A service-level agreement (SLA) is a contract between a service provider and a customer that documents the services to be furnished and the standards the provider must meet. It clearly states the metrics for measuring performance, the responsibilities of each party, and the penalties for failing to meet the agreed-upon targets.
A detailed description of services is the foundation of any SLA, outlining exactly what the customer will receive. This includes specific performance metrics, such as uptime guarantees, response times, and resolution times. These metrics must be clearly defined and measurable to avoid any ambiguity.
The agreement also specifies the duties of both the provider and the customer. It establishes a reporting structure for tracking performance against the set metrics. Finally, it details the penalties or remedies if the provider fails to meet the agreed-upon service levels.
SLAs are vital for managing expectations and strengthening the relationship between a service provider and a customer. They provide a clear framework for service delivery, ensuring both parties are aligned on performance standards and responsibilities.
While both agreements define service standards, they serve different purposes and audiences.
Crafting an effective SLA can be tricky, as they often fall short of their intended purpose. Misalignment with business objectives and a lack of flexibility are frequent pitfalls. These issues can undermine the agreement's value and strain the provider-customer relationship.
To avoid common pitfalls, it's crucial to approach SLAs strategically. A well-crafted agreement should be a living document that aligns with business goals and adapts to changing needs. Following these best practices ensures the SLA remains relevant and effective.
How often should an SLA be reviewed?
SLAs aren't static. They should be reviewed periodically—at least annually—to ensure they still align with business objectives and technological changes. Regular updates keep the agreement relevant and fair for both the provider and the customer.
What’s the difference between an SLA and a KPI?
An SLA is the formal agreement defining service standards. A Key Performance Indicator (KPI) is a specific metric used to measure performance against those standards. KPIs are the quantifiable data points used to enforce the SLA.
Can an SLA be changed after it's signed?
Absolutely. SLAs should be treated as living documents. They can be amended through a formal change control process agreed upon by both parties, allowing for adjustments as business needs or service capabilities evolve over time.
Learn about bounce rate, including understanding bounce rate implications, key factors affecting bounce rate, & reducing your bounce rate effectively.
Account-Based Analytics measures engagement and impact across target accounts, not just individual leads, to guide B2B sales and marketing efforts.
A marketing automation platform is software that automates marketing actions. It helps manage tasks like email campaigns and lead nurturing.
Social selling is the art of using social media to find, connect with, build relationships with, and nurture sales prospects.
The decision stage is where a well-researched buyer chooses a vendor. They compare specific products and pricing before making their final purchase.
Direct mail is a marketing method where businesses send physical promotional materials directly to potential customers' mailboxes.
Total Audience Measurement (TAM) provides a holistic view of content consumption, tracking viewership across all platforms and devices.
Enterprise Resource Planning (ERP) is a system of integrated software that businesses use to manage and automate their core day-to-day processes.
No Cold Calls is a sales strategy that replaces unsolicited calls with warm outreach to prospects who have already demonstrated interest.
Product-Led Growth (PLG) is a business strategy where the product itself drives user acquisition, conversion, and expansion.
A hybrid sales model blends traditional and digital sales methods to engage customers across multiple channels and buying preferences.
A System of Record (SoR) is the authoritative data source for a specific type of data. It acts as the single source of truth for an organization.
Performance monitoring involves collecting and analyzing data to track a system's operational health and efficiency, ensuring it meets set standards.
Application Performance Management (APM) monitors and manages an application's performance, availability, and the experience of its end-users.
Overcoming objections is the process of addressing and resolving a prospect's concerns or hesitations to move a sale forward.
A sales process is a structured set of steps that a sales team follows to move a prospect from an initial lead to a closed customer.
Sales Engineers blend deep technical knowledge with sales acumen, demonstrating a product's value and solving customer problems to drive revenue.
Account-Based Marketing (ABM) software helps teams coordinate personalized marketing and sales efforts to land high-value customer accounts.
Inside sales is a remote sales process where reps sell products or services via phone, email, and other digital tools instead of in person.
A competitive landscape is an analysis of your direct and indirect competitors, revealing their strengths, weaknesses, and market positioning.
