A service level agreement is an agreement between a company that is providing service and the person or other company to which the service is being provided. The precise terms of the agreement will be laid out with regards to the expectations for both parties, as well as the penalties should the expectations not be met. One example of a company that frequently uses a service level agreement (SLA) is that of an Internet provider. An SLA between an Internet service provider and a customer will discuss precisely the services that are being provided and what the customer has to do in order to get these services.Why are Service Level Agreements Important?

• Makes Customer Commitments Clear:
  One of the main advantages is that an SLA will make the commitments that a company makes to a customer very clear, thus ensuring that the customer service that is provided is satisfactory, keeping the customers loyal. It will focus the company and make sure that any internal processes will be constantly striving to meet these commitments.
• Creates Performance Indicators:
  Another advantage is that an SLA will make the performance indicators very clear. These indicators are essentially benchmarks that need to be met in order for a company to find its customer service satisfactory. By using an SLA, the indicators will be set so that they are both clear and measurable, making it easier to tell if a company has met them.
• Sets Clear Penalties Should Expectations Not Be Met:
  Another reason why SLAs are important is because they set very obvious penalties if the expectations of the customer or the company should not be met. For example, an Internet provider will not charge a customer for any days in which Internet service was not available and efforts will be made to immediately solve the problem. If the customer does not pay the requisite amount of money, then the services will be shut off.

By using an SLA, it is possible to clearly define the parameters of a relationship between a service provider and customer, ensuring that the services are received and paid for smoothly. It’s important to note that if you don’t have some type of SLA management setup in place, you may not be able to make a valid claim against your web host because you might not be able to prove when your site was down, and when it was up. In this situation, you might have to go off of their metrics, which may not line up with how much your site was actually down. While this isn’t required, it’s certainly something to think about in terms of running a website and holding a web host accountable.