Maintaining B2B Customer Relationships | | Published July 20, 2018

The Importance of Service Level Agreements in the B2B Industry

If you’re a B2B (business-to-business) company and you don’t have Service Level Agreements (SLAs) in place with your customers, you're missing out on an important opportunity to improve customer retention and satisfaction. SLAs are contractually agreed upon terms between a company and their customers that ensures the services provided meet certain thresholds (i.e. uptime, responsiveness, etc.). This can mean guaranteeing servers will have 99.9% uptime for your product or that all customer service inquiries will be responded to within a 24-hour window.

With many companies already striving for a high level of service, what is the importance of Service Level Agreements in the B2B industry? Here are the key reasons so many companies rely on SLAs for their profitability…

They strengthen the customer relationship at its core – From a customer’s perspective, entering into a new business relationship has a lot of risk. A bad relationship can lead to operational issues, impacting the bottom line and even their professional career. SLAs are the safety net of accountability that businesses use to alleviate these fears. They ensure customers won’t be forgotten after they sign on the dotted line by holding everyone fully accountable for their actions. Some SLAs even offer financial and product “kickbacks” to customers should a business not hold up their end of the agreement, eliminating even more potential concerns.

A good SLA strategy can increase new business – Too often, customers will leave a competitor because they are inattentive. Issues and requests slip through the cracks, creating even more problems and chaos that can only be solved by terminating the relationship. Your prospective customers are often looking to start a new professional relationship because they've experienced poor service and are looking for a partner who will listen and respond to their needs. With this in mind, leveraging business SLAs can be an incredibly powerful sales tool. However, you can’t just promise great SLAs over the phone; instead make sure prospects ask current customers about their experience with your SLAs while performing their due diligence. Hearing about the success and impact of a thriving SLA program can make or break a deal, especially for a prospect with an experience of poor service delivery in the past.

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SLAs create clear and defined communication boundaries – While defined SLAs provide clear guidelines for employees to communicate with customers, the benefits of SLAs aren’t completely one-sided. A carefully constructed agreement can also be leveraged as a resource by your employees for difficult conversations. For example, many companies have that one customer that doesn't hesitate to follow up several times a day to check in on the status of their issue. When this happens too often, an SLA can be a key document in reaffirming communication guidelines. You can refer to the SLA and let the customer know that they agreed, in writing, to allow for a 12-hour response period for a non-severe issue. This reminder usually makes the customer back off, increasing productivity and improving staff morale.

Rock solid SLAs go a long way in retaining customers – When evaluating your unique business-customer relationship, it’s important to remember that every customer you have has similar relationships across different industries. Because of this, you are constantly being compared and evaluated not only to your direct competition but also other companies that a customer works with. One way to stand out from all other companies is by providing excellent customer service reinforced by rock solid SLAs. Take the time up front to negotiate these agreements so they meet your customer’s exact needs but are also fair to your business. Shining in customer service not only leads to happier business relationships, but it also reduces churn and increases your referral rate. 


In short, Service Level Agreements are so important in the B2B industry because they can turn a good company into a great one. They create a formalized communication process that both a business and its customers agree upon so both parties can be as efficient and successful as possible.