Service Level Agreement

What is a Service Level Agreement (SLA)?

A Service Level Agreement is a contract between a service provider and a customer for recurring services. It specifies the scope and quality of the services provided, defines measurable metrics such as availability, response time, or processing time, and outlines the consequences of failing to meet the agreed-upon standards.

How does a Service Level Agreement work?

A Service Level Agreement works by combining a service description, measurable target values, and a procedure for handling deviations. The service description defines the services the provider delivers, such as telephone support, email processing, or infrastructure management. Based on this, performance metrics define the level to be achieved, such as a specific availability or response time. An escalation process determines who is notified and what steps are taken if the agreed-upon values are not met. Contract duration and review intervals determine how often the agreement is assessed and adjusted to meet changing requirements.

Service Level Agreement vs. Service Level: The differences

While the two terms are closely related, they refer to different things.

Contractual nature: A Service Level Agreement is the entire contract between the service provider and the customer. A Service Level is a single metric within that agreement.

Content: A Service Level Agreement includes the service description, multiple metrics, responsibilities, and escalation procedures. A Service Level describes only a single target value, such as the percentage of calls that should be answered within a set time.

Example: In a contact center, the 80/20 rule is a well-known Service Level, stating that 80 percent of calls should be answered within 20 seconds. This target value is part of an overarching Service Level Agreement that also governs other channels and metrics.

In practice, the term "Service Level" is often used as shorthand for the entire Service Level Agreement. However, for precise contact center management, the distinction is useful because an SLA consists of several individual Service Levels.

What types of Service Level Agreements are there?

Three basic forms have become established in practice.

Customer-based SLA: This covers all services used by a specific customer, regardless of how many different services are involved.

Service-based SLA: This applies to a single service and is therefore the same for all customers, such as telephone support, regardless of the individual client.

Multi-level SLA: This divides the agreement into several tiers tailored to different customer groups or service packages, such as varying response times depending on the contract level.

In addition to these external forms, SLAs are also used internally, for example between a specialist department and IT.

Which metrics are measured in a Service Level Agreement?

Service Level: The proportion of requests answered within a defined time window, usually expressed as a percentage with a time frame.

Average Speed of Answer (ASA): The average time a caller waits before being connected to an agent.

First Contact Resolution (FCR): The proportion of issues that are resolved conclusively during the first contact, without further follow-up or escalation.

Accessibility: The proportion of contact attempts that are successfully connected to an agent, as opposed to abandoned or unanswered requests.

Processing time: The time from the receipt of a written request, such as via email or a form, until a final response is provided.

Which of these metrics an SLA includes depends on the respective channel. For telephony, the service level is usually the primary focus, while for written channels, it is the processing time.

What are the benefits of a Service Level Agreement?

A Service Level Agreement creates clarity regarding what performance you can expect from a service provider, as well as what is expected of you when you define SLAs for your own service organization.

You gain an objective basis for performance discussions. Instead of subjective impressions, you have an agreed-upon metric that both sides can use as a reference.

You create accountability for workforce planning. If a target value such as 80 percent accessibility within 20 seconds is established, the necessary staffing requirements can be derived from it.

You strengthen trust with clients. A met SLA is verifiable proof of service quality, especially when customers receive regular reports on it.

What to look for when agreeing on a Service Level Agreement

An overly ambitious target may seem impressive at first, but it significantly drives up costs. A service level of 90 percent within 15 seconds requires considerably more staff than 80 percent within 20 seconds, often without the difference being noticeable to customers.

Realistic targets should be based on existing request volumes and available staffing resources, rather than on generic industry benchmarks. Calculating based on actual volume per time interval provides more reliable figures than adopting an unverified industry standard.

Different channels require different targets. A tight time window is standard for telephony because callers usually expect an immediate response. For emails, a window of several hours to one business day is common, as expectations are different there.

For small service teams with few concurrent requests, a simple SLA with a few key metrics is sufficient. A multi-level SLA with many individual metrics only becomes manageable once an organization reaches a certain size and level of channel diversity.

Service Level Agreements in practice

In many service organizations, requests arrive via multiple channels, each with its own agreed-upon target. Telephony, email, and chat are often measured separately, even though they are handled by the same staff in practice. This makes it difficult to meet all agreed-upon targets simultaneously, especially when request volumes fluctuate.

Cross-channel prioritization and distribution of requests is a core component of workload management, which bundles incoming requests from all channels into a shared queue and assigns them based on urgency. The page on monitoring and reportingdescribes how to track compliance with agreed service levels in real time. The page on customer service softwareshows how such management can be integrated into an existing system landscape.

Especially in a contact center with high channel volume, the combination of realistic targets and software that provides visibility into the total workload across all channels determines whether a Service Level Agreement is consistently met or exists only on paper.

FAQ

Häufig gestellte Fragen

A Service Level Agreement governs the agreement between a service provider and a customer. An Operational Level Agreement (OLA), on the other hand, defines how internal departments must work together to ensure the SLA can be met, such as between customer service and the IT department.

Most companies review their SLA annually or semi-annually. If request volumes or requirements grow more quickly—for instance, due to new channels or changing customer expectations—a more frequent review is worthwhile to ensure that the agreed-upon metrics remain realistic.

The consequences are defined within the SLA itself, ranging from an obligation to rectify the issue to contractually agreed-upon price discounts. Without such a provision, non-compliance often remains without consequences, which is why clear repercussions are an essential component of a robust SLA.

Not necessarily. For small service teams handling a limited, clearly manageable number of requests, informal expectations are often sufficient. However, once you have multiple employees, multiple channels, or external clients, an SLA creates a level of accountability that would otherwise be difficult to verify.

No. Telephone support is usually measured in seconds because callers expect an immediate response. For emails or forms, timeframes ranging from several hours to one business day are standard. Therefore, a uniform target value across all channels is rarely agreed upon.