What does Service Level Agreement (SLA) Mean in Tech Sales?

You've probably heard of a Service Level Agreement or SLA, but you might not know exactly what it is or what it entails. We're here to help explain!

In short, an SLA is a contract between a service provider and their customer. The agreement spells out the terms of service and specific obligations each party has to uphold. It also measures performance and sets out remedies if those expectations aren't met.

If you’re selling web hosting services, for example, your SLA might contain details about possible downtime that the customer's website may experience.

It's important to have an SLA in place so that both parties know what's expected of them! This can help you avoid any misunderstandings down the road.

Plus, it can give you an edge if your SLAs are more favorable to customers than your competitors' are!

Why do you need an SLA?

To put it simply, an SLA provides structure and safeguards for both the customer and the provider.

By having all expectations set out from the beginning, there's much less room for error. This means both parties are more likely to be satisfied with the end result!

• For customers: SLAs help protect against service and system failures that can result in lost revenue, decreased productivity, and reputation impact. Even if disruptions are short-lived, they can still be costly!
• For providers: SLAs streamline processes by defining what happens when things go wrong. You’ll have a plan in place that you can implement quickly to resolve issues and a process for dealing with disputes and disagreements.

In other words, an SLA can give your customers peace of mind – while saving you time, money, and headache down the road!

What’s inside an SLA?

There's no one-size-fits-all answer when it comes to creating an SLA. Every business is different - meaning every agreement will look different as well. However, there are some key elements that every effective SLA should have:

• A description of services being provided: Document the specific features and functionalities that the customer will receive from you.
• Service level targets/expectations: Define the levels of performance and service your customer can expect, and how you will measure and report on performance standards. This can include:
  • Service availability (uptime and downtime)
  • Defect rates
  • Technical quality
  • Security
• Roles & responsibilities of both parties: Outline the people, processes, and timelines involved on both sides for reporting an issue and ensuring its resolution.
• Exclusions: Spell out any circumstances where the SLA will not apply, like if a major weather event knocks out service.
• Penalties and remedies: Describe what happens if one party fails to meet its obligations, and how it will issue compensation or termination.
• Updates and changes: Provide a way for both parties to review and negotiate future changes to the services you offer.

Of course, this is just a starting point - your specific agreement will likely contain other clauses and language as well.

The important thing is that all your bases are covered and everyone involved knows what to expect from the arrangement.

There’s More to Tech Sales Than SLAs!

All in all, a Service Level Agreement or SLA is a necessary part of doing business - especially if you're in tech sales.

By taking the time to create a well-crafted agreement, you can safeguard your business (and your customers) against potential problems down the road.

And if you’re looking at a job in tech sales, it’s an important term to know! That’s why, at Uvaro, we go beyond the TLAs (three-letter acronyms) – we don’t just tell you what the most important sales terms mean. We show you how they fit into your day-to-day job as a sales rep in tech sales!

Ready to explore what Career Success might look like in tech sales? Start with our Career Success Catalog… and get excited about learning something new!