DIFM to DIY: SaaS service level agreements 101 (Updated 2023)By Leanne Johnson
When it comes to creating a service agreement for your new clients, there are three broad service levels you can incorporate: Do It Yourself (DIY), Do It For Me (DIFM), or Do It With Me (DIWM™).
How should you go to market with SaaS solutions? Read our report “the full-stack tech-first future” to find out what small businesses want, need, and expect.
With so many options available, it can be hard to choose which is right for your small and medium-sized clients. There are benefits to each method, depending on the circumstances of their business. By the end of this article, you’ll know exactly what each SaaS service level agreement means, what to include in yours, and how to decide which one to use.
Table of Contents
- What is a service level agreement?
- What to know about SLA pricing
- Service level agreement examples
- Final thoughts: DIFM vs DIY
What is a service level agreement?
A service level agreement (SLA) is an important contract between a service provider and their customer, delineating the standards of service that the customer can expect if they enter into a business relationship with the provider. This key document acts as a safeguard for customers while outlining the responsibilities of the service provider.
When it comes to businesses selling software as a service (SaaS), a robust SaaS SLA ensures that the client’s interests are protected while also setting clear expectations on both sides. SaaS SLAs become especially important for agencies selling at different service levels, such as do it for me (DIFM), do it with me (DIWM), and do it yourself (DIY). A well-defined SaaS SLA will make it crystal clear for both parties if the service provider shoulders more responsibility for a given service, or if the buyer is to use a solution on a DIY basis.
In short, SaaS service level agreements ensure both parties in a business relationship are on the same page.
Key components of a SaaS SLA typically include:
- Definition of services to be provided: This section clarifies the specific services that the provider will deliver, such as software maintenance, customer support, ad campaign management, or reputation management.
- Performance metrics to be tracked: Defining key performance indicators (KPIs) enables the customer and service provider to measure the effectiveness of the service based on agreed-upon metrics. These might include uptime and downtime percentages, speed, and response time for addressing issues or answering questions.
- Key responsibilities: Both customer and service provider obligations should be outlined. For example, the provider might be responsible for maintaining service availability, but the customer might be expected to follow data security protocols.
- SLA pricing: The SaaS service level agreement should detail the pricing model, including fees for all provided services, penalties for violations, and potential discounts for customers who exceed certain usage thresholds.
- Protocol for dispute resolution: This lays out the procedures for resolving disagreements regarding service quality, SaaS SLA breaches, or any other conflict that might arise between the provider and customer.
- Termination clause: The SaaS SLA should outline the terms under which the customer or the provider can end the agreement.
What to know about SLA pricing
SLA pricing is one of the most important components of any SaaS SLA. Getting it right can ensure that your clients are satisfied and feel they’re being treated fairly, while helping you hit your reseller target margins.
While all SaaS service level agreements need a pricing section, in the context of a DIFM or DIWM setup, SLA pricing is particularly significant since the service offering is more complex, leaving more room for confusion compared to DIY business SLAs.
The SLA pricing in an agreement hinges upon the scope of the services to be provided, their quality, and the level of support required by the client.
Here are some helpful concepts to know when determining your SLA pricing:
Fixed pricing component
SaaS SLAs may have a fixed fee, or a set amount paid monthly or annually for the service. This generally includes agreed-upon services and support levels. When considering DIFM vs DIY, it’s more likely for DIY businesses to have fixed fees in their agreements. However, DIFM and DIWM businesses may also have fixed components of their pricing.
Variable pricing component
Some SLAs might use a pay-as-you-go model, where the price depends on the actual usage or demand for services. This is common in cloud-based SaaS offerings, for example.
Penalties and credits
SLA pricing may also incorporate penalties for service providers not meeting agreed-upon service standards. These typically take the form of credits for customers that can go toward future bills. They may also take the form of free future services.
Depending on the SaaS product being sold, it may be the case that customers sometimes require a higher service level than usual. A robust SLA pricing section should outline the additional charges that a customer might incur if they exceed the agreed-upon service or support levels.
Businesses are ever-evolving, and it’s normal for clients to require periodic changes to their service level. SLA pricing often includes review clauses, allowing for adjustments based on evolving business needs.
Service level agreement examples
To appreciate the variations of service level agreements in action, let’s take a look at some examples representing three business models: DIFM, DIWM, and DIY. Each model requires its own considerations when it comes to creating a SaaS SLA, aligning with the differing levels of service engagement and customer involvement.
DIFM, or Do It For Me, is a service model designed for clients who prefer a totally hands-off approach. In this setup, the service provider takes full charge of the software solution—from implementation and configuration to ongoing operation, maintenance, updates, and troubleshooting.
This model caters specifically to businesses that may not possess the in-house technical know-how or resources to manage their software solution effectively. With a DIFM service level, clients can access a comprehensive solution, allowing them to focus on their core business objectives.
