Last updated on February 3rd, 2020 at 02:47 am
Depending on your business model, your sales team may rely on pre-printed or pre-approved contracts to close a deal. In cases where a “normal” sale occurs, your team members might even be permitted to skip the sales approval process. But even in the most permissive business environments, there are always customers who don’t fit into the nice, convenient box as an “average customer.” They might want to adjust financial or legal terms in a contract or adjust the length of the contract. Going outside your standard terms can get you more business. Building out these processes ahead of time can simplify the work and ensure the deal is still a net win for your company. In fact, standardizing your negotiation process is one of the most important steps in our comprehensive guide to reducing contract processing time from sale to signature.
Below we present some of the common risk factors associated with dealing with customers who have special requests. We also suggest some actionable steps you can take to streamline the process.
Don’t Let Individual Inconsistencies Become Unmanageable
When salespeople must deal with special requests outside of standard contract terms, they risk creating inconsistencies. “Special treatment” can help create customer loyalty and ensure contract renewal, but too much variation can hurt your business. Abnormal terms create abnormal risks, and one-off allowances can become impossible to monitor. This is especially important when salespeople are not assigned a specific area or customers interact with more than one salesperson. You never want to hear the comment, “The last time we signed a contract, they adjusted X, Y, and Z for us. Why won’t you do it?”
Contract management software can eliminate inconsistencies in two key ways.
First, those responsible for approving changes to standard terms can create a document or guide outlining permissible changes. The document should outline what can change and by how much it can change. These pre-approved modifications allow salespeople to act without waiting for confirmation.
You can even automate complex approval trees in your contract management system. For example, you can set your contract software to request approval for any discount of over 10%, unless the dollar amount exceeds a certain threshold. Then even complicated deals that follow the rules can be immediately approved by the system. Pricing parameters and other guidelines should be part of your system.
Second, contract management software saves all previous contracts. You don’t have to rely on word of mouth or memories to make sure you’re giving a long-term customer consistent terms. This allows the sales team to easily research the terms of a previous contract before approaching or discussing a renewal with a customer. Even better, this helps salespeople avoid offending a customer or appearing incompetent because of inconsistencies.
Safeguard Against Cross-System Inaccuracies
Changing standard contract terms for a customer sometimes leads to inaccuracy within the contract. Changes can spill over into invoices, too. These types of mistakes can reduce a customer’s confidence in a company and negatively impact your company’s reputation. In the worst cases, inaccuracies might kill a new deal or make you lose a contract renewal. This risk is especially apparent with handwritten “fill-in-the-blank” contracts. But it can also occur in documents generated in any word processing program.
When your company uses contract management software for the sales approval process, you have more safeguards. Users can lock documents, so accidental changes or mistakes do not occur. Smart templates can also auto-populate information so it stays consistent, even if it appears multiple times. Additionally, changes are tracked with each contract. Once decision-makers view the contract for signature, they can see any changes and who made them. Locking documents and monitoring changes leads to a higher level of accuracy. Companies can ensure that customers receive accurate final copies of the contract and accurate invoices after the sale has been approved.
Add Transparency to Offset the Slowed Sales Cycle
As soon as a customer wants to adjust standard terms of a contract, you can automatically expect a slower sales cycle when changes must be approved. But when the cycle slows too much, you risk losing the deal. At the very least, your company won’t get to start taking in revenue or reaping other benefits outlined in the contract.
In some cases, much of this delay comes from salespeople have to wait for one or more parties to sign off on the changes. Contract management software gives the contract team the ability to see the workflow associated with a particular contract and allows them to set due dates and send reminders for signatures. The opportunity owner can also track their deal’s movement. Not only can they manage the customer’s expectations, but they also won’t email the contracts team for updates. Additionally, those who must approve any changes can do so with an e-signature or a click of a button. If someone is out of the office, a substitute approver can reroute the task. This removes every potential bottleneck, so each person in the sales cycle and contract lifecycle to do their jobs quickly.
Streamlining the sales approval process by using contract management software doesn’t just benefit the contracts team. It benefits the entire company and reduces interdepartmental conflict. The right software can increase consistency, reduce inaccuracies, and speed up the sales cycle. This, in turn, can:
- Help maintain customer loyalty
- Increase sales productivity
- Allow all contract stakeholders to do their job efficiently
For more information about how our software can help you streamline your sales approval process, contact us today for a free demo.