We all know the value of a good contract, one that holds a customer to a solid, long-term business commitment. Getting a contract signed is therefore an important part of sales rep’s job.
Five Tips that Work!
- For a new customer, agree to hold prices firm for a year if he or she will sign a five-year contract.
- For an existing customer whose contract is about to be renewed, offer this option: an increase in price each year with no contract, or, a firm price each year with a five-year contract.
- For a long-time and valued customer, offer a price rollback for signing a multi-year contract.
- Highly sophisticated accounts often prefer to operate with contracts. You might suggest to the decision-maker you are working with that top management would be impressed by his forethought in getting contracts implemented.iH
- In accounts where you have excellent relationships in place, you might suggest that a contract would protect both companies if either experienced an internal change.
Best Practices to Remember (when negotiating)
- On a sales call, when confronted with a client who is locked into a deal with another company, always ask when their contract is due for renewal. Return two months before that date to remind the customer that the contract is due and ask if you can submit pricing. This demonstrates your determination to service that customer and tends to impress most decision-makers.
- Always ask to see competitive contracts. Customers often will let you review their contracts and give them your advice. Be aware, most contracts have an “evergreen clause,” meaning cancellation notification must be given by a set time prior to the anniversary or the contract automatically renews for another term.
- I also find it is good practice to give your customer an opportunity to renegotiate if they feel an existing contract with your company is one-sided. Remember, “You can get to the top by getting to the bottom of things.” Find out what the issues are and address them. A contract review generally yields greater customer satisfaction and sets you up for more opportunities going forward.
- Finally, always start the day by thinking about getting a contract signed. That way you will not return at day’s end empty handed!
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