Home – New Forums Marketing mastery Do I increase my pricing under a SLA

  • This topic is empty.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • #979122
    Geronimo
    Participant
    • Total posts: 237
    Up
    0
    ::

    I’ve been asked by a client to provide a service level agreement (SLA), with regards to response times when some of their internal systems have issues, or need enhancements/upgrades

    It’s a long time client, and I have very good history with them. The _want_ me, as they know that jobs will get done well, first time.

    My question really comes down to pricing though. Do I increase my hourly rate because of the increased level of service expected under the SLA? Any thoughts on what percentage loading if any?

    any experiences or thoughts would be appreciated.

    #1112056
    Divert To Mobile
    Member
    • Total posts: 2,751
    Up
    0
    ::

    How much to charge depends on how much you are willing to work for.
    An SLA has benefits that go both ways. For instance it locks them in to using your services for the contract period and adds value to your business for when you want to sell. Another benefit is the complete understanding of what services you are responsible for and the mutually agreed level of service you will be providing. (SLA)

    Steve

    #1112057
    Geronimo
    Participant
    • Total posts: 237
    Up
    0
    ::

    Let me simplify my questions.

    I usually charge $a for work.
    If I provide an SLA, would it be reasonable to charge $a X b? Where “b” could be 10/20/30%?

    An SLA doesn’t tie them to having to use my services. It simply says that if they want me, they will get premium response.

    #1112058
    John C.
    Member
    • Total posts: 439
    Up
    0
    ::

    An SLA in itself doesn’t say anything, other than you have some sort of agreement related to service. What you put into the SLA dictates the terms of that agreement (agreement being the key word here – both parties need to agree!).

    Are your customers asking you to provide service above and beyond what you currently offer them on your ad-hoc rate? If so, then a price increase would seem justified.

    If your average time to respond to a customer incident is currently 6 hours, and your customer wants you to guarantee that you will respond within 2 hours, then obviously you need to look at how you would meet that expectation. Do you need to put on more staff? Do you need to take on less ad-hoc work from other clients?

    Of course if your customer simply wants an SLA because they’ve heard it’s a good thing to have in the filing cabinet, or to enable them to comply with an audit requirement, and the specifics about response and recovery times are unimportant and not above what you currently offer, then no price increase is justified really.

    There is no simple formula I’m afraid.

    Cheers,
    John

    #1112059
    SmartBizBlog
    Member
    • Total posts: 101
    Up
    0
    ::

    Don’t forget to factor in their PITA rating into pricing (Pain In The Arse). You should have a good feel for them by now, especially if they want an extended SLA, so add a percentage relative to how much of pain you think they’ll be.

    #1112060
    TehCamel
    Member
    • Total posts: 873
    Up
    0
    ::

    this is something i’m thinking about and looking at atm.
    I don’t currently have an SLA with any of my clients.

    I’m considering offering it as a “value add” – same price per hour I currently charge, but they would have to pay a small fee to get the SLA enabled.. regardless of whether they actually use any time that month.

    #1112061
    Chris – Marketing
    Member
    • Total posts: 162
    Up
    0
    ::

    with the SLA’s I write I always add a clause that charges for call out (in) and nominate times where the hourly rate changes. for example after 6pm 50% higher, after midnight 100% higher. You will have to pay your staff penalties so it must be incorporated in your rates.

    Cheers
    Chris Poulios
    http://www.satisfaction-marketing.com.au
    http://www.webthreads.com.au

Viewing 7 posts - 1 through 7 (of 7 total)
  • You must be logged in to reply to this topic.