Service Level Agreement (SLA)
Service level agreements (SLAs) define expected standards of service, availability, responsiveness, reporting, uptime, or performance that vendors commit to delivering to customers. SLAs represent measurable benchmarks that make service promises tangible and binding.
They provide accountability to customers by specifying response times, resolution process, change control, reporting frequency, and even penalties for non-compliance. SLAs are common in technology and outsourcing contracts where performance is pivotal.
For sales teams, proposing comprehensive, yet attainable SLAs makes commitments concrete on key purchasing criteria. However, setting unrealistic SLAs risks poor service and penalties. Negotiating and implementing balanced SLAs protects the interests of both the customer and provider.