What Is A maintenance Service Level Agreement And Why Should Tradesmen Care?

By Cristina Maria

Posted On: Posted In: Management

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Tradesmen like to argue about things. Which truck is the best, which work trousers have the softest knee padding, and other very important matters like these. However, we’ve heard no one arguing that they’re not looking to grow their business and make more money. 

Now, there are many ways to do that, but one certain method is to mix your private customer business with some commercial contracts. Since nothing worth having is ever easy, there are some tricky parts when it comes to working on service maintenance contracts. 

While we’ve already covered how to win maintenance contracts extensively, we’d like to take some time and talk about service level agreements, an integral part of maintenance contracts and one of the all-important methods of helping you secure more money. So, without further ado, let’s get started!

What is a service level agreement for maintenance specialists?

Why should a tradesman or field service manager care about a maintenance service level agreement?

What happens if you breach a service level agreement? 

How to prevent breaching a maintenance service level agreement?

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Let’s get started! But first, if you just want your free editable spreadsheet and guide, click here!

What is a maintenance service level agreement?

A maintenance service level agreement, regardless of what field service specialization you are is an integral part of a contract between a service provider and their customer, where the provider agrees to a certain level of service or standard. They often come with financial penalties in case of non-compliance so they’re definitely no joke, especially for a growing company. 

Simply put, let’s say the field service company stated in their property maintenance contract tender that downtime on an appliance will not exceed 8 hours, the service level agreement is what compels them to keep their promise and send a tech to fix it within the allotted time, saving the property managers a lot of headaches. 

Why should a tradesman or field service manager care about a maintenance service level agreement?

Tendering for maintenance contracts is a complex process, but the gist of the matter is that every property manager and commercial customer is looking for a company that can prove their reliability and is willing to take as much of the responsibility off their shoulders as possible. 

More so than low prices and business-killing discounts, proposing a convenient service level agreement can show potential customers how good you are at preventing appliances from breaking down. Moreso, you can also demonstrate how quick you are at reacting in an emergency repair situation. 

From this, you can also demonstrate that regular maintenance can save them from expensive asset replacements and will  keep their business from functioning by reducing the likelihood of an asset failing. Together, these points can win you profitable maintenance contracts. 

This is your chance to use previous statistics from your other work in order to show that your service level agreement proposal is not just empty words, and you’ve got the service track-record necessary to support it. 

One particularly good way to leave competitors in the dust is being able to figure out and then present your past compliance rate. This can give you a huge advantage over other field service companies who don’t have this information or aren’t willing to share it. 

If you can demonstrate that your business has a history of completing service level agreements consistently, with a solid track record indicating as few breaches as possible (ideally 0), you’re far more likely to impress, and win more contracts. 

What happens if you breach a service level agreement? 

Investing in new resources like technicians, tools, and software can seem like a big expense and it’s normal to think that once you’ve won a commercial contract, you’re set to laugh all the way to the bank. But that sweet advance pay you’re too busy counting can easily be absorbed by the costs of not being able to comply with service level agreements. This is also why you shouldn’t make claims that are too lofty when tendering for contracts, aside from, you know, a basic sense of honesty. 

If you want to get an idea of how much breached maintenance service level agreements can cost, just imagine a situation where you were due to service an elevator but forgot about it and there wasn’t anything there to notify you. Not only will your customer likely terminate your contract if the elevator malfunctions and someone gets stuck in it, but they will also sue you for a lot more than the few hundred dollars you would’ve had to invest in improving your resources. 

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Learn more about how to use an appointment reminder software for servicing and maintenance

This might be an extreme situation, but every breach comes with a penalty. 

Often, it’s the cost of downtime that the customer suffers. For example, if a restaurant can’t open because its ventilation system doesn’t work, the owners will incur a couple thousands in business losses, maybe more. If your service level agreement promises downtime no longer than 5 hours for every appliance, ventilation system included, then your HVAC company is liable to cover the restaurant’s losses.

Of course, losing money and losing a potentially lucrative contract is a big blow to your business. But let’s say you’ve got the cash flow to weather it; the problem is that your finances might recover, but your reputation and chances of winning other contracts in the future won’t. This is because a failed maintenance service level agreement will follow you further down the line. 

How to prevent breaching a maintenance service level agreement?

Prevention is always better than cure. This means that instead of only making a plan to deal with eventual breaches you should plan to prevent any disasters down the line. That’s why prevention protocols exist. 

The easiest method is to use a software that has visual countdowns and timers to aid your operations manager. A dedicated service level agreement feature is ideal because it offers them the option of seeing, at a mere glance, how much time they have until a breach occurs, across however many contracts you have. Additionally, there should be an option to schedule a technician who will receive an instant notification on their mobile device. 

At the same time, said software should allow you to set up notifications according to the following criteria or we guess you can MacGyver something up to let you know (although why would you?): 

  • Start of an SLA being tracked: letting an engineer know the clock is ticking.
  • SLA at 50% completion: criteria still needs to be completed, but is compliant.
  • Confirmation of an SLA being completed i.e. is no longer being tracked.
  • Confirmation of an SLA breach. This could indicate that follow-up is needed.

The Takeaway on how to write a maintenance service level agreement

It’s easy to get so caught up in the details of maintenance service level agreements that you forget the purpose behind it all: serving your customer so well that they come back to you again and again. Faster service, better prices thanks to friendly suppliers, and more accurate scheduling deadlines are all benefits that make customers happy.

If you’re just getting started with service level agreements, we’ve created an editable spreadsheet for you to give you an overview of what goes into organizing such an important part of your maintenance contracts. If the spreadsheet looks a bit overwhelming, worry not, there’s a quick and easy guide that goes with it. Download both below!

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