SLAs – for differentiation & positioning


I’ve been wanting to blog on this for some time and after reading many related posts in the recent times, I decided I had to get this off my chest. We all know of Service Level Agreements – those contractual bindings a service provider and his customer lay out as they seal their buyer-seller relationship. The SLAs when seen from the two angles: for the customer it’s a document that ensures he gets a “minimum” guarantee on services and maybe a compensation if this is not met, while for the service provider he sees this as opportunity to defend himself against any litigation that could happen (he is not sued for millions).

How many times have you come across words you cannot understand in these documents? SLAs today are just communication between the legal departments of organizations and are not really referred to unless something huge really happens that involves failure and costs.

SLAs to differentiate

There’s definitely a lot many better ways of using SLAs in today’s businesses –right from the very business model incorporated to the way market differentiation & positioning is done. What you would you think of a company that sends you its SLA doc that just has on it, in bold:

We promise to work our a** off to give you our 100%, here’s our CEO’s number if you think we’re not delivering

With the above, for those customers really bothered on what’s being done to ensure top services, add a whole section on technicalities involved – failover mechanisms, back up processes, state-of-the-art facilities bla bla. But no complicated “ifs”, “buts”, percentages and small text. Being upfront and convincing of sincerity goes a long way to winning over the customer’s faith than numbers and percentages. Something to the lines of this is what I read at http://www.feld.com/wp/archives/2010/03/the-best-sla-ive-seen-in-a-while.html.

I had another idea on a radically new business model centered on SLA and number of customers. I ran this through a few friends and they seemed pretty convinced. I’ll put that in my next post, any service provider willing to listen before I go public ;) ? My really long shot at some sweet money!

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  1. #1 by Ashish on August 6, 2010 - 1:58 am

    Working my a** off and my telephone number is not going to scale for a business that expects to grow. Maybe working many a**es together and giving out multiple phone numbers may help. But really, it boils down to availability and accountability.

    I accept it is important to keep SLAs simple for both parties. Good point, it really shouldn’t be between the legal departments.

    Looking forward to part two.

    Ashish

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