Giving your clients the best experience should be at the forefront of any business strategy.
Good relationships rarely start with long and arduous negotiation periods, and as any salesperson will tell you: the quicker you can get a client the final contract, the more likely the deal will close.
But a typical contracting process is well… a process. In fact, the length of time taken for a contract to be reviewed, negotiated, approved and signed by all parties is usually measured in weeks rather than days.
Time kills more than just ‘all deals’
To put it simply, a slow contracting process (we call this deal velocity) can cost your business millions of dollars each year. For organisations looking to boost their bottom line, this is therefore a metric to be tracked closely.
The longer a contract takes to get signed (lower deal velocity), the less valuable it becomes, but perhaps for more reasons than you think.
We know, of course, that ‘time kills all deals’. The more time that passes, the greater chance priorities will shift, buyers will lose confidence and unforeseen circumstances will arise. Your conversion rate drops the longer you leave it.
But what’s equally important to consider is that sales contracts don’t become revenue-generators until they’re executed.
If you can get a lease signed a week earlier, it’s a week of additional rental income. Same goes for almost any product or service that works on a recurring model.
Deal velocity vs risk
No doubt many salespeople would love to draft and approve their own contracts. Deal velocity would certainly improve, and no doubt more of your reps would hit budget.
But there’s a reason why Legal insists on stepping in, and typically undertakes 5-10 contract revisions prior to approval and execution.
The salesperson wants the best deal (as does the counterparty), while the lawyers on each side are charged with managing risk exposure. There’s no point getting a lucrative deal done if it leads to unacceptable risk exposure - this may cost the business more in the long run.
Aligning Sales and Legal to drive commercial outcomes
A client’s first impression sets the tone for the relationship moving forward, and despite many lawyers being branded as ‘uncommercial’, speed and risk management don’t have to be a zero sum game.
Here at Plexus, our customer agreements can move from drafting to execution in as little as 24 hours through the power of Plexus Gateway’s contract management system.
Each of our sales contracts require two rounds of commercial approval and then legal approval before they can be sent to our clients which typically then leads to a few rounds of negotiation.
We then have each contract signed by our team plus one or two signatories from our client, depending on their requirements.
By managing the end-to-end contract lifecycle via Plexus Gateway, our client’s half of the contract approval and signature process can be completed in just a few minutes.
The Plexus Gateway contract management platform will instantly send the document to your required internal stakeholders so everyone who needs to approve the contract can do so regardless if your team is in the office or working remotely.
Of course, there are plenty of reasons why things might get delayed on either side, but Plexus Gateway gives us a clear view of any bottlenecks, and sends reminders to the relevant stakeholders as required.
By eliminating drag from the approvals process, we increase our deal velocity while also setting our new client relationships up for ongoing success.
As well as good relationships with their technology vendor, Plexus Gateway allows our clients to improve their own deal velocity by getting contracts signed faster. Craig Alpin, Service Delivery Project Manager at New Zealand energy provider Powerco told us “smaller contracts can be signed in half a day. Before Gateway, that could take two to three weeks.”
Transform your sales process with Plexus Gateway
It’s undeniable that wait steps in sales processes cost deals. But managing risks doesn’t mean you should have an inefficient process. Learn more about how Plexus Gateway’s contract management system is helping companies save time and increase contract velocity. Or get in touch for a product demo or free trial: