How to Maintain Effective and Profitable Customer Contracts

Lack of contract management is one of the most common reasons that companies leak revenues and profits from customer contracts. I'm not necessarily just talking about a role but a function  a behaviour that in part or whole assures your business relationships.

Let me give you some real examples of what not managing contracts can give rise to.

Not charging the customer properly for base services.

Not applying a change process to agree new developments, charged and any contractual impacts.

Not raising new charges for RPI,or agreed volume rates being exceeded or not achieved.

Not managing the service levels and commitments.

So these are just a few examples and here's the effect they have...

Lost income and profit.

Potential dispute through lack of formal change agreement.

Potential penalty impacts through not managing to commitments.

Add to this risk, relationship and reputational impact. I've been brought in many times to turnaround such situations. Taking contracts from a financially negative and damaged relationship to financially positive and progressive.

Did it take something really special to achieve? Not really beyond a simple understanding of how contracts and customer relationships work.

Looking at the issues,understanding root cause and working within the business and the customer to resolve. But that's the fix, anything which is likely to bite back must have a sustainable solution. 

One that ensures the contract is effective and underpins the essence if what the relationship set out to do. And the answer and guide is in simply applying the contract itself!