We’ve all experienced those moments of anticipation and excitement when we reach for our phones, open a food delivery or ride-sharing app, and order food or rides online.

In that instant, an unspoken agreement is forged between the driver and customer, each acknowledging their responsibilities and expectations.

Service-Level Agreement, known as SLAs, are the agreements between the support provider and the customer that ensure everyone’s on the same page. Just like when you order a ride, there are certain expectations in place – the driver has to arrive within a specific timeframe, the cost should be clear, and you should be safely delivered to your destination.

So why do we need these SLAs? Well, when it comes to customer support, meeting those ever-growing demands can be a real challenge. That’s where these agreements are important. They act as a contract, outlining the obligations and promises both parties are making.

SLA Performance Metrics

In customer support, SLAs are there for the customer support platforms. Performance metrics are good indicators of how well your team provides customer service to your customers.

A. First response time

One of the key performance metrics for your SLAs is your response time or the time to first response. Time to first response is the time between when a consumer opens a ticket and when they receive their first response from an agent.

Your response time or your time to first response is an important factor your customers would want to know. They want assurance that you’ll respond to their tickets as soon as possible. They should receive a notification that someone is attending to their ticket. You should always inform them of their ticket’s status so they are aware of the progress being made towards a resolution.

B. Average resolution time

As important as it is to respond promptly, they would want their issues resolved as soon as possible too.

Resolution time or average resolution time starts from when the customer first opened the ticket to the time when the ticket has been marked ‘closed’ or ‘resolved’. Resolution time shows how efficient your agent is in resolving customer’s queries as fast as possible.

There are two types of average resolution time:

1. First resolution is the amount of time it takes a representative to address the first client issue in the ticket.
2. Full resolution is the amount of time it takes an agent to resolve a ticket fully while answering all the customer’s enquiries.

First resolution time is a good SLA metric. Customers want you to handle their problems in the fastest and most effective way possible, and they will be happy if your agent does it right the first time.

In the ideal situation, your agent resolves the problem during their first interaction with the customer and the latter doesn’t have any more questions. Your company will achieve its SLAs with this kind of efficient and timely support.

C. Customer satisfaction ratings

Customer feedback is a good way to measure your SLA metrics. To find out more about your customers’ individual experiences with your current SLAs, ask them for feedback. Find out how they think your company can improve.

There are different ways to gather feedback from your customers, and one is through customer satisfaction surveys.

One of the most important tools for improving the interaction between a business and a client is a customer satisfaction survey. They provide quick, effective, and comprehensive client feedback at scale.

A customer satisfaction survey is an an online questionnaire used to gather customer opinions and feelings on:

• Your products or services
• Your brand
• User experience (customer service, tech support, feature usage)

In this case, you need to gather insights on their user experience, and that can be measured through Customer Satisfaction Score (CSAT).

The Customer Satisfaction score (CSAT) measures a customer’s experience and level of satisfaction with a particular product, feature, or team interaction in real time. We suggest you measure CSAT at many touchpoints throughout the user journey to assess the overall level of customer satisfaction with your product or service.

D. Escalation and priority handling

Escalation and priority handling determines how well your team handles complicated issues and organizes them by severity. The escalation process is a formal procedure used to notify a higher authority to a problem. It is the process of prioritizing customer support concerns, assessing the severity of problems, and ensuring that the appropriate employees are assigned to handle them.
There are three types of escalation:

1. When an agent is unable to resolve a customer’s request within their normal scope of responsibilities, functional escalation occurs. The most common reason for this is that the requested service is outside of their area of competence.
2. A hierarchical escalation occurs when a customer’s request requires the assistance of a higher-ranking employee, such as a manager or supervisor.
3. Automatic escalation happens when a service level agreement (SLA) is violated and the team’s managers are automatically notified. When a client escalates a problem, they want you to take charge and resolve it before it ruins the company’s reputation.

The best way to handle escalations is good communication and priority handling. Set SLAs that your team can follow. Create clear escalation processes and procedures. Take note of the feedback provided by the clients.
When escalation happens, bring each escalation to an end as soon as possible. Learn from it and improve future customer interactions.

Importance of SLA Performance Metrics

A. Customer satisfaction and retention

SLA metrics are believed to have a huge impact on customer satisfaction and retention, but it isn’t the SLA itself– it’s how you achieve them.

Statistics found that 52% of customers expect a quick resolution, and 80% of customers said they want companies to respond faster.

Customers who experience smooth customer service encounters are 94% more likely to repurchase the product or service and 88% more likely to increase their spending.

SLA metrics like first response time and average resolution time holds a significant impact on customer satisfaction and retention. To build customer trust and loyalty, SLAs must meet consumer expectations.

But customer expectations vary depending on the industry and severity of the problem. Their needs are defined by the criticality of the situation. That’s why aside from the nature of the problem, multiple SLAs must exist for different phases of the customer journey.

Refrain from building your SLAs based on existing templates or what others in your industry are doing. Instead, develop your SLAs after listening to the needs of your target market.

B. Operational efficiency

SLA helps you determine which teams and individuals are your true champions and where you can train and coach them. Monitoring your performance also allows you to adjust your objectives to better serve your employees.

For example, if you consistently resolve tickets faster than what’s stated in your SLA, then maybe it’s time to change it and set a higher goal.

