re meeting the needs of all your customers.

Understanding why customers need specific response times is important too. Critical software or products like banking apps or point-of-sale systems might require faster SLAs because any wait time will seem unbearable. Other products, like e-commerce or entertainment apps, might not require as quick of responses - meaning that you can dedicate resources to other priorities.

5. Optimize your staffing levels to meet SLAs

It might be tempting to optimize SLA policies based on agent availability - but this is the wrong approach to take. Instead, base your SLA policies on the customer experience as a first priority and then staff your team to meet those requirements. If you can’t meet your customer’s expectations and are experiencing SLA breaches, you’ll need to hire more agents to handle incoming inquiries.

6. Define OLA to support SLAs

Operational Level Agreements are critical to consistently meeting SLAs when there are internal dependencies to resolve an inquiry. As mentioned above, OLAs are agreements between internal teams that help prevent bottlenecks. When an SLA isn’t met, customers don’t care who’s fault it is - engineering, support, or system administrators - they only care that their agreement wasn’t honored. OLAs help teams work together to meet their commitments to the customer.

7. Frame SLA policies considering business hours and calendar hours

If you don’t offer support 24 hours a day, 7 days a week, it’s possible to set SLAs that only take into account your operating hours. For example, if you have a 24 hour Response Time SLA, but only have agents working during the weekdays, customers who send in an email Friday afternoon shouldn’t expect a response until Monday. Setting your SLAs to Business Hours instead of Calendar Hours will only keep the timer running while agents are scheduled to be working.

However, while using business hours might make your reporting look better, customers are still waiting over the entire weekend (or night) for a response. They might not care that you don’t have agents working - they only know that they aren’t getting help. If you choose to only report on business hour SLAs, it’s still important to keep in mind the customer experience for customers that live in different time zones or are trying to contact you after-hours.

How do help desks enable you to manage SLAs in customer service?

Once you’ve decided what your SLAs are and communicated them to customers, it’s critical to manage your time and track them correctly to make sure your team consistently meets their deadlines. Managing SLAs manually is almost impossible as it would require watching the clock on every customer contact at all times. It’s a much better plan to hand over the reins to a help desk software to track, prioritize, automate and report on SLAs.

Here’s how a help desk can help your team stay on top of your SLA obligations for a better customer experience.

SLA monitoring and tracking

When you’ve set up SLA policies in Freshdesk, every incoming customer inquiry is assigned an SLA based on the customer type, product issue, or whatever criteria you’ve developed. When tickets await an agent's reply, the help desk keeps track of passing time automatically. You can also view and act on imminent SLA breaches directly from your inbox, pause SLA counters when you’re waiting on a customer by using ticket statuses, and display elapsed time and display as per each ticket’s SLA policy.

SLA monitoring and tracking in help desk SLA monitoring and tracking in help desk

Prioritization of customer issues

Agents have a lot to think about when supporting customers. Which ticket they work on next shouldn’t be their biggest decision. When you use a help desk to manage SLAs, support tickets are automatically routed to the best person and can be prioritized by how close they are to breaching their SLA - whether the reply SLA or resolution SLA. You can go beyond the First in, First Out principles and prioritize support tickets by the issue's urgency or the channel type and not just their place in line.

Define different customer service SLA policies according to issue priority Define different customer service SLA policies according to issue priority

SLA-based reminders and notifications

For agents that aren’t only responsible for working through the inbox, it’s easy to lose track of time and accidentally let a ticket breach an SLA deadline. It might be hard for them to notice every customer reply or know when a new ticket comes in. This is where setting up SLA reminders can help. Help desks can also automatically email team members to alert when a ticket is about to breach an SLA. That way, someone can divert from their current task and jump in to make sure the customer gets the answer they need. Think of it as a little nudge in the right direction from your friendly help desk.

Set SLA reminders and notifications on the help desk Set SLA reminders and notifications on the help desk

Escalation management

When a ticket has breached its SLA, action is required immediately. A help desk can automatically escalate tickets and notify leads and managers of SLA breaches. The helpdesk software can also assign them to a superior for follow-up and investigation into what happened. If that escalation doesn’t resolve the issue, you can create an escalation path to move the issue up the management hierarchy for issue resolution.

SLA escalations monitored on helpdesk software SLA escalations monitored on helpdesk software

SLA reporting

Understanding how often and when your team is missing SLA deadlines is critical to improving your customer experience. Use your help desk’s reporting feature to dive into breaches, uncover the reasons and trends behind them, and identify where gaps need to be closed. For example, if most SLA breaches happen on Monday morning, it might be time to look into weekend support or increase the number of agents available on a Monday. Some enterprise contracts will also require reports on SLA breaches as part of their contract, so ensure that your help desk can pull client-specific SLA reports as well.

Customer support SLA-based reporting Customer support SLA-based reporting

How to manage an SLA breach

Even if you’ve taken steps to ensure your team is consistently meeting SLAs, a breach is inevitable. Things happen, tasks get dropped or roadblocked, and all of a sudden you’re looking at an overdue reply to a customer. But the good news is that, as long as you aren’t consistently breaching SLAs, customers care more about how a breach is handled than the actual breach. Here are four strategies to manage SLA breaches and keep customers on your side the whole way through.

Keep the customer informed

Bad news delivered now is better than bad news much delayed. As soon as you foresee an SLA breach coming your way, it’s time to get in touch with the customer to let them know. When communicating an expected SLA breach, be as transparent as possible. Let the customer know what happened, what the next steps are, and apologize for not meeting your obligations. As the issue progresses, be proactive with updates and keep on top of other potential SLA breaches.

Revisit your reminders and escalation set-up

Use automation and escalations to ensure SLA breaches are dealt with quickly and effectively. Ensure that reminders are sent to the right person with the ability to act on them, and that they are sent soon enough to be helpful. Double-check that escalation paths involve the right people and progress up the management chain as SLA breaches occur.

Involve legal team with contracts

If you work with customers that have SLAs outlined in their contracts, get in touch with your legal team as soon as possible before promising anything to the customer. They will have specific requirements for reporting breaches and will help with managing customer expectations in order to reduce potential penalties.

Escalations can also help with notifying legal teams proactively and automatically to keep everyone in the loop on missed SLA deadlines.

Review processes to ensure it doesn’t happen again

If you’re seeing frequent SLA breaches, you’ll need to dig in and do a post mortem on why it happened. Is it because your team is overwhelmed? Do you need to put in OLAs to prevent internal bottlenecks from getting in the way? Understanding why SLA breaches occur is critical to continually improving your customer experience.

Manage customer support SLAs effectively with Freshdesk

A help desk makes it much easier for your team to handle SLA workflows by automating time tracking, prioritizing incoming customer inquiries, and reminding agents of upcoming deadlines. Freshdesk offers advanced SLA management features like defining multiple SLA policies, setting up business hours or calendar hours, and SLA adherence reports that provide a positive customer experience.