- The worst time to renew a contract is when it is due for renewal.
As a contract renewal date approaches, it always seems new competitors start to begin the selling process. They try to undercut you or offer more services for the same price. All of this is an effort to win the business and put pressure on you to keep the contract. What if I told you that you should already know if you have the new contract or not by this point? This is possible if you have been following the previous steps. If you have been working on building and deepening the relationship routinely then it won’t matter to clients what costs or services others are offering. If your company offers similar services and similar prices, you will retain the business. Competitors don’t incorporate the cost and hassle of changing companies with a new contract. The power of a strongly built relationship is how some companies work together for many years.
- The end of a contract doesn’t have to mean the end of a relationship.
When a contract ends this doesn’t mean a relationship is over. That is like saying when your best friend moves to a different state you aren’t friends anymore. If done properly, you may actually prosper from this business split. Contracts can end for many reasons and it doesn’t always have to be negative. If you lose a contract, a client, or a relationship, do so in a professional manner. Ask the company why and how you can help them transition to the new company. This will give you a great reputation in the business community and can help you gain business in the future. In this modern society, buyers usually do their due diligence before making a decision. This includes calling previous companies you have worked with. The better impression you leave on those companies, the more praises they tell your prospective business partners.
- How you close a contract is just as important as how you start one.
I had just mentioned above that leaving a contract or a client/relationship should be done in a professional manner. This is not always an easy thing to do. Whether it ends due to losing the business or the fact that you have fired the customer, it should end on good terms. While studying marketing at La Salle University we were taught one very interesting fact that has stuck with me every day in business. The fact is that “if someone is displeased in your business they will tell 11 people. If they like your business they will tell 3 others.” This goes to show that when people are angry they express their feelings to many more around them then when they are happy with something. If you end a relationship on a bad note you won’t only lose that client for life but you are putting your future business at risk as well.
To recap let’s remember:
-Building a relationship is not an overnight event.
-Doing the right thing can lead to future business.
-You may have to fire a client if they don’t match your businesses criteria.
-End terms on a pleasant note by helping the client transition to a new company.
-Start the business according to the client’s expectations and not your own.
Most importantly, Client retention begins with the right clients under the right terms.
Jon Gyles can be reached at: jon@ewmginc.com