In the SaaS context, the DIFM model is a particularly attractive option for clients with the budget to outsource some of their services. Given the increasing complexity of many digital marketing solutions, especially at an enterprise level, businesses can lean on their SaaS provider’s expertise to ensure their solution is always up and running and fully optimized.
In short, the meaning of DIFM is full-service software management with the promise of high-level expertise and a commitment to customer success.
A DIFM service level agreement example might be a restaurant outsourcing its digital marketing to a SaaS provider. The owners and managers are too busy focusing on the demanding reality of running a restaurant and don’t have time for marketing tasks.
The SaaS SLA can detail services like:
- Content creation
- White-label SEO
- Social media management
- Email marketing
- Digital ad management
All of these would be delivered and managed entirely by the provider.
The performance metrics might include the ranking of SEO keywords, growth in social media following, and click-through rates of email campaigns.
The service provider in this example is held accountable for maintaining these standards, and credits might be granted if targets aren’t met. The SLA pricing would be fixed, with an overall fee covering all services, and potential additional charges if the client requires services beyond the agreed scope.
In a DIFM SLA, the responsibility for achieving results primarily rests with the service provider, aligning with the DIFM meaning of offering a comprehensive, hands-off solution for the customer.
DIWM, or Do It With Me, is a SaaS service level agreement model that fosters a cooperative relationship between the service provider and the customer.
Contrary to the DIFM approach where the service provider shoulders most or all of the responsibilities, DIWM involves an active partnership. The service provider offers their specialized expertise and support, while the customer actively participates in the implementation and management process of the software solution.
This model can be a good choice for businesses with in-house technical skills who still value the additional guidance—and workload reduction—from the service provider. This SaaS SLA level establishes a relationship of shared responsibilities, collaborative problem-solving, and the joint pursuit of objectives between both parties. This involvement on both ends can be an effective way to foster a sense of ownership and commitment to the success of the software solution by both provider and client.
Consider a local roofing business that partners with a SaaS provider to manage its customer relationship management (CRM) system. They have been in business for a while, so they have many clients and are looking for support in moving to a digital client management system.
In a typical DIWM SLA for this business, the SaaS provider could be responsible for the initial system setup, customization, and providing expert help for complex issues. The SLA might outline that the SaaS provider will put in the work upfront to populate the CRM with all existing client data. The business, on the other hand, is responsible for managing daily operations, ensuring accurate new client data input, and performing basic maintenance tasks.
Key performance metrics in the SLA may include system uptime, response times for resolving technical issues, and measures to ensure data accuracy and integrity.
Pricing for this service level agreement example can combine fixed costs for the guaranteed services, along with variable charges that reflect the specific usage-based requirements of the business.
DIY, or Do It Yourself, is a service model where the customer independently manages their software solution. The service provider’s role is mainly to supply the software and provide some foundational instructions.
Beyond that, the customer takes the helm, overseeing the implementation, ongoing management, and troubleshooting tasks required to operate the SaaS solution. This model might be preferred by businesses with a high level of technical proficiency and who wish to maintain complete control over their software applications. It’s also generally the model of choice for smaller businesses with limited resources who want to make their day-to-day operations easier but can’t afford to completely outsource.
In a DIY model, a party planning company might subscribe to a task management SaaS tool to help them stay on top of the lengthy, complex to-do lists associated with their business.
The company undertakes the complete setup, configuration, user management, and daily maintenance of the software. It also takes responsibility for problem-solving and addressing any software issues.
The service provider, in this case, ensures that the software is accessible and functioning as promised, but most responsibilities rest with the company using the software. This service level agreement example may include performance metrics such as software uptime and resolution time for reported software bugs.
SLA pricing in this model usually involves a simple, often tiered, subscription fee that’s determined by the range of features the company opts to access. Potential additional costs may apply for accessing premium features or acquiring extended support services.
Do It For Me options are great for business managers and owners who keep very busy schedules. They may not have the time to invest in managing their digital solutions. This option is also a great choice for businesses that may not be familiar with the complex range of digital marketing software available to help them maximize their business growth.
This option is more costly than DIY, but it provides customers with access to skilled professional support without having to splurge for, say, more full-time staff.
SaaS SLA: Pros and cons
The DIFM service model is a comprehensive approach that offers several key advantages for both SaaS providers—agencies like yours—and for clients.
- Convenience: Since SaaS solutions are fully managed in a DIFM model, it’s by far the most convenient option for businesses lacking technical know-how, resources, or time to manage their SaaS solutions.
- Greater control for agencies: When selling DIFM vs. DIY, agencies have control over how SaaS solutions are being implemented. This gives the greatest control over outcomes, enabling the agency to deliver results they can be proud of.
- Optimization: Since knowledgeable experts handle the management and implementation of SaaS solutions in a DIFM model, the solutions are most likely to be optimally set up and fine-tuned to meet the client’s specific business needs.
- Time-saving for clients: With DIFM, the SaaS provider takes the helm, giving clients the freedom to focus on other aspects of their business. Instead of diverting resources and attention to manage a complex software solution, they can entrust it to the experts.
- Top-notch support: The DIFM model offers the most robust support, ensuring that any technical issues that might arise are addressed promptly, minimizing downtime and its associated costs.
- Maximum agency revenue: As the most complete SaaS SLA, DIFM also generates the greatest revenues for agencies. With this model, it isn’t just SaaS programs that are being licensed for a fee, but also the labor required to manage those solutions.
Despite its many benefits, the DIFM model comes with some potential drawbacks.
- Prohibitive pricing: This model tends to be more expensive due to the costly services offered. Businesses with limited budgets might find this cost-prohibitive, making it a less viable option for them.
- Less control and ownership for clients: the DIFM model can lead to a sense of loss of control over the software application since most of the management is outsourced. Businesses with specific customization needs or ones that prefer hands-on involvement may find this a drawback.
- Greater risk for clients: A high level of dependence on the SaaS provider can be risky. If the provider fails to meet their SLA obligations, it can cause significant disruption to the client’s business.
Do It With Me is a hybrid of DIFM and DIY. Digital agents can regularly support clients in the management of their digital solutions, without taking total control.
DIWM is the perfect option for clients who are hands-on, but have concerns about neglect when they get busy or just require extra support to manage things.
SaaS SLA: Pros and cons
- Shared responsibility: The DIWM model offers a middle ground between DIY and DIFM, taking a cooperative approach to SaaS management. Here, the service provider works in tandem with the client, offering expert guidance while the client maintains an active role in the management of the software. This shared responsibility means that the client can have some degree of control while also benefiting from the service provider's expertise. It allows for the exchange of ideas, collaborative troubleshooting, and a shared commitment to the software solution’s success.
- Flexible pricing: This setup also tends to offer flexible pricing models, combining a fixed base fee with additional costs based on the specific services used. This hybrid model can cater to businesses with varying needs and budget constraints. It also makes it easy for businesses to adjust their service usage to demand.
- Client knowledge limitations: While it provides a balanced approach, DIWM still requires the client to have some level of technical knowledge and resources. Businesses lacking these may struggle to effectively manage their part of the agreement.
- Require more time from clients: Active participation in managing SaaS solutions can be time-consuming for clients. If not managed well, this can lead to their resources being stretched thin, potentially affecting KPIs.
- Complex division of labor: Because responsibilities are shared in the DIWM model, crafting the SaaS SLA can be more complex. This requires careful negotiation and mutual understanding to clearly define what falls under the client’s and service provider’s respective purviews.
The hashtag DIY is everywhere on the internet these days, so it’s only appropriate that it’s an option for a business’s digital marketing as well.
Do It Yourself is an option that’s best for managers and owners who are hands-on with their business’ marketing efforts. They want to be involved with the solutions they use and have the time and capacity to do so effectively. This option is also the most cost-friendly option for businesses, with the only costs outside of the white-label digital marketing solution being time and effort.
SaaS SLA: Pros and cons
- Great for tech-savvy clients: The DIY model is an appealing choice for businesses with a high level of technical proficiency. This model offers them maximum control and customization. Since the business manages the software, they can tweak it to align precisely with their needs, without having to negotiate changes with a service provider.
- Sell to budget-conscious clients: DIY SaaS SLAs can be more economical. Since they typically only cover the provision of the software and basic support, they tend to be cheaper than DIFM or DIWM models. This enables agencies to sell to a wider pool of prospective clients.
- Less liability for agencies: Since the DIY model reduces dependence on external service providers, clients are ultimately responsible for meeting their goals. Some clients may prefer this internal control, and agencies can enjoy the lack of liability if clients don’t use their SaaS solution effectively.
- Clients require expertise: DIY businesses need a substantial level of technical knowledge to manage their solutions effectively. A lack of expertise can lead to sub-optimal utilization or mishandling of the software.
- Resource-intensive for clients: Managing a SaaS solution in-house can be demanding. This can lead to diverting resources from other core areas of the business, potentially impacting overall productivity.
- Less support: The support level in DIY business SaaS SLAs may be lower than with DIWM or DIFM models. This could lead to longer downtimes if the business lacks the necessary skills to resolve issues quickly.
Final thoughts: DIFM vs DIY
DIFM and DIY service levels both have their place, and by offering clients a choice, you can increase your chances of successfully selling to a wider range of businesses. It all comes down to understanding your client’s technical prowess, resource availability, and business objectives.
By aligning your service offerings with these factors, you can deliver a tailored solution that meets their needs and fosters a productive, long-term relationship, enhancing your agency’s growth.