Persona-based marketing uses fictional customer profiles, or personas, to create targeted messaging for specific audience segments.
Lead response time is the duration between a potential customer showing interest and your team's first point of contact with them.
Content curation involves gathering, organizing, and sharing the most relevant online content on a specific topic for a particular audience.
The sales pipeline velocity formula is a key metric that measures how quickly deals move through your pipeline and turn into revenue.
Learn about batch processing, including benefits of batch processing, best practices for implementation, & common use cases.
A lead list is a curated database of potential customers (leads) with contact information and other key data for sales and marketing outreach.
A pain point is a specific, recurring problem your target customers face, causing them frustration, inefficiency, or added costs.
Conversion rate is the percentage of visitors who complete a desired goal, like a purchase or sign-up, out of the total number of visitors.
A closed question is a type of query that elicits a simple, often one-word answer like 'yes' or 'no,' or a specific, factual response.
A triggered email is an automated message sent to a user in response to a specific action or event, like signing up or making a purchase.
An Ideal Customer Profile (ICP) is a detailed description of the perfect, hypothetical company that would get the most value from your product.
Trade shows are events where companies in a specific industry showcase their latest products and services to find new customers and partners.
Sales compensation is the total pay a salesperson receives, including salary, commissions, and bonuses, structured to motivate performance.
Serviceable Addressable Market (SAM) is the portion of the market your business can realistically serve with its current products and sales channels.
Dynamic territories are fluid sales assignments that adjust based on real-time data, ensuring reps can focus on the highest-value accounts.
An AI sales script generator is a tool that uses artificial intelligence to create personalized sales scripts for any outreach scenario.
Git is a distributed version control system that tracks changes in code, allowing developers to collaborate and manage project history effectively.
“No Spam” is a commitment to sending only relevant, solicited messages. It means avoiding bulk, unwanted emails to respect the recipient's inbox.
Learn about B2B sales process, including key components of B2B sales processes, & crafting an effective B2B sales strategy.
Integration testing is a software testing phase where individual modules are combined and tested together to verify their interaction.
Voice broadcasting is an automated system that delivers a pre-recorded voice message to a large list of phone numbers simultaneously.
Demand capture is the strategy of engaging potential customers who are already actively looking for a solution that your company provides.
Cohort analysis is a behavioral analytics tool that groups users with common traits to track their actions and engagement over time.
Referral marketing is a strategy that incentivizes existing customers to recommend a company's products or services to their personal network.
Data mining is the process of discovering patterns, trends, and useful information from large datasets to make better business decisions.
Learn about business intelligence in marketing, including the role of data in marketing BI, key components of marketing BI, & marketing BI vs. market research.
Forecasting uses historical data to make informed predictions about future trends, helping businesses anticipate outcomes and plan accordingly.
Lead management is the process of capturing, nurturing, and qualifying leads to guide them from initial interest to sales-ready.
Marketing Operations (MOps) is the engine of a marketing team, managing the technology, processes, and people to run campaigns effectively.
Contact data is the set of details, like names, emails, and phone numbers, used to get in touch with a person or business for outreach.
An Account Development Representative (ADR) identifies and qualifies new business opportunities, creating a pipeline for account executives.
Zero-based budgeting (ZBB) is a method where all expenses are re-evaluated and must be justified from scratch for each new budget period.
Siloed describes the isolation of data, teams, or systems within a company, which blocks collaboration and creates operational bottlenecks.
A Unique Value Proposition (UVP) is a concise statement that clearly communicates the unique benefit a customer gets from your product or service.
An early adopter is a user who embraces a new product or technology before the majority, helping to validate and popularize the innovation.
Learn about branded keywords, including identifying your branded keywords, & strategies for optimizing branded keywords.
Accounts Payable (AP) is the money a company owes its suppliers for goods or services bought on credit. It's listed as a current liability.
A product champion is an internal evangelist who drives a product's adoption and success by ensuring it solves real problems for their team.
Sales operations analytics is the practice of analyzing sales data to improve the efficiency and effectiveness of the entire sales process.
Payment processors are companies that handle card transactions, connecting merchants with the banks needed to complete a sale.
