contracts for closers: turning your quarterly forecast into revenue

Contracts for Closers:Turning Your Quarterly Forecast Into Revenue

SALES EDITION

2CONTRACTS FOR CLOSERS; TURNING YOUR QUARTERLY FORECAST INTO REVENUE

Introduction

As the end of the quarter approaches, the pressure builds for salespeople trying to reach their quarterly quota. Working late nights and weekends can get only get a sales rep so far when scrambling to close contracts in the final weeks of the quarter. Contract delays, like drawn out contract reviews or missing signatures can botch even the best laid plans to close a last-minute deal.

Failure to reach quota can hurt more than just a business. Salespeople can come under fire from management, miss out on commission and start the next quarter with a low morale.

A recent Aberdeen Group report found that just 48% of sales reps achieve quota at Industry Average organizations. Clearly this issue is common in the sales world, but it can also be seen as a major opportunity for a company to speed up the contract cycle and increase revenue.

No sales team intends to lose a deal, and it’s still going to happen from time to time. The loss shouldn’t be due to easily avoidable pitfalls like outmoded and outdated contract management strategies. This eBook will equip you with contract management best practices to help you better spot contract red flags and deliver on your forecasted pipeline when it matters most.

http://www.aberdeen.com/login/?doc=/launch/report/knowledge_brief/11148-KB-sales-analytics-enablement.asp

Table of ContentsIntroduction ......................................................................2

End of the Quarter Scramble ...........................................4

Increasing Value with Effective Contract Management ...6

What Stands Between You and Your Quarterly Revenue Goals? .......................................7

A Predictable Pipeline: Automation to Anticipate Close .....................................13

Start Closing the Quarter Now ......................................16

Contributors ...................................................................17


End of the Quarter ScrambleUshering a deal to close is much like playing basketball; you can’t wait until the final minutes of the game to score enough points to win. Instead, if you consistently score throughout the game you have a better chance of staying ahead and winning. Unfortunately, sales teams find themselves scrambling at the end of each quarter. It can be a dangerous place to be, since rushing the process can open the door to human error and risks.

In a SpringCM survey, over 70% said human error negatively impacts their contract process at times, while 9% have received penalties for compliance errors in a sales contract.

When a salesperson rushes to close a deal, it becomes tempting to cut corners or accept other risks in order to get that contract signed. At the same time salespeople are dealing with unpredictable setbacks. For example, just when all the approvals and signatures are thought to be collected, you could suddenly learn that there are more individuals from the customer side that still need to give approval.

To ensure the still closes in these situations, some sales reps add “out clauses” to a contract, allowing the customer to get out of the deal if a pending approval doesn’t go through. This might close the deal for the

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moment, but it leaves a major asterisk with the possibility of the contract being terminated and never resulting in revenue.

Rushing the deal can bring more than financial headaches to your company, but also legal trouble. Without the right tools, fast-tracking a contract through negotiations can lead to human error. If a mistake happens and the customer doesn’t get what they agreed on, they have grounds to sue you. These extreme situations can cost a salesperson their job.

Avoiding the end-of-the-quarter scramble starts with establishing a predictable, repeatable contract management process.


Increasing Value with Effective Contract Management Contracts should be managed in a way that is organized and transparent, keeping sales operations, sales management and legal in the loop over the status of the contract. The process must be thorough and secure but also fast.

A successful contract management will accomplish the following things:

• Increased Contract Accuracy & Compliance • Shortened Review Cycles to Speed Time-to-Revenue• Minimized At-Risk Revenue with Automated Renewal • Improved Customer Experience

BlueCross BlueShield, established a standard contract management process to onboard new and existing dentists to their program. The contract processing time was reduced from 6 weeks to 1 week, and the company was able to enter a new market in 6 months rather than the projected 3 years.


What Stands Between You and Your Quarterly Revenue Goal?The contract lifecycle is complex, and involves collaboration between sales and legal teams. The key is to build a predictable pipeline that tees up the next step in the process while gaining visibility into potential problems that can slow down the process.

