January symbolizes fresh starts and new beginnings. Like many business owners, I’m excited to flip to a new page, eagerly anticipating the clean slate that lays before me, ready to fill it with projects, plans and new adventures. Now that I’m through the holiday rush, I’m trying to give myself a short break to reflect upon what went well and what didn’t (and why) over the past year, and indulge in a bit of quiet contemplation and goal-setting for the year ahead. I feel I’ve more than earned it.
Here at Richardson Media Group, the New Year also marks a time for assessment and re-evaluation on both sides of the client-agency fence. I welcome this cyclical tallying up of successes and failures as a natural and healthy part of doing business. It’s important for my clients and for me, in my role as their agency partner, to consider the pros and cons of continuing to work together and for us to share our future intentions. Going through this process may be a bit cumbersome, but ultimately should result in a better outcome for each of us.
Annual contract negotiations can be stressful in any industry, but for small marketing firms like mine, losing one large contract can be devastating. No business owner intends to get into the situation where she is overly dependent on a single client, but it’s very easy for that dynamic to happen. We, small shop owners tend to run lean in almost every area: staffing, supplies, infrastructure, and our greatest resource of all, time. The investment of time and energy we need to make to build trusting and productive partnerships with our existing clients can come at a huge cost to our ongoing lead generation and new business efforts.
Let’s say for the purpose of this article you’re fortunate to have some client relationships that you’d like to re-sign for another year. Here are five tips to remember as you seek the contract renewal win-win:
- Leave enough time to negotiate terms before the contract is finished. It’s important to give both parties time to prepare for a contract renewal. Mark your calendar with a preliminary contract review meeting about a month in advance of the contract end date and try to follow through with it.
- Review the existing contract’s scope of work, and ask yourself whether it was sustainable over the past year. Did you end up spending more time than you had estimated on this account? Did your client often make requests of you that went above and beyond your agreement? Now’s the time to think about these factors and consider how they affected your business and whether you need to renegotiate your terms.
- Head into contract renewals with a concrete sense of what you’ve accomplished for your client over the past year. Present a visual picture of the work you’ve completed – using an easy-to-read spreadsheet or your favorite presentation app – and offer solid data to prove your ROI. The key is to showcase your company’s value in as simple and direct a manner, as possible.
- Never assume that your client is automatically going to re-sign with your firm. Prepare your firm for potential “break-ups” by continuing to cultivate new business prospects throughout the year so that you aren’t caught off-guard.
- Try to stay positive and upbeat. Hopefully, both you and your client will resign on the dotted line, but there’s always the possibility that things won’t go the way you’d like. I live by the mantra, “Never burn a bridge.” I can’t tell you how many times I’ve seen new referrals or found great opportunities to collaborate with past business associates further down the line.
As unpleasant as it is to lose an account, the truth is, even when you do absolutely everything you can, some degree of client attrition comes with the territory. The more you can prepare yourself financially and emotionally ahead of time, the quicker you’ll rebound from a non-renewal.
Here’s to a successful contract renewal season and a prosperous and creative 2017 for all!