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October 24, 2012

Good SLAs Are Key to Happy Customers

By David Delony, Contributing Writer

The key to making customers happy in any business is to establish with customers beforehand what they’re actually getting. In telecommunication, this takes the form of a service level agreement (SLA).

Having a good SLA in place before providing customers is a good way to avoid headaches like the Amazon Web Services (News - Alert) outage that crippled popular websites like Reddit for both parties in the future, according to an article in ITInews.

“Complaints occur when there is an expectation gap," said Richard Rattue, managing director of Compli-Serve, a South African company that provides compliance support and other services to the financial industry.

Image via Shutterstock

 The SLA defines what both the provider and the customer can expect, and is essentially a binding contract between the two parties.

“An SLA incorporates clearly defined undertakings and deliverables thus reducing the chances of disappointing a client,” Rattue said.

A good SLA includes information such as what the provider is actually providing, how it will provide it, for how much and by what criteria it will be measured. It also defines limits on what the customer can actually expect from the provider. In addition, the SLA defines what happens if the provider doesn’t meet the standards of the agreement, and how the terms of the agreement can change over time.

A provider should be realistic about the level of service it can actually provide when offering an agreement to a potential customer.

“An SLA can't be created in a vacuum and must be designed with the available infrastructure and resources in mind,” Rattue said.

Both the customer’s needs and the provider’s capabilities change over time, and the SLA should be periodically renewed.

Rattue said it should be done every six months.

It’s also a good idea for providers to segment their offerings, charging different prices for different levels of service. There are plenty of customers who place a premium on throughput and reliability and price is no object to them.

In turn, this means more money for the provider.

“As an SLA links the client requirements to infrastructure requirements, it creates the ability to link service levels to service cost, and as a result profitable pricing can be set," Rattue said.

Edited by Braden Becker
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