The selling process is long and winding. You can successfully move your lead through the sales pipeline, reach the final stage of signing the contract, and believe that the bird is in the cage. However, poor contract management can undo all your previous efforts. A deal lost at the last moment hurts the most.
Admit it, we don’t often give the legal process the weight it deserves. Apparently, it has many pitfalls, such as contract drafting delays, contract non-compliance, and lack of collaboration between sales and legal teams. This puts a deal in limbo, up to the point of abandonment, and directly impacts sales KPIs.
An efficient contract lifecycle management system (CLM) can help you overcome the thorns on your path to success. This article discusses the benefits of CLM software for top sales performance. But first, let’s examine some of the typical sales goals it should help you achieve.
Sales team goals
Sales goals give your salespeople a clear roadmap of what actions to take to successfully close a deal. Here’s a brief rundown and an explanation of how each goal relates to contract management.
Low customer churn
It doesn’t feel good to be rejected, does it? Especially when it involves revenue loss. It should come as no surprise that one of the best strategies for expanding your business is to maintain a low customer churn rate.
There are many reasons for customer churn, but the most painful one is when a contract has expired without anyone noticing. This simple but significant oversight can lead to potential disputes and customer attrition.
A surge in win rates
Increasing the win rate is just as important as lowering customer churn.
It’s not just qualified prospects that help increase the win rate but also effective contracting. When sales reps create contracts manually, with documents scattered across various folders, they have little visibility into the deal’s progress. It makes it harder to amend agreements synchronously or get signatures from buyers on time. The result can be a minus deal this month.
Short sales cycle time
Average cycle time shows how long it takes to move from a lead to a successful close. The cycle time reflects all aspects of the sales strategy, including prospecting, objection handling, nurturing, and, of course, close. It also shows the degree of automation in the sales funnel.
Bureaucracy slows down any process, and sales contract management is no exception. Salespeople hate paperwork, as it distracts them from the key goal: closing deals quickly and with fat checks. Instead, they have to manually review contract changes, which is lengthy and tedious, and then pass those silos of information to the legal team.
So, how can we handle this? CLM is the answer to all contract management problems.
The importance of CLM software for sales
From contract creation to contract renewal, CLM software proves to be a lifesaver in pursuing the goals listed above.
Contract creation
Unfortunately, active selling takes only a small part of the salesperson’s time. The rest is routine requirement capturing, sales report creation, etc.
CLM systems let sales teams compile accurate transaction-ready contracts from pre-built templates quickly and easily. This is especially useful when working with similar types of contracts, such as conditional sales agreements, sales of business contracts, agreements for sales, etc. In addition, a typical CLM system has robust analytics capabilities to generate contract management reports with one click.
Contract amendment
Changing contracts can be stressful and even risky. But a thorough revision is a must, including new terms and conditions and definition updates when necessary. Failure to do this can result in inconsistent legal language and missed obligations.
Contract changes are linked to many challenges, but you can manage them effectively with CLM software. Each contract version is stored in a single repository, so contracting parties can easily keep track of all amendments and the team members who made them.
Contract approval compliance
As organizations scale, contract compliance might become unmanageable due to the complexity and sheer volume of contracts. Loss of version control, lack of oversight, and changing standards can lead to non-compliance, reputational losses, fines, and penalties.
CLM automates the contract approval process, minimizing contract compliance risks.
Contract renewal
It’s challenging to manage multiple contracts without a solid CLM system. Notably, it can lead to missing important renewals and losing a great deal in a blink. Using CLM software, sales and legal teams can monitor and proactively analyze approaching expiration dates.
Empowering legal and sales to work together
And last but not least, CLM software strengthens sales and legal relationships. These departments can’t work separately, as both are committed to closing deals.
If the collaboration is patchy, sales teams may grapple with legal challenges such as outdated compliance standards and irrelevant contract wording. Lawyers, in turn, may suffer from working with the wrong version and missing contract termination dates.
With a CLM platform, teams can get everything in order:
- Store all contract versions in one place
- Set up a proper workflow for contract approval
- Get notified in good time of approaching contract milestones
- Self-service through access to all logs
- Get a consolidated view of negotiations and contracting
Using CLM software for synergy between legal and sales is critical to sustainable growth, as it facilitates the smooth transfer of responsibilities between departments.
Wrapping up
A CLM system significantly impacts the bottom line of the sale. It can become an extremely useful tool to help you go paperless and close deals faster. All you need is a reliable CLM solution provider.
AXDRAFT CLM system provides template libraries for quick contract creation and ensures strong version control. It also integrates with electronic signature services, and streamlines live collaboration. The result is more than 137,000 hours saved and over 3,200 satisfied users.
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There are at least three crucial aspects to consider when choosing the right CLM system:
- Easy onboarding and implementation of your specific processes. Make sure your CLM system is aligned with your goals and can be integrated with third-party solutions.
- Features for every phase of the contract lifecycle. Your CLM software must be equipped with all the basic functionality for pre-execution (contract creation, drafting, review, and approval), execution (electronic signatures), and post-execution (reporting, renewal, and termination).
- Business process automation. Zero in on the features that let you put repeatable tasks on autopilot: automatic version control and tracking, customized approval workflows, contract auto-renewal, agreement templates, etc.
CLM software offers a variety of benefits. It was designed to improve contract transparency, shorten the contract cycle, boost contract review and approval productivity, and mitigate legal risks.
CLM systems serve as a central repository for contracts and all contract-related data, accessible to all counterparties. It tracks contract interactions, logs changes, and automates workflows at every negotiation stage. What’s more, it generates reports that let you identify inefficiencies in the contract management process.
Managing the contract lifecycle is your way to control every step of the contract process, from risk assessment and contract creation to contract renewal and termination. This increases the value of contracts and the sales team’s overall performance.