“Contract hell”…. This is the one place that no seller wants or needs to be. Believe me, I have been through it and it is not a pleasant place to be. During this episode, I will explain what “contract hell” is like and how and why you need to stay away from it.
What is “Contract Hell”:
“Contract hell” is a horrible limbo land that many sales professionals get trapped in after going through the hard work of bringing a deal through the whole sales process. From finding the new business, identifying the challenges, getting leadership buy-in, doing presentations, working out through negotiation etc. But there is one phase that is generally overlooked, it is the contract (aka the agreement). Since the contract generally comes in at the end of the sales process and statistics show that the majority of sellers spend more time at the other end of the spectrum of “finding”, they don’t know how to chart this part of the process. It may have taken the seller 3 months to bring the deal to this point, but “contract hell” can last longer than that and delay the seller from getting money. Because even after having the contract finally coming in, there is still a at lease 30 days before the client pays your company. If you are waiting for the that money for some reason or another, you may end up waiting for a really long time.
“Contract hell” consists of legal folks going back and forth tweaking things over and over again. It cost both parties, money and energy. However, depending on the complexity of the product or service you are selling, your contract/agreement signing period may be a very small window. I have seen when a delightful prospect becomes bitter and frustrated because of the long, rigorous process. As a result,it puts the deal in jeopardy. Imagine how you would feel as the seller when the deal that you have labored over for so long was being totally unraveled by the company’s executives. Well, it is not pretty. Depending on the size of your organization, it may be totally out of your hand. Speaking from experience, you don’t want to go through contract hell!
But how can a seller avoid it? Well, this is what I have found.
How To Avoid “Contact Hell”:
Well, here is the solution. The key to getting through “contract hell” is to focus on getting the contract/agreement in the hands of the buyer’s legal team earlier. Now, I am not encouraging you to send a contract as soon as you get someone who is interested in your product or service. However, maybe when the buyer understands the value of your product or service and has seen a presentation and you know they are going to buy. Typically, most large deals have to go through some sort of a committee or board approval. This where negation may start and where I recommend getting a copy of the contract to your champion, to pass on to legal.
Tell them, I understand that your legal team will need to review the contract before the purchase is made, so I want to get them a copy of the terms and conditions in advance to comb over it. I typically joke with them saying that we both know how long legal folks take and we want to prepare as much in advance so something small does not hold them back from making the purchase.
This act allows the legal team time to look over and identify any changes that is needed. Although what I am saying may sound basic, I can tell you many of us don’t do it. We sit back and wait for the buyer to tell us when to send over our agreement, after everything is said and done, you are risking a stay in the torturous “contract hell”.
In conclusion, be proactive and take matters into your own hands. This will help you overcome this silly little mistake. If the product or service you sell doesn’t have a painful closing process, but you face something else that typically causes a longer waiting period, please share with me below in the comments area. I would love to learn more. Overall, I want you to go out and do BIG THINGS!