11 Feb The Renewal Starts Today
The Renewal Starts Today
“No worries – we have a year and a half left on our contract”. Those words actually mean it’s T minus 548. While that may be the number of days you have left before contract expiration, it’s time to really get to work because…
“The worst time to renew a contract is when it is due for renewal” (Tenacity Client Retention Commandment # Eight)
Question: Do you think the competition knows the expiration dates of your most important contracts?
Answer: If they’re worth their salt they do. Their best sales people are highly trained professional hunters – your worry should be that your contract is their prey. (Hopefully not defenseless prey though.)
Here are the four keys:
1) Convene a TARPsm Session: Gather together everyone from our side of the Web of Influence® for a full day TARP (Team Account Retention Planning) session. Also include everyone from senior management and staff who will be involved in approving proformas and plans for the renewal. All data (expectations, performance and relationship), current and historical, as well as the most current FreshEyes® Review is distilled, analyzed, discussed, and crafted into a full strategic and tactical plan to accomplish the renewal. The real goal, of course, is to get it done prior to a formal rebid or RFP process – before the competition has a good opportunity to engage (and bid the deal down).
2) Stretch out the competition’s lead-time. To the extent that we actively engage our own renewals a minimum of 18 months prior to contract expiration, we force our competition to engage earlier and earlier in order to compete for our business. Truth be told, their sales people don’t like to do that – they’re much more into immediate gratification than that. They really don’t want to have to start to work 18 months in advance of that fat commission check. They’d rather go off in search of more readily available “low-hanging fruit”.
3) Make it worthwhile for our own sales professionals to engage with renewals. If we leave our operators and support staff on their own to defend important contracts against the competition’s highly trained and motivated “hit men (and women)”, we’re leaving our sheep to the wolves. Our own sales people know the ways of their competitors and they know how to compete to win. This is no time to abdicate the “incumbent’s advantage” to the seductive charms of our competition’s hunters. Engage our own sales people and make it worth their while.
4) Resist the “tyranny of the urgent”. It’s awfully easy to really intend to get this process underway 18 months in advance, then have other, more pressing priorities make it easy to say, “We’ll get to this next month.” That will happen just about every time, if we let it. Don’t let it! Schedule strategic renewal sessions well in advance and demonstrate their importance to the organization by making them a priority.
What is your rate of contract renewal? More importantly, how many do you renew before competitors have the opportunity to engage?