SLA metrics helps you see trends and take action to help your team grow and succeed. It pushes everyone to be the best they can in order to comply with the terms agreed, and this in return results in better overall performance and customer experience.

C. Service quality and reputation

This can be considered the main reason why SLAs exist, to ensure customers that they will get quality service from you. And when you consistently abide by your SLAs, customers themselves will recommend you to others, boosting your reputation.

People are now more critical and perceptive when it comes to their purchase and subscriptions, and they wouldn’t think twice of dropping your brand or business when they see loopholes in your service. That’s how SLAs help you prove your worth– you promise customers something, and that’s already a big deal: assurance.

They start to trust your brand because they see you are brave enough to offer SLA, proving how confident you are with your team and your operations. And when you consistently comply with your SLAs, customers provide positive feedback, improving your reputation.

However, the opposite thing happens when you fail to comply, and negative word-of-mouth is one of the least things you’ll want to encounter. That just shows how SLAs can either make or break your business.

Implementation and Monitoring

Establishing customer support ticket SLAs make your SOPs and expectations clear to your team. Both drafting the SLAs and establishing them on firm ground entail an ongoing process of regular reviews and revisions as needed.

A. Assess current service performance

Start by assessing the service and the quality of service currently received by your customers. When you start implementing a SLA, use your assessment of your current service conditions as a guide in writing objectives and standards. You can conduct this assessment for each customer for whom you may require a SLA.

B. Define clear SLA objectives

Your SLA must clearly identify and outline your objectives, whether it is modified or a brand new one. Make sure to include the following points:

• • List of stakeholders and points of contact, including descriptions of their roles
  • Service scope, which includes both specific services supplied and services excluded
  • Customer responsibilities, such as how much and how often with which the customer shall pay
  • Vendor responsibilities, including specific measures that the vendor must take
  • The exact conditions for canceling the agreement, such as when goals are not met after a certain amount of time.

C. Establish reporting and tracking mechanisms

1. Implementing systems to track SLA performance

First of the two performance metrics are about timeliness. So in order to measure that, it’s ideal to have visual timers. There are software solutions out there, free and paid. But you can also use automations/integrations like IFTTT and Zapier.

You can program triggers when you receive an email to track response and resolution times. Then also program more integrations to collect and analyze the response and resolution times.

For customer satisfaction ratings, your existing customer feedback software can be sufficient enough as long as you collect it and store it for future reference.

Lastly, you should track the number of escalations that you perform. Get as much information as you can from escalations and treat every single ticket as a learning opportunity.

2. Regular reporting and analysis of SLA metrics

It’s best practice to track SLA performance and have the reports as often as possible. Because SLAs are very important to customers. Failure to meet SLAs or worse, multiple failures, can lead to loss of revenue and ultimately customer churn.

Discuss SLAs daily, have a weekly performance recap, and every month plan for solutions to improve SLAs.

D. Continuous improvement and adjustment

1. Regular review of SLA performance

Like most metrics in a business, hitting your target isn’t the end of the job. If you want longevity and growth in your business, you would want to constantly be improving your performance or at least meeting customer expectations.

This is another reason why it’s important to check, analyze, and talk about SLA as much as possible with your team.

Losing a customer isn’t just a wasted opportunity, it’s a financial loss and an added expense. Especially during these times when competition is very challenging and customer acquisition is very expensive.

2. Identifying areas for improvement and making necessary adjustments

The purpose of metrics is to not just compare performances, it’s also to understand why a customer behavior happens.

For example, escalations usually mean that the inquiry or concern cannot be handled by the first layer of customer support. So it’s safe to assume that lowering the number of escalations that you process every week or month is a good thing.

However, some businesses push to clean up the metric too much that can lead to bad habits, especially for customer support.

Let’s say that the business heavily discourages escalations. To prevent the high escalation rate, customer service reps will get penalized for every escalation.

And in order to avoid penalties, customer service reps then don’t escalate issues even though it is the protocol, and it’s the only way to provide resolution for the customer.

The opposite outcome gets achieved. We have 0 escalations this month, but we lost 40 customers because their issues were not handled properly.

Before turning a knob on a metric, make sure you understand what causes that behavior to appear in the first place.

For example, you see that for this month response times were higher than normal. Instead of getting a response within half an hour, the customer receives their response in an hour across all the agents. So you have to ask:

• Is it an agent issue? What were the agents doing after receiving the ticket?
• Is it a system issue? Does the ticket only show up after an hour of receiving it?
• Is it the nature of the concern? Are the customer service tickets for this month more complex?
• Is it an issue out of your control? The issue is that the customer receives the response in an hour. So it might be that the customers were receiving the response late even if the agents replied timely.

Once you understand the cause of the less favorable metric, we can then implement the solutions to fix it.

Conclusion

SLAs are crucial to service-based organizations as it becomes the de facto contract between the provider and the customer. But it’s also important to all businesses.

If you have any form of customer service, you have SLAs. That’s how you ensure you deliver great customer service.

SLAs manage the most important currency for online transactions: Trust. And trust is one of the most volatile currencies out there. Because once you lose it, it’s almost impossible to get back no matter how much you invest.

And it’s never too late. If you are not using any SLAs for your customer service, it’s better to start now. And if you need help implementing these strategies, USource is here to help you.