There are 7 core stages to the contract lifecycle, and each stage must involve open communication and transparency. For each step, sales teams should consider if their organizations contract process matches these best practices, and if not, recognize what could be standing in the way of realizing your quarterly revenue goal:

Stage 1: Store

At the beginning of the contract process, the first step to building a predictable pipeline is to establish a “source of truth.” This is where the contract is stored and worked upon. A central repository provides one location in the cloud that everyone involved can access. With this, a contract can be accessed from all devices, and all changes to the document are synched, ensuring you’ll always have an up to date version of the contract.

For sales teams using a CRM like Salesforce, a solution should be integrated so reps don’t need to leave that


platform to deal with the contract, but the contract shouldn’t be bound to that CRM. At the same time, the contract needs to be accessible to outside teams like legal or finance.

Stage 2: Generate

The next stage is building the contract itself, which is inherently time-consuming since it can involve re-keying the same details for each contract.

The ability to automatically generate contracts from pre-approved templates will eliminate repetitive tasks and allow the salesperson to engage with the customer more often.

Additionally, generating pre-approved legal language will allow sales teams to get a jump-start to contract negotiations, and add some legal language to the contract themselves so the legal team can focus on the more fluid details.

Stage 3: Negotiate

While sales teams have their eye on the clock and their managers and customers in mind, legal is busy picking apart the contract for potential risks. Both teams are often at odds finding the balance in the quality of the review and the speed at which it’s done.

Early on in this phase it’s important to communicate with the legal team on how long it might take to redline the


contract. Sales teams can then relay that information to the customer so everyone is on the same page.

Sales teams still need visibility into the contract as it is being redlined, so they’re not reaching out to Legal, and distracting them from negotiations. If the contract is being redlined in the cloud, sales teams can easily check the status and identify who made what changes and when, without needing to reach out to Legal.

Stage 4: Approve

Now that the contract language has been negotiated and reviewed, it’s time to collect the appropriate signatures. Depending on the size of the contract, signatures will be needed from lawyers, executives and other stakeholders. Here’s the next bottleneck: the clock is ticking and you can’t find the necessary people to sign the contract. In our survey, more than 43% said their contract process stalls at the approval stage.

Whether they are on vacation, or just bad at keeping in touch, getting the individuals to put a pen to paper can look impossible at this point.

Instead of resorting to altering contract language or writing an “out clause,” salespeople should be able to get the contract signed, no matter where there signees are. Electronic signatures can allow the contract to be signed anywhere, anytime and from any device.

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Stage 5: Import & Administer

Once the contract has been approved, it’s a matter of getting it to all the individuals involved in the deal. By this stage, the company can begin to realize revenue and both parties begin to follow through on obligations in the agreement. It’s important this contract is stored safely, but also made accessible to the parties involved, so it can be easily referenced. That can be difficult and time-consuming considering some individuals are just entering the process now and did not previously have access to the contract.

Scanning and emailing a contract can take time, depending on the number of pages. On top of that, you’re relying on that individual to take immediate action if you want to move things along. Most companies store contracts on shared drives, but it’s often not shared between the company and the customer. There’s a risk the two parties have two different versions of the contract.

At this stage, you can map out where this contract needs to go further down in the lifecycle. Upon signature, contracts can automatically be routed to the necessary party undertaking the next step in the process.

Since a contract can be in this stage for some time, and sales teams have other projects on their plate,


automated reminders should be established throughout the lifecycle of a contract. This will ensure all obligations and deadlines within the contract are met.

Stage 6: Optimize

At this stage, sales teams can begin tying up loose ends in the contract. Think of this stage as a performance review for the contract: Did it contain any errors post-signature? Is the customer completely clear and happy with the terms?

