Making the most of service level agreements involves human and technological resources. Information technology (IT) is a field in constant evolution, where assessments, reviews and audits continue on a daily basis to improve products and service. In current times, sometimes customer service is the only thing that sets your organization apart.

Train your employees to seek customer satisfaction with an eye on cost-to-service ratio, then use developing technology to track performance against existing service level agreements. If you want to improve your service level agreement skills, review the following information:

1. Creativity and flexibility are necessary for an SLA manager.

2. Service level agreement software and tool kits ease development fears.

3. Service level agreements are dynamic documents.

Action Steps
The best contacts and resources to help you get it done

Choose an SLA manager

An SLA manager is a major component in creating and managing service level agreements (SLA). This multifaceted position requires skills ranging from sales, education, negotiation, communication, facilitation, conflict management and psychology to organizational knowledge, respect for others, win-win concepts and SLA experience. SLA manager responsibilities include (but are not limited to) point of contact for difficulties, conflict resolution, change processes, effectiveness assessments, service reviews, growth opportunities, delegating and training.

I recommend: The SAS Institute provides access to an article that details the role of an SLA manager. For a computerized approach to SLA management, see Enterprises for options.

Examine the wide array of SLA software and tool kits available

With training and knowledge, creating and managing SLA documents is manageable and brings growth to your organization. For a sample service level agreement form, audit/review questionnaires, training and more, check out the tool kits available. They ease intimidation factors of developing SLAs. Also take advantage of SLA management services, software and templates to build a service level agreement that satisfies provider and client.

I recommend: QMS software provides a toolkit that promises to manage service contracts, performance evaluations, escalation and more - plus they offer a free 30-day trial. The SLA Guide provides service level agreements, sample templates and more; it walks you through an agreement clause by clause, so take a look at the resources available for do-it-yourself tools.

See change as improvement when updating a SLA contract

Service level agreements and commitments develop from current trends and situations, so SLA documents are dynamic and need periodic reviews for updating. Use service level management when SLAs require change due to environmental shifts, changing client needs or expectations, workload changes or improvements in measurement tools and processes.

I recommend: For in-depth information about the living document (SLA), see Karten Associates. Microsoft provides detailed stages for reviewing an SLA.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Once you receive customer and performance tracking feedback, review the results with a focus on turning weaknesses into strengths. This is a benefit of having an SLA.

In many types of business, service is the key that unlocks profit. Depending on the type of product you sell, offering a service contract extends the value you offer your customers. And profit margins for service are often much higher than are those for product sales.

A few things to remember when selling service contracts:

1. Sell them as job security for your customers. If you're selling a product to a business, especially a high-priced one such as a piece of office equipment or a telecom system, the last thing your customer needs is to have it break down and not be covered by a service contract. If you can persuade the customer to think of the contract as job security, you are doing well for the customer — and yourself.
2. Build the service contract into the sales process before discussing the customer's budget. If you wait until after you agree on a price, it will be that much more unpalatable to him or her to add to the cost. Emphasize the contract's benefits, not just its features.
3. To make the contract's cost easier to swallow, refer to cost per month rather than cost per year. Of course, anyone can quickly figure out the annual fee, but this small touch will get you that much closer to inking the service deal.

Action Steps
The best contacts and resources to help you get it done

Work from samples

A plethora of Web sites offer sample service contracts for you to work from — some for free, some for a fee.

I recommend: You can see dozens of sample services contracts from many different industries at Oncle.com. AllBusiness.com's sample contracts run about $25 each.

Make your service contracts proactive

Customers are more likely to buy service contracts that entitle them to proactive service visits rather than just maintenance in the event of equipment breakdown.

I recommend: Kayye Consulting outlines a 'proactive service contract' theory.

Let the technicians do the selling

If you employ field service maintenance and repair people, it may make sense to them sell service contracts. Customers are likely to view service techs as trusted contacts. When an existing service contract is about to run out, the field service person can bring up options for extending and even expanding the agreement.

I recommend: Teach your field force the basics of 'cross-selling' using TechTarget's tips and 'up-selling' with strategies from Business Know-How.

Be aware of the bad blood

Extended warranties have gotten a bad rep in recent years because of scams in industries such as home appliances and car sales. Hit the negatives head-on and differentiate your offering from the infamous ones.

I recommend: ConsumerAffairs.com provides a list of five reasons consumers object to buying extended warranties. The Federal Trade Commission cautions consumers to examine service contracts and make sure they spell out what the contract covers, whether a service contract offers more than a warranty, the length of time the contract is in force, and whether the product generally needs repairs (a repair-free contract won't need much service).

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Make sure your service contracts clearly spell out your responsibilities and also those of the client.
• •  In certain industries — information technology, for example — customers now demand Service Level Agreements (SLAs). These contracts demand accountability on the part of the provider (for instance, a percentage of uptime for computer networks) and come with penalties for not meeting responsibilities, and sometimes come with benefits for meeting or beating levels of service and/or deadlines. Offering an SLA can add to your credibility and help you close a large sale.
• •  If a service contract is to last for a significant length of time — more than a year, for instance — detail future pricing adjustments and when they will occur.
• •  Many consumers are likely to start the dialogue thinking a service contract is a waste of money. You'll need to combat that attitude from the get-go.

A service level agreement (SLA) is a formal agreement negotiated between a network service provider and client for product service. It outlines the relationship between provider and client using open communication to understand each other’s needs, complexities and expectations. It should include how to perform future service delivery, performance-tracking techniques, performance reports, managing problems and conflicts, legal compliance, security and termination.

SLAs are a dynamic tool which protects the provider and client with solid evidence of honoring the service level agreement. If needed, use SLA management services or SLA software to assist with tracking and documenting performance. To understand service level agreements basics, consider the following information:

1. Have a general understanding of issues addressed in a SLA.

2. Examine the process steps used to develop a SLA.

3. Determine whether you want to pursue a SLA for your organization.

Action Steps
The best contacts and resources to help you get it done

Know the two core elements of an SLA

Two necessary categories to include in your SLA are service and management. Service elements describe the context of service, service standards, conditions of service delivery and party responsibilities. The service level management element tracks and reports service effectiveness, provides a report review, navigates the change process and resolves disagreements.

I recommend: In an excerpt from her book, Naomi Karten lists and explains the two core elements with details. For more information about the elements in an SLA, see Enhance Systems.

Get an overview of the SLA writing process

In order for a SLA to be an agreement, it must be a joint process between provider and client. They must openly communicate and discuss their definitions of the agreement, establish ground rules for working together, and create a structure for the SLA document. Once an outline for the structure is in place, there is a rough draft to edit, and a final agreement emerges.

I recommend: Bizbodz.com provides an overview of the SLA writing process, and Duke University offers an overview with models and templates for SLAs.

Review business basics before deciding to develop an SLA

Carefully review the reasons you are considering an SLA. If you are trying to avoid client complaints, take steps to identify the client's issues. Gain clarity through problem-solving. Then, make sure the basic roles and responsibilities within your organization are clear - remove any ambiguities, gaps or overlaps. If there are still immediate issues, consider an SLA to define your role as provider and expectations of employees.

I recommend: Network World shows two sample service level agreements as examples of a standard SLA and an effective SLA. CXO Media provides questions and answers to critical information.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  An SLA does not include guarantees; service contracts are an insurance policy that provides compensation in the event of a mishap.