In the last few weeks we've been dealing with several new clients who never previously used contracts in their businesses at all. Some were used to preparing proposals for new sales, and usually included a few words about invoicing and payment terms. A couple even used reference to 'our terms and conditions apply' - without actually having any!!
When pushed, these companies (any many others - maybe you too?) say that they've avoided contracts because they can put off potential clients. They're worried that by showing a customer their terms of business, they're putting barriers in between them and the sale. And that, as we all know, is the last thing that sales people want to do!
Another variation on this theme is the company that does a fantastic sales job and has the client biting their hand off, and then slips their terms and conditions across the table with a mumbled 'So if you could just sign here...' at the last minute. Ideally, for these guys, the client wouldn't actually read the document before signing ('It's all the usual legal stuff...just standard, really...').
So why do we do this? Is giving a client your Ts & Cs before a sale really as off-putting as making a teenage boy take his prospective mother-in-law out for dinner before he can date your daughter?
I guess there are many reasons, but they fall into a few main categories:
- the sales person doesn't understand the Ts & Cs (and doesn't think the client will either)
- the Ts & Cs bear no relation to how the business works
- there is no clear benefit to the sales person (or, in their eyes, the company) to having the client sign these terms
- the Ts & Cs are so one-sided that the sales person is worried they will put off any potential client who actually reads them
- the deal size is so small that the company is happy to bear the risk of everything going wrong
If you have thoughts on this subject, I'd be really glad to receive them - you can either post online, or email me at tiffany.kemp@devant.co.uk. Needless to say, I don't share this reluctance to use Ts & Cs, but I do think that we should work hard to ensure the perceived negatives are addressed. Because we can't expect our professional sales people to do anything that they think is detrimental to the sale - and it's up to us to show them how contracts can be a margin delivery tool rather than sales prevention!
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For 10 years I ran a sales consultancy business which I recently sold. My first client drafted our first contract. It was less than 3 pages long. It looked pretty reasonable to me and fair and so I cut and paste it for the 2nd client. Their lawyer added a paragraph and re-phrased another paragraph. The 3rd did the same and then the 4th. I sold the business with 37 clients and a consultancy contract that went on for 12 pages or more but essentially said the same thing as the simple 3 page agreement. All those lawyers over the years had simply padded it out and I am sure made a healthy living doing it.
In theory as the brands we dealt with got bigger, and their lawyers more expensive, it should have evolved into a contract that covered every angle and dotted every i and crossed every t. In fact the opposite was true. The bigger the client the more meddling and re-phrasing their lawyers did.
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