“I won’t complain. I just won’t come back.” The line was made famous in a Brown & Williamson tobacco ad and is often quoted by thought leaders, experts, customer service, and sales folks alike. Even today, it holds mostly true. Most clients and customers are not likely to be incredibly vocal about being dissatisfied with service, instead, at the end of a contract, they’ll just leave. It’s imperative, then, that businesses, especially managed service providers (MSPs), manage and monitor client expectations and service level agreements (SLA) KPIs to track and retain clients.

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What is an SLA?

Service level agreements, or SLAs, are the cornerstone of MSP businesses—whether delivering services to individuals or to other companies. SLAs document the types and level of service provided to the customer, outline what responsibilities fall upon the provider and which upon the user, and include the details regarding service availability. In short, they are the service manifest.

What are the 3 types of SLA?

We often talk about SLAs as if they’re one singular thing with many variables and, in part, that’s true. The contents of the SLA will depend largely on the services you offer and what your client needs. However, there are 3 types of SLAs that determine the focus of the document itself.

  • Customer-based SLA

    As the name implies, this SLA is based largely on what an individual customer will need, even if it’s multiple services. This streamlines the contract into one document and allows your service provider to really tailor the agreement to a particular customer. Customer-based SLAs are best for organizations that offer multiple services that may not fall under the same umbrella.

  • Service-based SLAs

    Service-based SLAs create a uniform SLA used across a customer base for a particular service that your business offers. It’s easy and convenient for the service provider, particularly when the service and service level are uniform, meaning every client gets the same service.

  • Multi-level SLA

    A multi-level SLA is typically used for a provider who has multiple services that will be utilized at different service levels across a single organization or business. In other words, a large business may contract with one service provider for different needs in different departments. Rather than creating a contract for each service or each department, a multi-level service SLA would be utilized.

What is service level management?

A core part of managing SLAs is the tracking of key performance indicators (KPIs) to monitor compliance with SLAs and identify opportunities for improvement or even expansion. This task is often referred to as service level management.

Service level management is the practice of monitoring and controlling key performance indicators related to the organization’s SLAs. This is usually done with an eye towards improving quality of service and customer satisfaction.

Being able to consistently meet service level agreements and deliver results is a must for building a strong reputation and keeping clients. By keeping track of key performance indicators for service level management, MSPs can monitor their success at meeting their SLA targets and investigate any shortcomings.

How to set and measure SLAs

SLAs can be tricky as they’re often pretty black and white meaning either your MSP met the service level or it did not. Measuring their success can be further complicated by the need to gather a lot of data, sometimes from multiple sources, and analyze a variety of KPIs to determine whether or not a particular service was delivered in the way it’s outlined in the agreement.

To set SLAs you can measure, you’ll want to establish what services your MSP is offering and, if you’ve got an SLA you’re currently using, work from the existing document. Then, ask “What are the baselines for those services?”

For example, if you’re providing technical support to a business with multi-channel offerings, what would an appropriate response time be for a trouble ticket? According to over 1,000 different companies, the average response time is 7 hours and 4 minutes. But, you’ll need to ask yourself, do you want to provide average service? Will that differentiate your MSP in the market? The top 5% respond in 16 minutes. Considering that data, where do you currently fall and where do you want to fall?

Next, consult with your clients. Ask them how you’re doing, where you excel, and where you may be missing the mark. While you should be tracking and reporting regularly, as well as  eliciting feedback via surveys, it’s never a bad idea to have this conversation.

Once you’ve established what services you offer, what industry standards are, where you’re currently performing, and, according to your clients, where you can improve, it’s time to re-evaluate those SLAs.

Finally, consult with your team, both leadership and those providing the service, to determine what services you can add, improve, or even remove with the end goal of not only increasing customer satisfaction, but building a better MSP. Your SLA is a tool for your customer, your relationship, and for your own business as well.

Top 5 KPIs your MSP should track for service level management

There are many key performance indicators for service level management that you could track, especially for an MSP. Much of your work and relationship with clients relies upon your ability to provide the services you’ve defined at the level you’ve agreed to. While some of these KPIs are internal, meaning you’ll track it solely from within your organization, other examples are KPIs you’ll want to report to your MSP clients.


1. SLA success and failure rates

How often does your organization meet or fail to deliver services within the bounds of its SLAs? Naturally, this can be hard to track, considering how different individual SLAs can be from one organization to the next.


