Do your MSP clients really need SLA’s?
One of the frequent assumptions made by smaller Managed Service Provider (MSP’s) and those IT Solution Providers moving into the MSP market is that they require formal Service Level Agreements (SLA’s) to share with their new Managed Service clients.
Simply put, an SLA is an written agreement between the MSP and the client that sets expectations for contractually agreed response times for service requests from clients.
An SLA document is typically broken down into categories based on priority of support requests logged, with a minimum response time and a minimum time to resolution.
For instance, a server outage that affects the whole business may be deemed a “Priority One” issue, which the MSP contractually agrees to response to (i.e. acknowledge the issue) within one hour, and resolve within eight hours.
But in my experience, as a small MSP, if you quote such an SLA to a potential new client you’ll typically get the response “What?! If my server is down, it might be an hour before you respond, and eight hours before you fix it? That’s not good enough!”
The MSP then hastily re-assures the client that no, most urgent issues of this nature are responded to immediately and given full attention. “So why quote an hour to respond and eight hours to fix?” says the client, suspiciously eyeing up the MSP.
Let me share that Service Level Agreements absolutely have their place. They are absolutely required in the mid-market and enterprise space, and often in the SMB space where the client demands it.
But for your typical small business looking to engage an MSP who specializes in SMB’s, it’s my opinion that SLA’s are more trouble than they are worth.
In my experience, Small Businesses typically deal with small MSP’s because they want a trusted relationship. There is certainly a need for MSP’s to set a clients expectations so that clients don’t come to expect you to deal with every service request at the drop of a hat, but this can be done in a warm manner rather than quoting SLA’s.
For instance, the client who calls your Helpdesk to report a broken printer. If your team are unable to attend immediately, perhaps because they are dealing with a higher priority issue for another client, then helping the client with the broken printer to find a workaround (“Is there another printer I could help you use?”) and setting expectations (“We have an engineer due to visit you tomorrow. Are you able to work around the issue until that time?”) more often than not yields a positive response from the client.
Working in this way, most clients understand that an MSP’s resources are finite, and that if they were the client suffering from a server outage - you’d be there to help them.
There is, however, an opportunity to measure your average response time and resolution time and use this to re-inforce with existing clients your commitment to speedy responses, and to use as a sales tool with prospective new clients.
“We typically respond to service requests within 3 minutes, and an average request is resolved within 15 minutes” is a much more powerful statement that quoting priorities and worst-case response times.
So while SLA’s have their place, don’t forget to talk realistically with both clients and prospective clients - in the SMB environment, it’s what you’re actually delivering rather than what you hope you don’t struggle to deliver that counts.
Looking for more SLA tips?
Listen to our May webinar, "Managing Your Managed Services Business" to learn how you can get your SLAs working for you!
As the former owner of an award winning IT Managed Service Provider, Richard Tubb works with MSPs to help them increase sales, take on employees and build up relationships with key industry contacts. You don't have to do it alone any more - contact Richard and have a chat about your needs and how he can help you.