Account-Based Everything (ABE) is a strategy aligning sales, marketing, and success teams to focus on a specific set of high-value accounts.
A cloud-based CRM is a customer relationship management tool hosted online, letting teams access and manage customer data from anywhere.
De-duping, or data deduplication, is the process of eliminating duplicate copies of data within a dataset to improve accuracy and save space.
Sales conversion rate is the percentage of prospects who take a desired action, like making a purchase, turning them into customers.
A value gap is the difference between the value a customer expects from a product and the actual value they receive, often leading to churn.
Serviceable Obtainable Market (SOM) is the portion of the market you can realistically capture with your current resources, sales, and marketing.
A buying signal is any action from a prospect that indicates they are interested in making a purchase, helping sales teams prioritize leads.
Employee engagement is the emotional commitment an employee has to their organization, motivating them to contribute to the company's success.
Supply Chain Management oversees the entire production flow of a good or service, from raw materials to final delivery to the consumer.
Real-time data is information processed and made available almost instantaneously, enabling immediate analysis and decision-making.
Sales training is the process of honing a salesperson's skills and knowledge to enhance their effectiveness and drive sales success.
A headless CMS is a back-end content repository that delivers content via API to any front-end, decoupling the content from its presentation layer.
Forward revenue is the total value of all active, committed contracts that are expected to be recognized as revenue in the future.
The Target Buying Stage identifies a prospect's position in the buying journey, from initial awareness to the final decision to purchase.
Demand is the economic principle describing a consumer's desire and willingness to purchase a specific good or service at a particular price.
Loyalty programs are marketing strategies designed to reward repeat customers. They offer incentives like discounts or exclusive access to encourage retention.
Omnichannel marketing creates a seamless, unified customer experience by integrating a company's various communication and sales channels.
A Value-Added Reseller (VAR) is a company that adds features or services to an existing product, then resells it as an integrated solution.
Demand generation is the process of creating awareness and interest in your products to build a pipeline of qualified leads for your sales team.
Load testing is a type of performance testing that determines how a system behaves under both normal and anticipated peak load conditions.
Firmographics are descriptive attributes of organizations, used to segment companies by characteristics like industry, size, and location.
A Target Account List (TAL) is a focused list of high-value companies that a business specifically aims to convert into customers.
Data-driven marketing uses customer data to inform marketing decisions, optimize campaigns, and deliver personalized experiences to consumers.
Marketing performance is the process of measuring a campaign's effectiveness against set goals using key metrics like ROI and conversion rates.
Loss aversion is our tendency to feel the sting of a loss more acutely than the pleasure of an equivalent gain.
Responsive design is an approach where a website's layout adapts to the user's screen size, providing an optimal experience on any device.
Programmatic display campaigns use automation to buy and sell digital ad space in real-time, targeting specific audiences across the web.
Hot leads are prospective customers who have shown significant interest and are ready to buy, making them a top priority for sales teams.
Network monitoring is the continuous process of tracking a computer network's performance and health to detect and resolve issues proactively.
Personalization is the practice of using data to tailor products, services, or content to an individual's specific needs and preferences.
Learn about BANT framework, including implementing BANT in sales strategy, advantages of the BANT methodology, & BANT vs. other qualification models.
The C-suite, or C-level, refers to a company's most senior executives. Their titles usually start with 'Chief,' such as CEO, CFO, or CTO.
A consumer is an individual or entity that buys products or services for personal use, not for resale. They are the final user in a supply chain.
Learn about B2B marketing attribution, including challenges in B2B marketing attribution, & key metrics for effective attribution.
A sales funnel is a model illustrating the customer's journey from initial awareness to the final purchase, narrowing down leads at each stage.
CRM enrichment is the process of adding third-party data to your existing customer profiles to make them more complete and accurate.
Affiliate marketing is a performance-based model where affiliates earn a commission for promoting another company’s products or services.
Lead generation tactics are the strategies and methods used to attract potential customers and convert them into leads for your sales team.
Learn about B2B sales channels, including types of B2B sales channels, strategies for effective channel selection, & integrating technology in B2B sales.
Page views count the total number of times a page on your website is loaded. This metric is a key indicator of your site's overall traffic.