In the world of sales technology, CRM, sales intelligence, proposal generation, and sales analytics tools get all the attention.
But there’s an unsung hero in the battle for improved sales performance – contract management software.
On average, contracts take 3.4 weeks to get approved, many times stalling as the customer and Legal teams hold it up for weeks while the buyer moves on to other priorities and deals fall off the radar? Did you also know that using a contract management solution can reduce contract approval time an average of 82%?
If you could reduce your contract approval time from 25 days to 4 days, what difference would that make to your sales cycle? How many more deals could you progress through your pipeline? How much more revenue could you generate? How would your organization benefit and grow from a streamlined process?
These are compelling questions to consider as you develop your sales operations goals and plans for the year ahead.
5 ways contract management software helps close deals faster
Here are five ways contract management software can reduce contract approval time from weeks to days.
1. Simplifies contract creation
The typical contract process begins with many back and forth emails when the sales rep requests the contract and the legal department creates it and makes revisions manually, either from scratch or using templates (which may be outdated). This is a time-consuming and error-prone process that is fraught with risks – think “version control.”
A contract management solution automates contract creation according to the Legal department’s requirements. Eliminating manual contract generation and approvals saves time and ensures accuracy. Up-to-date templates, automated workflows, redlining, and e-Signature reduce the time it takes to create contracts, share, edit, and sign.
2. Standardizes organizational collaboration and approvals
Automated workflows ensure sales reps follow a structured process when getting approvals, adding the right stakeholders to keep everyone in the loop. Triggers and notifications keep deals moving forward.
All internal departments work from one digital environment that’s updated in real time. Centralized conversations and contract documents are located in one place. This transparency places guardrails on contract creation and ensures Legal compliance as well as profitability.
Related: Find out more about the ins and outs of software contracts and how you can negotiate them to their fullest potential.
3. Streamlines the negotiation process
Contract negotiations and buyer signature are where deals typically stall. The easier it is to get approvals and signatures, the better.
Contract management software implements online contract redlining, real-time status tracking, and contract visibility in a collaborative digital environment. This minimizes the back and forth of emails and revisions and hunting down who has approved and who needs to approve next.
4. Creates and stores contracts directly from your CRM
Once a deal is signed, you may not think about it again until you need it. But how easy is it to locate?Faulkner Information Services estimates that nearly 10% of all signed contracts are lost. As in, gone forever.
Contracts should be reviewed periodically and be available for review again when renewal time comes around. Contract management solutions include a repository that keeps contracts organized and readily available through your CRM. Signed agreements can be viewed at any time to confirm all the deal terms.
5. Deal progress and approvals tracked in your CRM
Imagine freeing your sales team’s time and energy to focus on working with new customers, rather than constantly following up on deals already in the pipeline. Contract management software includes real-time tracking and notifications on customer engagement, including contract views and edits, approvals and signatures. Visibility into contract progress enables your sales reps to respond faster to buyers and move deals forward.
About twice as many best-in-class organizations report automating their contract management processes than do other organizations. They place a priority on saving money and aligning their performance with stakeholder pressures and business goals.
Best-in-class organizations have figured out that moving the cumbersome, manual contract management process to an automated platform improves efficiency. It frees up resources from sales, finance, legal, and operations that were once spent on tedious and costly contract creation, review, approval, and retrieval.
It’s also worth noting that the best-in-class in Aberdeen’s study had an annual contract renewal rate of 56%, which is more than twice that of all other organizations. A contract management system triggers renewals and helps organizations keep the customers they have, which is a critical KPI for all organizations.
To achieve superior performance, best-in-class companies use technology to streamline their contract process. Greater efficiency puts time and resources back into the hands of all functions involved in contracts. Take a look below at the rate at which best-in-class organizations use an automated contract management solution.
Effective contract management begins with a solid contract template
While the speed and efficiency of contract generation and approvals are crucial to effective contract management, let’s not overlook the importance of having a solid contract template in place before the deal is signed. According to theIACCM, poor contract management costs companies 9% of their revenue when there is disagreement about project scope, inappropriate contract structures, and disputes over pricing. Contract Management software helps alleviate these issues by enforcing rules and ensuring contract accuracy.
Features such as contract generation workflows, use of pre-approved templates, redlining, and deal stakeholder collaboration in one digital environment can improve buyer/seller relationships, ensure contract quality and eliminate errors.
Contract management technology is a sales executive priority
Implementing contract management technology should be a high priority among sales executives. The ability to increase revenue by reducing sales cycles while relieving sales, finance, and legal of the burden of contract creation, approvals, and negotiation is imperative for any manager.
Add to that transparency into the contract's progress, unified data, tracking and informed decision-making creates a level of control over the contract process that manual processes just don’t have.
Find the right contract management software for your needs
Contract management should be part of a larger sales platform that unifies all parts of the buyer’s journey (rather than a standalone tool). It’s essential toconsolidate your sales stack to keep deals moving smoothly through the pipeline and ensure there are no gaps in collaboration among departments and communication with buyers.
When searching for the right contract management software for your needs, look for these value-adding features
Works seamlessly with other tools in your sales workflow
Approval workflows and deal tracking
By understanding the benefits of a contract management solution and moving quickly, your organization and your sales team can start rocking their goals and reaping the benefits of a streamlined contract management process and increased sales efficiency and efficacy in 2020.
As VP of Marketing & Growth at DealHub, Gideon is extremely passionate about helping companies gain a more informed and actionable understanding of the changing landscape within Sales Engagement. He is a regular content contributor in this area of expertise and draws inspiration from being afoot to the latest trends and statistics influencing the Sales Process.