One of the main challenges of renewing contracts with multiple parties or stakeholders is to ensure that everyone is on the same page regarding the goals, benefits, and expectations of the renewal. If there is a lack of alignment or consensus among the parties or stakeholders, you may face difficulties in reaching an agreement, resolving conflicts, or delivering value. To avoid this pitfall, you need to establish a clear and consistent communication plan, identify and engage the key decision-makers and influencers, and align the renewal objectives and outcomes with their needs and priorities.
Employ a proven sales methodology (such as BANTT, MEDDIC, MEDDPICC, etc) into your renewal framework to make sure that you have covered the key drivers of each renewal deal. Just because it is an existing customer, doesn't mean that it is an "easy" sale. You still need to ensure that you understand things like timelines, who the economic buyer is, the approval process, and budget. These methodologies give you a common language to use with your sales reps and executives and standardize the internal forecasting process.
Alignment is one of the most important part of the process to be considered during contract renewal. Getting to know the client needs, objectives and challenges is crucial for a successful renewal, without being on the same page you will not be able to deliver what will be satisfactory to the client. Another factor to consider is managing the client expectations during the renewal after getting the needs and objectives as sometimes what is requested by the client is undoable.
Another challenge of renewing contracts with multiple parties or stakeholders is to maintain accurate and complete documentation of the renewal process and the final contract. Poor documentation can lead to confusion, errors, disputes, or non-compliance, which can jeopardize the renewal success and the relationship with the parties or stakeholders. To overcome this challenge, you need to follow a structured and standardized documentation process, use clear and concise language, and verify and validate the information and data in the contract. You also need to store and share the documents securely and accessibly, and ensure that they are updated and reviewed regularly.
In the VUCA world, Contract Renewals - could be as daunting as a new one. Usually, SOW increases but Management wants a reduced Price; such pressure may lead to a Tunnel vision in closing the Deal while resulting in an Agreement that doesn't extend the same Value when renewed.
In my experience, an organization that doesn’t have documentation or SOP’s for their employees is never good. However in purchasing this is even more so. Documentation telling each level the next role, responsibility, and purpose/value of the step is crucial to ensure a smooth transaction and successful contract implementation.
Proper documentation and discussing small details is a key factor to manage a successful contract renewal. The client needs to be aware of his rights and also his duties so no surprises would come up after the renewal.
A third challenge of renewing contracts with multiple parties or stakeholders is to manage the timelines and deadlines of the renewal. Unrealistic or inconsistent timelines can cause delays, stress, or dissatisfaction among the parties or stakeholders, as well as affect the quality and efficiency of the renewal. To prevent this challenge, you need to plan and schedule the renewal activities and milestones in advance, and communicate them clearly and frequently to the parties or stakeholders. You also need to monitor and track the progress and performance of the renewal, and adjust the timelines as needed, based on the feedback and changes from the parties or stakeholders.
A fourth challenge of renewing contracts with multiple parties or stakeholders is to control the scope and changes of the renewal. Scope creep refers to the unplanned or unapproved changes or additions to the contract that can increase the complexity, cost, or risk of the renewal. Scope creep can occur due to changing needs, expectations, or requirements of the parties or stakeholders, or due to poor communication, negotiation, or documentation of the renewal. To avoid this challenge, you need to define and agree on the scope and changes of the renewal upfront, and document them in the contract. You also need to establish a clear and formal change management process, and evaluate and approve the changes based on their impact and value.
A fifth challenge of renewing contracts with multiple parties or stakeholders is to comply with the legal or regulatory requirements and standards of the renewal. Legal or regulatory issues can arise due to different laws, regulations, or policies that apply to the parties or stakeholders, or due to changes or updates in the legal or regulatory environment. Legal or regulatory issues can result in penalties, fines, lawsuits, or termination of the contract, which can damage the reputation and trust of the parties or stakeholders. To overcome this challenge, you need to conduct a thorough and timely legal or regulatory review of the contract, and consult with legal or regulatory experts or authorities as needed. You also need to ensure that the contract includes the necessary clauses, provisions, or warranties that protect the rights and interests of the parties or stakeholders.
The biggest pitfall when managing a complex renewal process with multiple parties is misunderstanding the political map and decision-making process. Before you know the decision criteria and how each party will affect the decision, you may apply too much credence to feedback from the wrong party, or misunderstand the target of the actual buyer.