What does Service level agreement mean in marketing terminology?

Service level agreement

A service level agreement (SLA) is a written agreement between two parties – typically a service provider and customer – that outlines the level of service expected from the service provider and how service performance will be measured. Generally, SLAs are legally binding contracts that set out the details of the specific services to be provided, including performance standards, warranties, service availability and recovery, responsibility for problem resolution, and the parties' compensation for the service.

The primary purpose of an SLA is to ensure that a service provider will deliver the services that have been requested and agreed upon. In this way, an SLA acts as a contract between the service provider and the customer, covering the service to be provided, the customer's expectations and the service provider's responsibilities.

SLAs also provide a means of measuring and monitoring performance, enabling service providers and customers to measure service quality and identify areas in need of improvement. This helps to ensure that the quality of the service provided meets the agreed-upon standard.

When writing or negotiating an SLA, it's important to identify all the activities that need to be included and that they correspond to the expectations and requirements of both parties. Negotiation should focus on objectives of the agreement and should ensure that both parties understand which services will be provided and when.

SLAs normally include a set of service levels that define the level of service to be delivered, as well as specific clauses and conditions. There are three basic sections to an SLA:

1. The service description

The service description outlines the services that will be provided, such as software installation, hardware repairs, or data backups. It should also include a detailed description of the services to be provided, their associated costs, and the customer's expectations.

2. Service agreements

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Service agreements define the customer's and the service provider's roles and responsibilities. They should include details regarding the services to be provided and any associated guarantees or warranties.

3. Service performance measurements

Service performance measurements outline what quality of service is expected, how it will be measured, and any customer service criteria. This section should include specific details such as the turnaround time for service requests and resolution, the types of service requests, and the time frames for each.

When creating an SLA, it's essential to understand the customer's needs and expectations. Service goals and objectives should be established and the service provider's responsibilities should be clearly defined.

When negotiating an SLA, it's important to ensure that every aspect of the agreement is clear and unambiguous. If any changes are required, they should be negotiated before the SLA is signed. Once the agreement is reached, it should be recorded in writing, preferably in an SLA document.

When all parties are in agreement on the SLA, it should be signed and dated. This is the final step in ensuring that all parties understand the terms of the agreement, and that the expectations of both parties are met.

A successful SLA should be regularly reviewed to ensure that all service objectives are met. It should also be revised on a regular basis to reflect any changes in customer needs or service provider capabilities.