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Lesson #2 For Growing A Sales Team: SLAs

Terms and Conditions Lesson # 2 for growing a sales team:  Never negotiate service-level agreements (SLAs) and terms and conditions (T&Cs)

One of my early employers utilized a standard service-level agreement (SLA) that was far too biased in our favor. We thought we were managing our economic risks, but in reality we added a huge and unnecessary overhead to the process of negotiating deals.

The boiler-plate offered a 30 business day response time for software updates, but if a buyer pushed we could do it 20 (in reality it was always under a week).  We would then have to agree on what would be included in the upgrade, level of effort required and total man hours.  Once we agreed on the delivery we’d negotiate service credits because the standard contract had no remedies in the event we didn’t meet our SLA.  Veteran buyers saw through much of this and pushed hard for even better deals.

We also let customers negotiate terms and conditions because we didn’t want to lose deals (already damaged by the unnecessary negotiations above). In so doing, we created a patchwork of non-standard contracts that made it much more complicated to manage the business as it scaled.

Eventually, we migrated to one standard SLA for normal customers and a high-level SLA for premium customers.  This made the sales process much smoother and allowed us to begin billing sooner.  Creating non-negotiable terms and conditions has been a standard process ever since.

 

Until next time,

Crowe Mead Signature

 

 

 

 

Crowe Mead

www.betterleadershipblog.com

Posted on by Crowe Mead in Leadership, Sales, Strategy

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