Contract Renewals. Do You Know What You Need To Know?
April 12th, 2010 by clmmatrix
With the average Fortune 500 company managing 20,000 to 40,000 contracts, we suspect renewals are a point of interest — whether with clients or suppliers.
The renewal of a contract can be every bit as much work as the original. In fact, it may even be more challenging as both parties have experienced each other for some time now. It’s like dating and marriage. You just tend to do things differently. For some (both companies and their clients), it can turn into the “if I only knew then what I know now” syndrome.
How did your Q1 renewals go? We already know your clients waited until the last minute to see what deals you’d give. And you probably waited until the last minute to see what your suppliers would do. But other than the implicit negotiating power of limited time, how did you do?
If your company is managing numerous contracts, it’s a fair guess that you don’t have intimate knowledge of each relationship. Your largest clients, yes — others, not so much. When it comes time to renew the contract, what allies do you have? What intelligence do you have that allows the negotiation to go smoothly and profitably? Can you remember what happened last time? Does the current contract reveal any secrets that will help you during this negotiation?
Can you look back into the past and see the points of contention that existed last time? What were the back-and-forth negotiations that resulted in the current contract? Would any of those help you today?
If your contract renewal process is one in which you pull the old contract out of a folder at the 11th hour and initiate the negotiation, you are disadvantaged. If you don’t have a system that allows you quick, uncomplicated full visibility as to the entire lifecycle of that contract, you are disadvantaged. Who knows what you’re leaving on the table.
Business intelligence can influence expectations as well as confidence. It also provides you with a sense of reality that is quite advantageous.
If you’d like you’d like more a more profitable renewal process, then join us on the third Thursday of every month for our Matrix Software renewal power show. Click here to RSVP. There is no cost or obligation to you. We just want you to Harness the Power!
