If your organization is looking for ways to improve your contract renewal workflow, there are business models you can follow to help guide your path. Read on to discover six tips to help you identify hidden contract renewal opportunities and products which can help make your contract renewals more efficient.
Tips for Improving Your Current Contract Renewal Strategy
One way to quickly enhance your business performance is to improve your contract renewal strategy. There are many benefits of utilizing a proactive contract renewal strategy. It allows you to maximize your existing accounts rather than constantly relying on new business. Constantly hunting for new contracts makes it challenging to stay profitable. Being able to rely on a significant percentage of renewals takes stress off the organization and the team. It allows your company more room to allocate resources and prioritize your most valuable accounts. It also enables you to focus on potentially expanding accounts with promising potential.
A proactive renewal strategy will encourage your team to assess each contract's return on investment (ROI) to decide if it is in your company's interest to renew. This allows you to prioritize your most valuable accounts and better utilize your team's time.
Here are six tips to help you improve your current contract renewal process best practices:
- Consider investing in contract management technology.
- Perform business contract review way ahead of renewal dates.
- Form a strong relationship using customer success teams.
- Spend time assessing renewal risks and renewal opportunities.
- Monitor who has access to documents.
- Set up a simple automatic renewal option.
These tips can help your organization enhance its business performance and increase revenue from contract renewals. A good contract renewal strategy will help your company's revenues increase exponentially over time.
1. Consider Investing in Contract Management Technology
There are many excellent reasons to invest in contract management technology, from more efficient use of company time to reduced costs. A high-quality contract management system adds significant benefits to your organization, including:
- Saving a significant amount of company time that you can allocate to strengthening existing relationships or searching for new contracts
- Revealing contractual benefits that are not yet being maximized
- Reducing your company costs and boosting your profit margins by more easily recognizing cost consolidation and contract expansion opportunities
- It's easier than you think to migrate to contract management technology.
These are just a handful of ways that your business can benefit from utilizing cutting-edge technology to manage your contracts.
2. Perform Business Contract Review Way Ahead of Renewal Dates
If you are searching for ways to get more value from your contract renewals, an early contract review is one of your best options. Renewals are a key stage in the contract lifecycle. It's a time to evaluate the contractual relationship and determine if changes need to be made, services expanded, or the relationship terminated.
If your business isn't reviewing contracts before renewal, then it's likely that you are regularly missing out on opportunities. These opportunities include:
- Expanding your services
- Negotiating cost-reduction on your services
- Cutting your losses with less profitable client relationships
3. Form a Strong Relationship Using Customer Success Teams
You can use customer success teams to foster stronger relationships. By assigning certain teams to specific clients, you assign responsibility for these relationships.
It's more efficient to juggle these relationships effectively using a well-rounded contract management system. A good technology system can help you track things like:
- Contract terms
- Renewal cycles
- Contract periods
- Contract deadlines
- Contract-specific tasks
When your customer success teams have an important milestone pending, they will receive an alert from the system reminding them of their upcoming obligation. Keeping in touch with the customers at regular intervals and essential milestones in the contract lifecycle will help foster a stronger customer relationship.
4. Spend Time Assessing Renewal Risks and Renewal Opportunities
Before a contract auto-renews, it is advisable to consider the renewal risks and opportunities. Contrary to what some companies believe, it isn't desirable to renew every contract. You should carefully weigh the risks and the opportunities involved in each contract before making an informed decision to renew or terminate the relationship.
This is particularly true for well-established companies that are continually expanding. You only have so many company hours in a year, so it is preferable to focus your time on your contracts that bring a more significant ROI to your organization. By cutting your losses with customers that bring a smaller profit, you free up time to take on larger, more profitable clients.
5. Monitor Who Has Access to Documents
In contract management, it's critical to monitor who is allowed to access documents. You can set user permissions to ensure that only certain people can access specific contracts and other client data related to the contract.
Without these specific user permissions, it's possible that the wrong person could access restricted data or even tamper with your files. Contract management software can help reduce this risk by using the user permissions built into the platform. You can easily define the security details and designate authorized and restricted users for separate contract files.
6. Set Up a Simple Automatic Renewal Option
Once you have determined that your company would like to renew a contract, you can set up an automatic renewal option that is simple for both parties to utilize. In many cases, little must be done on either end for the contract to renew.
When you do this, it's best to build in a few automatic reminders for your team in advance of the renewal date. This will allow your team time to conduct a cost-benefit analysis. Even if the contract is highly profitable when the automatic renewal option is set up, things can change down the line, especially over several years. Regular auto-renewal alerts will allow your organization to review the contract and cut losses or renegotiate terms when necessary.
Streamline the Contract Renewal Process With Contract Lifecycle Management Software
These six tips can help you quickly optimize your company's contract renewal strategy. However, they are all much easier to implement with the help of contract lifecycle management software. It will allow you to speed up your contract review times, accelerate deals, and earn trust with your customer base.
Lexion offers an intuitive contract lifecycle management software that features an intuitive central dashboard where you can see every task your team is handling and what stage they're in. You can easily find the most recent contract version and review previous contract versions and deal history for easy access. Streamline your contract renewal workflow with Lexion, and watch your efficiency and profits soar.