Companies Move Beyond KPIs and SLAs Toward XLAs
As contact centers integrate the most modern technologies into their operations, most still grade success using legacy metrics like speed to answer, first-contact resolutions, call deflection rates, and average handling time.
The same can be said of marketing, sales, and other business units, which are also using outdated metrics to measure their success. Revenue figures, sales volume, deals closed, click-through rates, conversion rates, customer churn, and product returns are some of their most obvious metrics. But what appears to be an excellent indicator at first glance might be a questionable indicator when one digs deeper into the numbers.
Key performance indicators (KPIs) have been popular measurements of long-term success since the 1980s because, as the name implies, they show how different facets of the business are performing. Service-level agreements (SLAs) are often used to measure the performance of outside contractors.
Customer service, sales, marketing, supply chain, product development, and other departments can each hit their specific key performance indicators (KPIs) or service-level agreements (SLAs), yet customers might still encounter friction, fail to resolve their issues or complete their tasks, or end their interactions unsatisfied. That is why in today’s experience-driven market, traditional KPIs and SLAs are no longer enough. They might track uptime, ticket resolution, and response times, but they miss the one thing that truly matters: how customers feel about the service they received. They can tell you whether a department succeeded, but they don’t tell you whether the customer succeeded.
Performance optimization today requires moving beyond basic pass/fail checkboxes. By connecting customer signals with operational and business data, organizations can see how internal performance translates into customer outcomes, making it easier to pinpoint where friction originates and create experiences that feel more seamless, responsive, and consistent.
That's where a new metric called experience level agreements (XLAs) come in.
"There is certainly a spectrum of maturing, especially among marketers and customer experience professionals about how they measure results," says Tara DeZao, a senior director of product marketing at Pegasystems. "At Pega, we talk a lot about customer lifetime value, which is more of an XLA because it measures the entire customer journey. But we still see marketers using metrics that are more short-term focused and less tied to long-term outcomes."
Traditional KPIs are sometimes vanity metrics, according to DeZao, but companies that view customer journeys on a rules basis rather than on true one-on-one customer engagement will still tend to favor more traditional KPIs over XLAs.
XLAs will use measurements like Net Promoter Scores, decision quality and relevance scores, churn rates, etc., to help companies determine how truly satisfied customers are with them and their products or services, DeZao says.
Anne Falcon, vice president and CX transformation leader at business transformation services and consulting firm MCA Connect, says that the quick evolution and use of AI has driven more companies to look for XLA measurements, which can show whether companies are delivering "a completely different customer experience," something that KPIs and SLAs can't do on their own.
She adds that more companies are seeking CRM systems that offer more granular customer satisfaction measurements and have the necessary customer intelligence and agentic orchestration capabilities.
"I've seen a lot of companies moving past the KPI and SLA format and moving more toward the XLA," adds Josh Hart, principal with workplace consulting firm Joshua Hart Consulting. "XLA gives you a more complete story of what's actually happening and gives you a better return. KPI gives you the metrics of a campaign [in marketing], and SLA can confirm whether you've completed what the proposal or contract said. XLA focuses directly on the consumer and how the user actually experienced the campaign, which is far more beneficial."
He points out that hotels, for example, will have a plethora of KPIs related to their guests' stays, but XLAs provide the additional measure of whether guests were satisfied.
Hart advises firms to request random feedback from customers. Such an approach will help them re-prioritize their focus from short-term KPIs to longer-term XLAs.
However, Hart cautions that customers should be asked for satisfaction feedback, with both answers to direct questions (how was your room?) and the ability to add other, open-ended comments immediately after service was provided to get a higher number of responses and more complete responses. Feeback requests sent later tend to get less accurate responses.
Hart adds that while not strictly an XLA, companies that want to improve their performance should also focus on employee experience as well as CX. Employees who feel valued will provide better customer service, which will show up in XLA scores and improved business results.
As an example, he cited an advertising agency where high account manager turnover contributed to client losses. "Better relationships helped clients feel understood and made them more receptive to recommendations such as increasing ad spend by 15 percent."
XLA Critics Speak Out
However, not everyone is sold on the change in the ways to measure success.
<"Organizations should refrain from transitioning from KPIs and SLAs to XLAs," says Pratik Mahajan, a senior data analyst at JPMorganChase. "They should establish a measurement hierarchy that establishes a connection between all three."
KPIs provide information regarding the events that transpired. SLAs indicate whether a specific commitment was fulfilled, Mahajan explains. "The significance of this distinction is that a dashboard may appear entirely green, yet users may continue to experience frustration. Even if service meets its response-time objectives, the underlying issue may still require multiple handoffs or repetitive interactions before it is resolved."
Mahajan adds that determining whether a customer issue was actually resolved is significantly more challenging, resulting in a bias toward what is readily quantifiable rather than what is truly significant. And with XLAs, "an experience score that is affixed to an existing SLA report is a rebranded satisfaction survey, not a new measurement layer. The insight remains unchanged if the underlying instrumentation does not change."
Jen Schoell, vice president of global customer experience at marketing performance measurement company Branch, has seen a little more enthusiasm for XLAs than actual enterprise adoption. At the same time, though, she also sees that "most companies are asking whether the things we're measuring actually tell us whether the customer is successful. I have yet to hear of organizations transitioning to XLAs alone, and the hype leaves me with more questions than answers about how to accurately measure someone's experience at scale.
"An experience, taken at face value, is highly personal," Schoell adds. "What immediately pops into my brain are the funny reviews of America’s national parks. Someone visits the Grand Canyon and leaves a review that basically says: 'A hole, a very large hole.' Am I counting on my renewal based on that type of experience?"
She also maintains that KPIs, SLAs, and XLAs measure different things at different depths. "Understanding the actual customer experience is always the goal, but if the output is an easily trackable number to replace KPIs and SLAs, we're probably not actually understanding experience well enough to change what we do," she states.
"Experience is definitely an input that we should be taking into consideration, via customer satisfaction surveys, pulse checks, usage patterns, support tickets, bugs, product requests, etc. All of this feedback is critical," Schoell continues. "I just wouldn't put my renewal on the line based on an XLA.
"What I would lean toward instead is an outcome-based agreement. Understand what the customer hopes to accomplish, agreeing on milestones and associated success metrics, to incorporate the customer experience throughout the journey. This collaborative, data-driven approach ensures experience is at the heart without becoming a hindrance," she says further.
Which Measurements Take Priority
Truly many companies today are starting to use a blend of KPIs, SLAs, and XLAs to determine success with customers, according to DeZao, who favors different measurements depending on the industry where companies compete.
"Customer expectations are constantly ascending," DeZao says. "When you don't meet those expectations, it shows up in your churn and NPS. Those that are looking at the holistic customer journey and have regulatory pressure—financial services, for example—are going to have more of a holistic measurement strategy than a [consumer packaged goods] brand."
CPG brands might favor KPIs because they have little, if any, first-party data, according to DeZao. Additionally, they are most interested in moving product, so SKU inventory increases and decreases and similar measurements will take priority, she explains.
"The toothpaste that you buy is transactional, whereas where you get your mortgage and have all of your financial assets is more of a relationship-based transaction," DeZao says.
Falcon adds that manufacturing companies have also been generally slower to prioritize XLAs because those firms are more focused on operations and internally focused cost-efficiency KPIs.
Even DeZao notes that the trend is integrating more XLAs into the mix of success measurements, while KPIs still remain extremely important.
SLAs tend to be technical benchmarks that apply to certain channels, such as the contact center, whereas KPIs and XLAs apply to the entire customer journey, she says. "Where you are in the customer journey will determine which of those measurements you will use."
And then outsourced contact centers, marketing agencies, and related businesses will prioritize SLAs as measurements of success. Those firms are often under contractual agreements regarding outcomes.
Another determining factor in how companies measure their success is their level of artificial intelligence maturity, according to DeZao. "Brands that have a high level of maturity for AI adoption are more apt to combine multiple kinds of measurements as part of their success strategies vs. more traditional companies that are living paycheck to paycheck on their measurement results."
DeZao adds: "The further along that you are in being able to deliver dynamic, AI-powered customer journeys and one-on-one customer engagement, the more likely you are going to be to measure in a more holistic way. If your data is siloed, if you are doing blast and batch marketing, you're more likely to be sticking to traditional KPIs because you have silos and you can't really measure customer journeys in a traditional way."
Phillip Britt is a freelance writer based in the Chicago area.He can be reached at spenterprises1@comcast.net.
BCN Sees XLA as a Differentiator
BCN, a telecommunications company that has been providing technology and communications solutions since 1994, is among the organizations changing the metrics on which it relies to determine customer success, moving from traditional key performance indicators and service-level agreements to experience-level agreements, which it sees as a differentiator in its market.
"I am not suggesting that an experience-level agreement replaces an SLA," says Jeanne Duca, chief marketing officer at BCN."An XLA is something that has to work in tandem with an SLA."
Traditional metrics give an indication of how technology is performing from the standpoints of uptime, response time, resolutions time, and other operational factors. For companies like BCN, XLA measurements are a better indicator of whether the company delivered on customer promises, Duca explains.
"An XLA can help us understand whether the customer experienced the value we intended to deliver. We could meet every contractual metric and still disappoint the customer," she says.
Whereas SLAs will show whether service providers like BCN performed as expected and met deadlines, they don't show whether the service was provided in such a way that the customer feels valued—a major determining factor in whether the customer will return.
"XLAs help us understand if we are really doing the best we can for the customer and how they feel about doing business with us," Duca explains.
BCN is currently looking at agentic artificial intelligence to further strengthen its XLA initiatives, which Duca says could be a real differentiator in its market. "We probably have five key competitors. We don't necessarily offer anything different than what those competitors offer. We may have better access to a couple of carriers, but we basically all do the same thing. What we pride ourselves on, and the reason we believe we are in such a strong position, is the way we do business.
"Customer experience is something that we've been very focused on for the last six or seven years—making it part of our vocabulary inside the company, having it embedded in our mission statement and our core values. It's a natural progression of that focus that led us to have these discussions about XLAs," she concludes.