Ensure the Readiness and Customer-Friendliness of Your Purchase Agreement with these 3 Checks
Does presenting your Contract form to prospective new B2B customers often initiate a stall in the buying process, or weeks and months of delays, renegotiations and redlining? Is it common to never hear back from prospects after your Agreement is delivered?
Many B2B sales organizations have created Contracts, Pricing Proposals or Purchasing Agreement forms and templates that are more likely to kill deals than seal them. And because many sales teams tend to toss Agreements at their prospects too soon, the problem is often exacerbated.
As a company or sales team leader, when was the last time you took a close, objective look at the “paper” you’re presenting to your customers to close new business? Do YOU understand it? Would YOU sign it?
Consider these 3 Checklist items to ensure you’re putting your best foot forward with one of the most critical components of building and growing your business.
- Is there a plain-language, Executive Summary at the front of the Agreement that senior, final-decision-making executives can understand?
- A single page, high-level overview of what your company will deliver, what the customer will pay, and for what term.
- Skip the excess fluff, platitudes and marketing-speak. Write it in plain language and get to the point.
- Include a name, email and phone number for them to contact with questions or comments.
- Create this page with empathy – consider the most senior person who will likely read it, how involved they may or may not have been in the buying process, and what their role will entail in the final decision.
- Does the Agreement clearly spell out your Deliverables, along with any commitments required by the customer?
- Consider that individuals who were not involved in the buying process will likely review this Agreement, and even have input into its approval or disapproval. Spell out clearly what your deliverables will be, as well as what requirements you have of the customer to ensure the value of your product/service will be fully realized.
- Ensure all pricing and other pertinent terms are spelled out clearly and make sense. Ensure it matches what you and the prospect have previously agreed upon. There should be no surprises in a Contract/Agreement. Simplify.
- Is your Agreement legally binding, and does all the legalese and “terms and conditions” language make sense?
- Ensure a lawyer familiar with your business and industry has serious input into the initial draft of your Customer Contract form/template. A good attorney will suggest language and terms and conditions that will protect your interests and liabilities.
- Don’t use a friend or relative that practices law in another space. Pay for professional legal competence within your industry and with knowledge of your value propositions.
- Attorneys will often go above and beyond with protecting your interests. Take their counsel seriously but craft the Agreement so that it isn’t overbearing or will trigger 6 months of redlining with your future customer’s legal team. Tweak your Agreement form as needed based on market feedback.
- Avoid templates and processes from mediocre CPQ (Contract-Price-Quote) software that creates complex, awkward Agreements loaded with unedited errors.
- In most instances, a valid, fully executed Contract form requires signatures from both parties. And a fully executed (dually signed) version must be in the hands of both parties. Without mutual signatures and possession, you don’t likely have a contract in place. Don’t miss the basics. (e-signature tools may either simplify or complexify this)
Your Contract is a crystal-clear representation of who you are as a Company, and how easy or difficult it will be to realize value from an agreement or partnership with you. Simple, friendly and easy sells better than complex and difficult. Ensure your Contracts reflect as much.
Not all B2B Agreements are the same, and there are certainly exceptions to these considerations. But my observations as a Sales leader and consultant continue to persuade me that the Contract is a key indicator of your company’s customer friendliness and the value you create. A really good one can shorten sales cycles and improve close rates.
Contact me if an objective set of experienced eyes could improve the Contract form you’re presenting to serious prospects.
Jack Liles is a Partner at TechCXO, providing on-demand Chief Sales Officer duties to client companies in need of go-to-market plan development, improved sales performance, leadership and structure. Jack is a veteran Naval Officer and recovering F-14 Tomcat flyer. Following his service Jack earned leadership roles at the ad agency Leo Burnett, Coca-Cola, UPS, along with numerous successful (and unsuccessful) start-ups. Connect with him at firstname.lastname@example.org.