For example, an SLA could be “99% Uptime year-round” for a cloud computing service, while a cybersecurity company might have SLAs like “identify and resolve security breaches within two hours.”


If your number of breached SLAs is high, that might indicate that your SLAs are too strict, or that a critical tool or resource is missing. This could be a good opportunity to revisit your SLAs and processes and reevaluate them to improve service delivery.


2. SLA cost metrics

In any business management strategy, analyzing costs against profits is a basic necessity. Setting up performance metrics that track the cost of meeting SLA targets can be crucial for monitoring the sustainability of a service level agreement.


If costs are running high, it may be necessary to revisit either the SLA itself or the means used to meet it. For example, if you have an SLA of “resolving security breaches within two hours” as a managed security service provider (MSSP) and were maintaining the SLA by having on-duty staff monitoring the client network at all hours, odds are your costs would be high. Here, applying an automated threat detection solution or even an intrusion prevention system would reduce the need to dedicate labor to the task and reduce costs.


By tracking cost metrics for your SLAs, you can more effectively manage your budget and make adjustments to improve the long-term viability of your services.


3. Time to response

Many SLAs are time-sensitive, promising certain actions or outcomes within a given period of time. Because of this, one critical performance metric to monitor is the time it takes to respond to an incident, issue, or trouble ticket. The shorter the wait between event and action, the better.


If you notice that your response time is too long, it may be a good idea to take a look at your notification processes and workflows for delivering services. This helps you improve your service level management by identifying ways to optimize response times.


4. Customer Retention Rate

Most businesses understand that keeping customers is far more cost effective than acquiring new ones. Further, data suggests that improving your customer retention rate by even 5% can boost profits by 25-95%. However, if you’re not retaining customers, this KPI may be the canary in the coal mine.

If you notice your customer retention rate decreasing, it’s time to take action. 

5. Average resolution time

While keeping tabs on how quickly you respond to client needs and issues is vital, knowing how quickly you resolve them is equally important. Obviously clients want a low response time, but those who have a low resolution time are likely to be happier. In fact, the average service resolution time is roughly 3 days with the top 20% resolving issues in just under 2 days.

How quickly you are able to resolve client issues is crucial to building both your reputation and your client relationship. It’s probably pretty obvious that the quicker you resolve problems, the more they’ll depend on you and stay with your business rather than seeking another MSP.

Using KPIs to improve service level management

The examples listed above are just a few potential KPIs you could use to improve your service level management. When selecting performance metrics for your service level agreements, consider:


  • How closely the KPI reflects the intent of the SLA;
  • How the information the KPI provides could be used to improve the SLA;
  • Whether you need multiple KPIs to thoroughly assess SLA performance; and
  • Whether you or your employees can control the performance metric for the SLA.


Ideally, the metrics you choose should have a strong correlation to the SLA, be useful for tweaking how you approach service delivery, and be something you can improve.

Providing an SLA Report

While monitoring “internal” SLAs such as your success/failure rate at meeting SLA metrics, monitoring the metrics that impact your client are just as important (response time etc). And, it’s not just enough to track and monitor those KPIs and regularly report on your successes to your clients.

That’s the purpose of an SLA report, to keep your client in the know, maintain transparency, and continuously monitor your business’s performance when it comes to the delivery of agreed upon service. It should be a core part of your service offering and provides the justification your client needs to maintain your relationship.

Make SLA tracking and reporting easy with dashboards

In summary, monitoring the right KPIs, both yours and your clients, and being able to report those, as needed, are vital to client retention. Those crucial elements for monitoring and reporting on service level KPIs are processes that BrightGauge can help with.

First, service level KPIs often require pulling data from multiple sources. This often means switching between applications or screens and spending significant time entering that data into a spreadsheet. That type of slow down is avoidable, especially when using BrightGauge’s dashboard tool.

Instead of spending your time pulling data, BrightGauge does that for you and presents it on a convenient dashboard, enabling you to visualize your KPIs on a single display when and how you need it. While there are dashboards ready to go out-of-the-box, it’s a fully customizable tool meaning you can pick and choose what you need and then share that information with team members.

Not only are those KPIs shareable with the team members who help you meet your goals, but the automated reporting feature means that in minutes you can send reports to clients that demonstrate how you’re progressing on service level KPIs saving you time and building strong client relationships.

Need help to improve your MSP's KPI tracking so you can use metrics to optimize your service level management? Reach out to the BrightGauge team to learn more!

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