A Service Level Agreement sounds too dreary in a small business context, but having it makes a world of difference in your delivery. It is used not only for an agreement and understanding with your customers. It is also used so that your employees have clarity on what to deliver, how much to deliver and by what time!
This article is a continuation or Part 2 of the previously published article Creating SLAs for Small Business Success: A Practical Guide.
Core SLA Metrics and Targets
You don’t need 30 metrics. Start with a small, focused set that truly matters.
Essential SLA Metrics
- Response time
- Time from customer raising an issue to your first meaningful reply.
- Resolution time
- Time from ticket creation to resolution or agreed workaround.
- First Contact Resolution (FCR)
- % of issues resolved in the first interaction.
- Uptime / availability (for SaaS / online services)
- % of time your service is available over a period.
- Backlog
- Number of open tickets/orders beyond SLA targets.
- CSAT (Customer Satisfaction Score)
- Typically a “How satisfied were you?” question after resolution.
- NPS (Net Promoter Score)
- “How likely are you to recommend us?” indicator of loyalty.
- Churn / retention
- For SaaS: cancellation rates; for e-commerce: repeat purchase rates.
Starter Target Ranges for Small Teams
These are reasonable starting points for a 5–20 person business. Adjust by industry and complexity.
For SaaS support (multi-channel: email + chat):
- Response time:
- P1: 1 business hour
- P2: 4 business hours
- P3: 1 business day
- Resolution time:
- P1: 8 business hours
- P2: 2 business days
- P3: 5 business days
- FCR: 60–75%
- Uptime: 99.5–99.9%
- CSAT: 85–90%+
For e-commerce fulfillment:
- Order processing time: same day or within 24 hours on business days
- Dispatch SLA: 24–48 hours from payment
- Delivery SLA (with courier partner): 2–7 days based on location
- Return handling: 3–5 business days to process refund after receiving item
- CSAT: 85–90%+
Note on Baselines and Improvement
Don’t start by promising “1-hour response 24/7” if you have a 3-person team.
Practical approach:
- Measure your current reality for 2–4 weeks
- Set targets slightly better than your average
- As you improve and add tools/people, tighten the SLA gradually
Step-by-Step: How to Create Your First SLA
Here’s a pragmatic 9-step process.
1) Map services and channels
What to do:
- List your core services (e.g., “SaaS app support”, “Order fulfillment”, “Onboarding calls”).
- List all channels customers use (email, chat, WhatsApp, phone, portal, social DMs).
Why: You can’t set SLAs on what you haven’t clearly defined.
Example:
- Service: “SaaS app support”
- Channels: support@company.com, in-app chat, helpdesk portal
2) Gather current performance baselines
What to do:
- Look at the last 30–60 days of tickets/orders.
- Measure: time to first response, time to resolution, backlog, order processing times.
Why: SLAs should be grounded in reality, not wishful thinking.
Example:
- You find that average first response is 6 hours on email and 15 minutes on chat.
3) Define customer-impacting use cases and priorities
What to do:
- List common issue types and categorize them by severity/impact.
- Create 3–4 priority levels (P1–P4) with definitions.
Why: Not all issues are equal. A login outage is not the same as a “how-to” question.
Example:
- P1 – Critical: System down, cannot place orders or log in.
- P2 – High: Major feature broken, but partial workaround exists.
- P3 – Medium: Non-critical bug, degraded performance.
- P4 – Low: General query, “how-to”, minor UI issue.
4) Set targets and thresholds (good, better, best)
What to do:
- For each priority level, set response and resolution targets.
- Define “Good” (baseline), “Better” (stretch), “Best” (long-term).
Why: It gives you a roadmap instead of a single, rigid target.
Example (SaaS support):
- P1 – Response:
- Good: 2 hours
- Better: 1 hour
- Best: 30 minutes
- P1 – Resolution:
- Good: Next business day
- Better: 8 hours
- Best: 4 hours or workaround
5) Define roles, escalation paths, and governance
What to do:
- Decide who owns what: support, ops, engineering, leadership.
- Define escalation: who is called for P1, at what time, via which channel.
- Define who reviews SLA performance (monthly/quarterly).
Why: SLAs fail when nobody owns them internally.
Example:
- P1 flow:
- L1 Support → If not resolved in 1 hour → Escalate to L2 Support
- If still not resolved in 4 hours → Escalate to Engineering + Customer Success Manager
- If customer impact severe → Notify COO / Founder
6) Draft the SLA and circulate for feedback
What to do:
- Create a draft document with the components above.
- Share internally with support, ops, sales, and leadership.
- Ask: “Can we actually deliver this consistently?”
Why: You avoid overpromising and get buy-in from people who must execute.
Example:
- Sales says “We’ve been saying 30 min response to close deals.”
- You respond: “Then we either need to staff for that or correct the pitch.”
7) Agree and publish (internal and external as appropriate)
What to do:
- Finalize the SLA and get leadership sign-off.
- Publish internal SLA/OLA in your knowledge base.
- Publish customer-facing SLA on your website or attach to contracts where relevant.
Why: An SLA in someone’s inbox is not a living standard; it has to be accessible.
Example:
- Internal SLA wiki page
- Public “Support SLA” page for your SaaS product
8) Instrument reporting and review cadence
What to do:
- Set up basic dashboards/reports from your ticketing system or even spreadsheets.
- Track at least: response time, resolution time, backlog, CSAT.
- Schedule monthly and quarterly SLA review meetings.
Why: If you don’t measure and review, the SLA becomes a dead document.
Example:
- Monthly report: % of tickets meeting SLA by priority + top 5 reasons for breaches.
9) Train the team and communicate to customers
What to do:
- Run short trainings with support, ops, sales, and success.
- Provide cheat sheets (e.g., “P1 = X, respond within Y hours”).
- Update onboarding for new hires.
- Communicate the new SLA to customers via email, help center, or onboarding flows.
Why: People can’t follow rules they don’t know. Customers value clarity.
Example:
- Email to customers: “We’ve formalized our support response and resolution commitments. Here’s what you can expect from us going forward.”
Author’s Note: We shall continue this subject of SLAs in a 3rd edition of this blog. Thank you for reading. As always, please let us know if there are any mistakes. Do leave a comment before you leave.