What Is SLA For Marketplaces, And Why Is It Necessary In Collaboration With Merchants

The growing competition in various business areas puts forward new requirements for the quality of the services provided. Reliable partner's reputation guarantees stable and long-term relations with clients likewise provides a constant number of orders essential for business existence.

At the same time, a business based on interaction with different suppliers and contractors may directly depend on their work quality. For example, if aggregator's taxi service vendors or food delivery supply low-quality assistance that leads to customer dissatisfaction, the end customer will prefer one or two companies to collaborate with even with higher market prices.

Nowadays, most clients study business information at first and only then purchase or use offered services. If many reviews are negative, it will reduce the platform's attraction even when problematic issues are not related to the platform itself but its contractors.

Such dependence on partners' service quality is critical for marketplaces, online catalogs, and other advertising and information platforms that help find other companies' services. For this reason, the above companies need some protection.

SLA: how to negotiate the quality of service before cooperation

SLA is an important document that regulates the vendor and the marketplace relationships (Service Level Agreement). It prescribes indicators, criteria of assessed service, and protective methods applicable in case of rules' violation. The main advantage of SLA is the legal remedies that will be imposed on the service providers. It allows to defend the marketplace platform from unscrupulous vendors and keep a reputation as a reliable platform for potential buyers and future sellers.

The SLA is the primary document in the legal relationship between the marketplace platform and the seller.

The main purpose of SLA is to define the desired level of service and register penalties that will be applied if this level is not achieved. In other words, SLA describes what one party wants to get from another and what happens if the desired is not received.

What should be mentioned in SLA

The document must describe the provided by the partners' services and indicate the criteria of their quality.

SLA should contain clearly indicated services which the customer, the contractor, the aggregator platform, the marketplace, or the IT customer expect to receive. Moreover, this document precisely defines which parameters (metrics) need to be monitored. A large amount of monitored parameters is a risk that in working with SLA, you can get lost and not follow the performance of this agreement. This means that in the future, all monitoring systems can work ineffectively and that further service will worsen. However, there is also a risk while using few metrics. In addition, you can set unachievable for some parameters criteria.

Basically, SLA is a number of target metrics or their boundary meanings, which should determine the quality of services provided.

SLA metrics should be understandable and measurable, displaying the quality of service and depending only on the contractor. For example, the "service quality" indicator may be universal if it has several parameters. Among them are a share of abandoned carts, a percent of refusals, and customer satisfaction after making a purchase. All these indicators can be part of the service quality, but none is universal or depends only on the performer. It might be worthwhile to apply the average of several parameters in cases like this. Or set marginal indicators for each metric. For example, the failure rate is not higher than 50%; the share of abandoned carts is not higher than 40%. Also, in SLA can be specified other marginal indicators which can affect the work of service. For instance, a customer's request response should not last longer than 15 minutes per working day if the number of simultaneous calls doesn't exceed 20 per hour or 150 during the work hours of a typical day. Such marginal indicators will help metrics to be realistic and achievable.

Activity in interactions with customers is a more straightforward and more measurable criterion. For example, in SLA, you can specify that responding to the buyer's request should not exceed 30 minutes. However, for such metrics, you should indicate different values for different conditions. For instance, demanding a seller to respond within 30 minutes on holidays or weekends may be impractical.

When choosing metrics for tracking and including in SLA, it's necessary to ensure that the service provider controls them. For example, declaring the delivery for the "next day," the seller may not fulfill this requirement because it's not always his responsibility (he could fail because of the logistics company that promised to deliver goods within 24 hours). On the one hand, the seller didn't fulfill his obligations, letting the buyer down because he needed the goods just the next day. On the other hand, the seller cannot influence the speed of the delivery operator, except that using the service of their competitor the next time.

One more important SLA aspect is notifications about the time allotted to the contractor for making changes in their work and the sanctions if there are no changes. In SLA, the ending of cooperation with companies whose quality of service is inappropriate according to the platform demands can be mentioned. However, you shouldn't stop working with them after the first misconduct. But, in case of systematic non-compliance of rules, the contractor should be aware that he will be blocked, and all relations will be terminated.

SLA: informing and changing

Usually, an active Internet user doesn't read offered him "User Agreement." Moreover, he can disagree with the conditions of provided services, but he won't get the service either. That is why, SLA agreement also can become the victim of an inconsiderate "OK" click, confirming agreement with the document, but not meaning that it has been studied.

For this reason, it is worth being concerned that business contractors are familiar with SLA and read its contents. Accordingly, the SLA document should be written in straightforward language, excluding ambiguity in its understanding. The document should state what data of the contractor company's activity are analyzed, how this happens, and what sanctions will be applied to provide poor quality service. In addition, it is worth placing links to other important documents in SLA. For example, it can be an agreement with the user and platform's or aggregator's obligations with clear metrics. In such a document, the link to a guarantee of service availability 99% of the time and the possibility to get technical advice 24/7 will be critical.

SLA can be changed, which is important in our dynamic times when conditions of running business, regulatory requirements, and user preference change. It is difficult to predict the periods of its changes, but it's necessary to monitor and add them if needed once a year. You also need to notify the contractors if your SLA has changed, possibly limiting the amount of time for reading its new version.

Would you like to find out more about transformation into marketplace? Please fill in the form and our team will respond to you shortly.