.svg)
In the growth phase of a company, processes must be optimized. Small obstacles have a cumulative effect and become very expensive if more customers are to be brought to close the sale.
Creating, negotiating and signing contracts is one of the key activities to achieve growth on a scaled basis. But why do many companies fail to do so?
In contrast to B2C business, in which the terms and conditions regulate the legal basis with end customers in a standardized manner, the contractual arrangement between business partners is the central basis for finalizing mutual interests. In fact, according to IACCM (The International Association for Contract & Commercial Management), 80% of turnover with corporate customers is regulated via contracts, but 83% of people are not satisfied with the process of concluding contracts.
Sales employees who are paid variably are particularly dissatisfied as they are less likely to conclude a contract.
An inefficient process of concluding contracts therefore has a direct connection to sales targets. It is easy to understand that ineffective contract management costs companies up to 9.2% of annual turnover. A scaled sales process is defined by a short sales cycle. If this loses momentum and has a high degree of friction, then the best sales skills and techniques are not optimally used.
Now what is the reality? According to IACCM, 80% of contracts are still handled manually and therefore inefficiently. The competitive advantage that an optimal contract process creates is therefore not realized. Business partners have a broken customer experience, there is friction between sales and management, which must comply with legal requirements and risks are not proactively addressed.
If you share the same experience, we recommend taking the following steps to scale your business:
1. Digitize your contract process
You probably already have highly digitized processes in marketing and in your HR processes. They use technology to automate and standardize. Apply this skill to your sales process as well, with close attention to contract creation, negotiation, signing and administration. Sending contracts with markup via email today, discussing changes with lawyers, signing by post and then missing deadlines to renew contracts is the reality in many companies. In a technology-driven business like yours, you won't achieve your quarterly figures without a scalable contract process.
2. Simplify contracts for a better customer experience
Legal language is complex. An essential step to speed up processes is to eliminate technical jargon for non-lawyers and to bring clarity to wording, recommendations and instructions. Texts must be as short as possible. Complex negotiations require complex language regulations. Risks must be excluded or managed in a legally secure manner.
Summaries, explanations and tips accelerate mutual understanding. Documents must be accessible and easy to read so that they can finally be signed.
3. Get business partners involved in your process
As with any process, it is important to make it as inclusive as possible. All parties involved in the contract must use the technology so that true process optimization becomes possible. NDAs, employee obligations, order data processing contracts — they must be signed and accepted. This must happen easily and quickly for the other person.
4. Streamline negotiation
When negotiations are complex, lawyers must be easy to integrate into the process. Not all things can be standardized as new business situations arise. But don't start sending Word documents via email. Documents must be editable internally and externally in the cloud in order to save time and invest energy in the cause that creates value: The personal exchange during negotiations.
Ideally, your lawyer creates a scenario-based “playbook” that is made available to non-lawyers, such as sales representatives. You can accept terms and the contract is set up automatically. If the lawyer has questions, he adapts the “playbook” for future negotiations - a process of iteration, as in software development.
5. Collect data for continuous improvement
Negotiating contracts is teamwork. Sales must work closely with management and internal or external lawyers. Only when data is evaluated together can a collective learning curve arise. Knowing which contracts take the longest to conclude or which corporate function bottlenecks arise is a very valuable gain in knowledge. In addition, the knowledge gained from contract negotiations can be recorded in order to define negotiation positions across teams and to make sales decisions not situationally, but systematically and value-adding. With data, you optimize the time until the contract is concluded.
6. Integrate contract software with the system
Digitalization always starts with the people to whom processes are adapted, which in turn are accelerated and automated with technology. If you therefore want to use a new software tool, you must bring along the sales staff, managing directors and lawyers. The easiest way to do this is, of course, if they only gradually change their previous process.
Sales representatives must be fully empowered to sign contracts without leaving their previous tools, have approvals from lawyers easily accessible and get their negotiating partners to digitally sign.
Modern contract management offers exactly this: thanks to a good user experience, it is easy for non-lawyers to handle and easy to integrate with integrations into their previous software, such as their CRM. Only then will it be possible to achieve the productivity gains and sales successes that we have discussed above. This makes scaling possible.
7. Treat contracts as the key to a successful customer journey
A signed contract means a lot of things:
- You've driven your company forward with continued revenue growth.
- You have acquired a customer or trade partner and regulated mutual expectations through the contract.
- You have regulated the risks of the relationship and the consequences of the breach of contract
Contracts keep the company in relationship with internal and external stakeholders. Their traction and predetermined breaking points determine the development paths. This is well known. How these contracts are concluded, however, remains unclear.
The smoother the contract conclusion experience is, the more enjoyable and effective for both sides. Through fast, intelligent and automated contracts, this touchpoint can create a personalized customer experience tailored to your brand that sets the right tone for your business relationship.
If you want to be a truly customer experience-oriented company, then bring this claim to your contracts too. The Research Institute Forrester has shown that companies focused on customer experience can have 1.6x higher brand recognition, 1.7x higher customer loyalty, and 1.9x higher return on investment.
