What is a Service Level Agreement (SLA)?

For marketers, an SLA is an agreement between a company’s sales and marketing teams that defines sales expectations for Marketing and vice versa. The Marketing SLA defines the expectations Sales has for Marketing regarding lead quantity and lead quality. In contrast,  the Sales SLA defines the expectations Marketing has for Sales and how deeply and frequently Sales will pursue each qualified lead.


Suppose Company A, a software-as-a-service (SaaS) provider, offers a cloud-based customer relationship management (CRM) platform to its clients. Company A and one of its clients, Company B, enter into a Service Level Agreement (SLA) to define the terms of their business relationship.

Here are some components of the SLA between Company A and Company B:

  1. Service Availability: Company A guarantees that its CRM platform will be available 99.9% of the time during business hours (e.g., Monday to Friday, 9 am to 5 pm).
  2. Performance Metrics: Company A commits to maintaining a response time of less than 500 milliseconds for customer inquiries and ensuring that the CRM platform can handle a minimum of 10,000 concurrent users without significant performance degradation.
  3. Customer Support: Company A agrees to provide 24/7 customer support via email and phone with a guaranteed response time of less than one hour for critical issues and less than four hours for non-critical issues.
  4. Data Security and Compliance: Company A ensures that customer data stored on its CRM platform will be encrypted and compliant with industry standards and regulations, such as GDPR (General Data Protection Regulation) and HIPAA (Health Insurance Portability and Accountability Act).
  5. Penalties and Remedies: The SLA specifies penalties or remedies that Company A will provide to Company B in the event of service disruptions, breaches of service level targets, or other failures to meet the agreed-upon service standards. For example, Company A may offer service credits or refunds for downtime exceeding the agreed-upon threshold.

By establishing a comprehensive SLA, both Company A and Company B have a clear understanding of their respective responsibilities and expectations, helping to ensure a mutually beneficial and successful business relationship.

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