Service Level Agreements: Five Tips for Managed Service Providers
Mathew Dickerson, author of SLAM (service level agreement model), has taken the stage at the Managed Services International Seminar Series here in Melbourne, Australia. Many of the tips he’s sharing are applicable worldwide.
For instance, Dickerson offered these five key items to include in a modern Service Level Agreement (SLA):
- Get a fixed priced policy (FPP) in place. Hours no longer exist.
- Base all work around outcomes. (Outcome Based Service Work). And if you don’t deliver on outcomes, you really don’t deserve to charge for your services.
- Minimize variables in price calculations; don’t get hung up quoting prices. Instead, sell the value of your services and your company’s expertise.
- Promote money back guarantees. Dickerson’s technicians initially balked at this approach. But gradually, they saw positive responses from customers. For instance, when Dickerson’s company misses an SLA response time, he offers 5 percent of the monthly service fee back to the customer. That approach builds confidence and trust with the customer.
- Focus on proactive maintenance and consultancy — and be sure consulting meetings offer the opportunity to soft sell your customers on new solutions.
Once customers have agreed to go on a SLA, they generally don’t react negatively to price increases, Dickerson says. Generally speaking, he sends out an SLA price increase the first of July every year (the start of Australia’s business year), and increases have ranged from 5 percent to 8 percent in the past three years.
The Managed Services International Seminar Series stops next in Sydney, Australia.
Do you plan to follow any of Dickerson’s SLA tips or are you pursuing a different path?