TLDR: Don’t let things slow down in legal. You’ve likely got momentum at this point, so take advantage of it to get a signed contract.
There are three general contract types – a standardized price with uniform Terms & Conditions across most customers, specific proposal terms, and a negotiated custom contract. Work with your lawyer to draft these.
Get lawyers on the call early and use their legal process to help things move faster. Be sure to check the contract after legal review to make sure all the agreed upon changes were actually made.
As you close the deal, upload the contract to your CRM, take tedious notes on the process, and begin thinking about setting tasks to win the renewal.
Intro:
Congratulations, you’re almost there! You’ve identified an ideal target company, cultivated a champion for your product, connected with the right people at that company, aligned the stakeholders around the value of the product, and negotiated a proposal that both you and your soon-to-be customer are happy with. Now it’s time to get the deal on paper.
Take a look at these tips to avoid common pitfalls and ensure a speedy signature process.
Contract
One of the most important aspects of the entire sales process is legally outlining the agreement you and your prospect have reached. Like the proposal, always be sure your contract has a valid through date which you can hold the customer to.
There are generally three types of contracts you and your lawyer will be creating for customers:
- Standardized Price with uniform Terms & Conditions across most customers: Think of the ‘Agree’ Ts&Cs you check off with Apple or other platforms update something in their platform. In B2B this structure of contract is typically used in go-to-market models that include the below as part of their adoption model:
- Self Sign-up Products
- Product-Lled Growth Products
- Bottoms-Up Products
- Forever Free Products
- Free Trial or Freemium Business Models
- Specific Proposal Terms: These get outlined, and include a link to standard terms and conditions that are linked/listed on your website. They are typically used for:
- Mid-market products where the bureaucratic nature of the client varies
- When you’re testing what a self sign-up flow could look like
- When you’re trying to figure out standardized pricing
- Negotiated, Custom Contract: This is done most often in collaboration with an older or enterprise client. Custom contracts are typically used when:
- Negotiating with companies who have internal legal council
- Defining Proof of Concept
- Product offering has not been standardized
* A quick note: When negotiating with a corporation, it is almost always both faster and
easier to use the corporation’s legal agreement rather than your own. You’ll also need
to make sure compliance requirements and deployment dates match what was
negotiated. Check for:
- Insurance
- Support
- Security
- Privacy
Legal
Once you’ve got a contract built and ready to go, it’s tempting to believe that you’re almost done with the sales process. This can be misleading. Getting a sale through corporate legal departments can be one of the slowest and most bureaucratic parts of this entire process.
Up until now, you’ve been excitedly chatting with decision makers at the firm, explaining your founding story and lighting rooms up with detailed explanations of how your product will address their pain points and drive your customer’s company into the future. You’ve gone through the highs and lows of a (hopefully) effective negotiation. Now, you can see the light at the end of the tunnel – don’t let your sale get stuck in the weeks if not months long legal review process.
We can’t say this enough: GET YOUR AND YOUR CUSTOMER’S LAWYERS ON A CALL IF POSSIBLE! It will speed up the contract process and save you hours, if not days or weeks, of potential headaches of back and forth, not to mention miscommunication due to complex legal jargon. If you’re dealing with PII or customer data in general, legal will take longer to be sure they understand the use of data. If you can’t get your and the customer’s legal teams on a call, we suggest having your Champion (*AKA, your advocate within the company) meet with their legal team to explain the use of the data on your behalf, otherwise you’ll end up with a severely redlined document and weeks of back and forth between lawyers who are missing context.
When dealing with the potential of a drawn out legal review, we highly suggest tying the signing of the contract to a date for implementation. This will provide your Champion and their legal team with an internal deadline to complete the contract. The person who signs the contract is rarely also the person who will be implementing your software, so tying one to the other will ensure that they occur on a timeline you’re comfortable with. Like with the sales process, without a solid internal deadline timelines can get pushed and contracts deprioritized. Implementation will provide the needed social pressure to get the contract signed, without you having to provide the pressure.
Finally, always review a final agreement before signing. It’s not uncommon for updates not to have been made or terms to have been slipped back in.
Close
It’s time to close this deal! Below are a few tasks we recommend you complete once the contract is inked.
Upload the contract to your CRM:
Uploading the contract to your CRM will ensure it is easily accessible for future use. As your team scales, it’s likely someone else will manage the customer renewal. You’ll want to make sure that whoever takes over has all the information.
Complete your notes:
Though we all like to think we have great memories, it’s very unlikely that you’ll remember the details and nuances of a sale months or even years later. The better your notes, the less you have to rely on memory and convey later. Like the Contract, as your team scales its likely someone else will be managing the implementation. The better your notes, the smoother customer handoff process will go and the more likely you’ll win the renewal down the line.
Create Tasks:
Immediately create a tasks for:
- Implementation deadlines
- If an enterprise or strategic account, quarterly check-ins
- 3 months before the contract renewal
Conclusion:
You’ve made a sale, acquired the additional runway for your company, and achieved another checkpoint to validate your product market fit!
The best part about the sales process is that it is a measurable, repeatable process you’ll use to acquire new customers, renew current customers, and even train your first sales hire (we’ve written a series on making your first sales hire too).
Putting together a contract, working through legal, and closing a sale are the final steps in the sales process. If you haven’t read our previous articles, you might be wondering what it takes to get to this stage. We’ve outlined the previous steps leading up to this one below.
If you’re a founder or sales leader, looking for additional guidance, we’d love to help! Reach out to us at contact@thesalesmethod.com.
Until next time! Remember if you don’t measure it, you can’t optimize it!!