What are Service Credits?
Service credits in the context of
email marketing are compensations provided by an email service provider (ESP) to a customer for any service disruptions or failures. These disruptions can include downtime, delivery failures, or performance issues that do not meet the agreed-upon
Service Level Agreement (SLA). The credits are usually applied to future invoices, effectively reducing the cost of services for that period.
Why are Service Credits Important?
Service credits are crucial for maintaining
customer satisfaction and trust. They serve as a form of accountability, ensuring that the ESP is committed to delivering high-quality service. If the provider fails to meet the agreed standards, service credits offer a tangible form of compensation. This can help in retaining customers and mitigating potential losses.
How Do Service Credits Work?
When an ESP fails to meet its SLA, the customer can submit a claim for service credits. The process generally involves the following steps: The customer identifies a service disruption or failure.
The customer submits a claim to the ESP, usually through a
support ticket or a formal request process.
The ESP reviews the claim and verifies the disruption.
If the claim is valid, the ESP calculates the service credits based on predefined criteria in the SLA.
The credits are applied to the customer's account, typically reducing the cost of future services.
Common Scenarios for Service Credits
Service credits can be issued for various reasons, including: Downtime: When the email service is unavailable for a significant period.
Delivery Failures: When emails are not delivered as per the SLA.
Performance Issues: When the service does not meet the performance metrics such as email open rates, click-through rates, or response times.
How to Calculate Service Credits
The calculation of service credits is usually outlined in the SLA. Common methods include: Percentage of Monthly Fees: Service credits may be a percentage of the monthly service fees, based on the extent of the disruption.
Fixed Amounts: Some SLAs specify fixed amounts for different types of service failures.
Pro-rata Basis: Credits can be calculated on a pro-rata basis for the duration of the disruption.
Limitations and Exclusions
It's important to note that service credits often come with limitations and exclusions. For example, they may not apply in cases of
force majeure events such as natural disasters, or issues caused by the customer's own systems. Additionally, there may be a cap on the amount of service credits a customer can receive within a given period.
Best Practices for Managing Service Credits
To effectively manage service credits, consider the following best practices: Understand the SLA: Make sure you fully understand the terms and conditions of your SLA, including how service credits are calculated and applied.
Monitor Service Levels: Regularly monitor the service levels and performance metrics to identify potential issues early.
Document Issues: Keep detailed records of any service disruptions or failures to support your claims for service credits.
Communicate with Your ESP: Maintain open communication with your ESP to resolve issues quickly and ensure that service credits are applied correctly.
Conclusion
Service credits are an essential component of a robust email marketing strategy. They provide a mechanism for holding email service providers accountable and offer a form of compensation for service failures. By understanding how service credits work and effectively managing them, businesses can ensure they receive the quality of service they are paying for and maintain strong, trust-based relationships with their ESPs.