Best Practices: Renewals take planning
1 Aug, 2006 By: Bruce Wilson Landscape ManagementCompanies with high renewal percentages generally provide high levels of customer service. They're good at matching service levels to customer expectations. But all companies have service glitches. Companies lose employees that customers like. Many things can go wrong that can end up damaging the customer relationship.
Assess the relationship
It's always wise to plan ahead when it comes to renewals. The "best practice" is to have a system in place to remind you 90 days prior to a contract expiration that a contract is coming up for renewal. Next, bring it up at a staff meeting and assess where you're at with this particular client.
Let's consider several items regarding the renewal:
- Have you had any service glitches that might put you in a bad light?
- Have you made any personnel changes that could affect the client?
- How were you doing on the job? Did it look like you would need a larger than normal increase.
- How has the customer's business been doing?
- Have there been any changes in personnel on the customer's side that could affect your relationship?
Next steps
After completing this assessment, you might still run into some obstacles before you can complete the renewal. At this point discuss strategy options to better position your company to get the renewal. You might want to visit the client in person to assess your position.
If you think a price increase is in the works, first take a hard look at your own operations with respect to the job. Are you as efficient as you could be or were some of your cost problems caused by your own inefficiency? Or, did you have high cost early in the contract, but now it is going smooth? This often happens. In this case you might be OK going forward.
With respect to any price increases, first talk to the client about the increase. If you send it to the client in a letter you cannot read his/her reaction. The client might see the increase and decide to go out to bid. If you ask first you can better assess whether you should hike the price and the chances of the contract going out for bid.
This is still a very personal business. The more you can meet face to face during the renewal process, the greater success you will have.
— The author is a partner with entrepreneur Tom Oyler in the Wilson-Oyler Group, which offers consulting services. Visit
www.wilson-oyler.com.
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