This is where it’s useful to look into the contract process to see what has been done, and by who. With one version of the contract stored in a central repository, every action on that document should be recorded for auditing purposes. If there was a mistake made somewhere, you’re provided a history of the contract so you can identify the cause of the issue quickly. Accountability and responsiveness sets a standard of professionalism and honesty, something that can make all the difference for customers.

Stage 7: Renew

Being the last stage of the cycle, it’s not uncommon for sales teams to forget to circle back on contracts for renewal. Having worked so hard already ushering a deal through the process, it’s a shame to see renewals fall through.


Between all the other deals and customers, it’s easy to lose track where your other contracts are at. The ability to set an automatic reminder well ahead of a contract renewal date can give salespeople enough time to consider adjustments before the renewal is executed. It can also alleviate the anxiety that you may have missed something so you can rest assured that revenue will be realized.


A Predictable Pipeline: Automation With an automated contract management solution, repetitive and time-consuming contract processes can become streamlined.

Automation offers key benefits that guide sales teams through all stages of the contract process. This allows sales teams to work through contracts faster while looking ahead into the pipeline to see what’s next in the contract lifecycle, anticipate possible bottlenecks and predict the close of the deal.


With automation, these benefits will simplify the sales process:

Centralize Contracts:

A central, cloud-based location provides visibility and accessibility for all parties in the contract process.

Having a central repository for contracts eliminates the need to email changes to the contract during the negotiation and approval states. This not only streamlines communication between parties, but it negates the risk of having multiple versions of a contract being sent into the workflow.

At the same time, Sales and Legal can have access to the same contract, allow the salesperson to check on contract negotiations, without reaching out the Legal.

Going Paperless:

For almost two decades, electronic signatures have been a completely legal way of doing business, however companies have been slow to adopt this process. With an electronic signature, you have record of the date and time of signature, the individual verified through an email account, and the intent of that agreement. This more secure and transparent than putting ink to paper.

When it comes to keeping the contract process moving, eSignature allows parties to sign a document through a computer or mobile device, allowing parties to approve

https://www.docusign.com/electronic-signature-legality


contracts while they are outside the office or in transit while eliminating the need to track down individuals for a physical signature.

Tracking & Notifications:

The ability to track the contract status keeps everyone in the loop over what actions have been taken, what still needs to be done, and who is responsible for those actions. This is essential for building your predictable pipeline and allows for sales teams to pinpoint delays and better forecast the close of a deal.

If a contract is sitting idle, awaiting action from an individual, that person can be notified to take action. It increases accountability and compliance through the entire contract process. Tracking features can create an automatic audit trail, recording when an action was taken and by whom.


Start Closing The Quarter NowSales teams want their customers to trust the company they are dealing with. Establishing a business process that is organized, transparent and secure will not only deliver an accurate contract on time, but build a positive reputation for the salesperson and the company.

With unpredictable roadblocks being inevitable in the contract process, there are only so many things a sales team can do to close contracts on time. A proactive approach can line up the steps in the contract process to make them easier and faster to check off.

Imagine not spending the final weeks of the quarter or year scrambling to make phone calls to close a lackluster contract. Instead, imagine accurately predicting the close of your contracts from the start of the contract process.

Get your ducks in a row now, and start forecasting a panic-free close to the quarter.

SpringCM is a secure cloud platform that manages contracts and all types of documents seamlessly across desktop, mobile and partner applications like Salesforce. We go beyond standard contract and document management with advanced workflows that automate manual tasks and complex processes to speed time-to-revenue. SpringCM makes it possible to optimize collaboration and processes across Sales and Legal, as well as with prospects and customers.

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Contributors:Monica PetersonAccount ExecutiveSpringCM

Nick ZolfoBusiness Development RepresentativeSpringCM

Nick OboikovitzAccount ExecutiveSpringCM

Allyson ClarkTeam Lead, Client ServicesVirsys12

Emily BurgerAttorney

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http://go.springcm.com/springcm-contract-demo-request