As the second quarter inches towards a close, the usual chaos is in full swing in sales organizations. Sales reps are waiting on customers, hustling to make quota with their eye on quarterly incentives, sales managers are helping reps close deals, sales ops are getting deals into the system, and finance and legal are poring over contracts. This kind of frenzied activity is only typical, given that the lion’s share of a quarter’s business is often closed in the last two weeks.
The good news is the rep has brought in a deal, but the bad news is your manual contracts process typically adds weeks, sometimes months to your sales cycle, while risking the deal altogether. In many organizations, contract creation and negotiation is a laborious and long-drawn out process; often written by customers and sent to the vendor for approval. It then becomes a back and forth between the customer’s legal and the vendor’s legal departments. Your legal might say: “We can’t agree to all these clauses. Go back and make them agree to our standard language.” The rep is –then caught in the middle, trying to negotiate legalese, with little control over the sale– held hostage to a painfully slow manual contracts process.
In this scenario, deals may get delayed or worse, slip in the last leg of the sales cycle, jeopardizing quota attainment. In the rush to get approvals and signatures, manual errors may creep into contracts. Quarter end also means many contracts are about to terminate or are up for renewal. Did you miss any quarter end renewal opportunities amidst the bustle? Keeping track of contracts scattered across employee’s computers is a formidable task. Contracts may even be lost when an employee leaves your company.
How often do contract approval problems delay a sale when you are a whisker away from target? Legal functions and even deal desks in technology companies can delay a sale just when you think everything is about to close. At the micro level, manual contract management takes away precious hours from a sales rep’s day that could be better spent selling; at a macro level it inhibits your company from scaling.
Automating the lifecycle of your contracts through Contract Lifecycle Management (CLM) can streamline the creation, negotiation, and storing of contracts so business can get done MUCH faster. It can help companies achieve SPEED and SCALE to close deals faster; the two things that every sales leader craves for. CLM comes with a library of templates making contract creation a breeze. Contracts are automatically routed to the appropriate person/department for approval. Customers can redline clauses and your legal can review it easily. Multiple teams like finance and legal can review contracts simultaneously, saving precious hours. Automatic alerts ensure you never miss contract renewal, milestone, and expiration dates.
SaaS-based contract management solutions offer further advantages: removing the need to go back and forth on multiple versions of contracts, eliminating the need to invest in software/hardware, does not need any IT administration, and best of all, can get you started in a matter of days.
According to Forrester, best-in-class companies that use CLM have seen tremendous benefits:
- 25% shorter sales cycles
- 22% reduced contract turnaround time
- 73% customer renewal rate
- 5.6% fewer contract errors
Can you afford to leave your sales team behind just as quarter end approaches? Write back to me on how you deal with contracts in your organization. Look forward to your comments.