How to define a service level agreement

Your Service Level Agreement (SLA) is the formal promise you make to your customers about the reliability of your software and the speed of your support. To create a professional SLA, you must define your target uptime percentage, establish clear support response times based on the severity of the issue, and decide on the 'service credits' you will offer if you fail to meet these standards.

Setting your uptime guarantee

Uptime is the amount of time your service is available and functioning. Most UK-based SaaS businesses aim for 'three nines' (99.9% uptime). While 100% sounds better, it is practically impossible to guarantee due to maintenance and external factors. A 99.9% uptime target allows for about 43 minutes of downtime per month, which gives you a realistic safety net.

Defining support response times

You should categorise technical issues by their impact on the customer. Enterprise clients need to know that a 'Priority 1' issue (like the entire system being down) will be acknowledged faster than a 'Priority 3' issue (like a small visual bug). Use a table to make this clear in your document:

Note: Ensure you clarify if these times apply to 'Business Hours' (e.g., 9 am to 5 pm, Monday to Friday) or 24/7 support.

Calculating service credits

A remedy is what the customer receives if you break your SLA. The standard practice in the UK is to offer 'Service Credits'—a discount applied to the customer’s next bill. For example, if your uptime drops below 99.9% for the month, you might offer a 5% credit. If it drops below 95%, you might offer a 20% credit. This shows you are serious about your commitments without the risk of immediate cash refunds.

What to exclude

To protect your business, your SLA must include 'Exclusions.' You should not be held responsible for downtime caused by:

• Scheduled maintenance (provided you give 48 hours' notice).
• Issues with the customer’s own internet connection or hardware.
• Outages caused by third-party providers (such as your cloud hosting platform).
• Force majeure events (unforeseeable circumstances like natural disasters).

Tip: Keep your SLA simple and transparent. Enterprise procurement teams often review these documents first; if it is easy to read and fair, you will build trust much faster.