deathbysales

Vice President, Sales

Contract Reviews

Does your company have a policy on redline/contract reviews? Example: we will not entertain redlines on a deal under x amount or we won't sign your paper you must sign ours?

We are kicking this can around; I am curious how others are handling this in the SaaS world and if you have a policy in place how does it resonate with prospects?

I should also note the team is very anti having this policy in place.

☁️ Software Tech

😜 contracts

🤞 Negotiation

17 comments

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BigShrimpin

Catalyst

Account executive

yes but it inevitably ends up going to the wayside when they realize that they still want the money
the best policy is that you're anti ridiculous demands like lifetime TFC or unlimited liability but be realistic enough to get things done

Pachacuti

Politicker

They call me Daddy, Sales Daddy

How small is the deal threshold? And what are the demands? Every deal should be looked at holistically.

deathbysales

Politicker

Vice President, Sales

50k, I tend to agree every deal should be looked at holistically. I am trying to see both sides of this from a legal perspective and sales.

medhardwaredr

Opinionated

Director of Sales NA

Sell through the channel! They take care of that stuff. It’s great!

FormerStartupJobHopper

Tycoon

Yes, same exact policy. I think for under $100k is the threshold. Our ASP in new business sales is like $10k so in practice it only comes up occasionally and if you get over around $50k they will make an exception but won't realistically change much in the Ts and Cs.
All that to say yes we have roughly that policy and stick to it and its typically fine. But we are a publicly traded company doing SMB deals.

deathbysales

Politicker

Vice President, Sales

Thank you for the info. Curious how your org positions that to your prospects? It sounds as if you're not having much pushback with it.

FormerStartupJobHopper

Tycoon

We tend to just explain as diplomatically as possible that we do hundreds of these deals per month and it is not economically viable to customize every deal's Ts and Cs or our legal team would be bigger than the actual company lol

NoToBANT

Catalyst

Senior Account Executive

We have threshold of $45k - anything under we don’t accept redlines or their paper

Anything above we will entertain

Ultimately it has to be looked at on a case-by-case basis. If the difference in signature is an entire quarter then maybe worth looking at their paper

Revenue_Rambo

Politicker

Director, Revenue Enablement

The whole idea came about to help companies put a minimum $$ amount on the risk they assume with any particular deal. Theoretically the more a contract strays from standard language the more risk the company takes on.

The issue I see now is that a newer round of leaders never understood the above concept. Instead they are incorrectly using it as a means to guarantee a minimum transaction.

deathbysales

Politicker

Vice President, Sales

Agree, I think they are approaching this with sales incorrectly. Sales people are also sales people and are only viewing this as an obstacle in getting them to close a deal. Instead of trying to overcome this objection with their clients they are saying no other sales orgs do this yada yada yada.

Revenue_Rambo

Politicker

Director, Revenue Enablement

Sales reps have an uncanny ability to suss out BS. Run the tape back and see if it’s possible to define WHY the policy is in place. If it’s about minimum deal size and nothing else then it might be time to revisit the policy.

At the same time I’m also scratching my head why they are complaining and trying to shrink their own deals.

Sunbunny31

Politicker

Sr Sales Executive 🐰

Agreed with all of this. As a rep who can't stand arbitrary bs, I'm often good if I know why something is in place.
And that also informs when I ask for the exception so I can build an internal business case as to why I need the option to violate our own rules.

oldcloser

Arsonist

💀

I’m really not sure why this is a thing. Big orgs have CLOs an a deal desk. Little ones have rules that bend and sellers that can usually keep a structure together. If they can’t, they have management who can play along and optimize. Why do we need an overriding policy? Too many fucking rules.

pirate

Big Shot

🦜☠️ Account Executive

My previous org has no changes to under 20K contracts because honestly it is a big headache

CuriousFox

WR Officer

🦊

Not really. Legal will take a look at anything we need them to.

Justatitle

Big Shot

Account Executive

In a former org any contract less than 15k ACV would not allow redlines. For contracts above 60k we’d entertain their papers but rarely would it come up. Only time it mattered otherwise was for an MNDA

kittychachas

Valued Contributor

VP/Director of Sales

We didn’t have anything in writing but a use your own judgement type of rule.

Generally, I wouldn’t waste my time doing redlines on a $100K ARR deal unless they plan on paying all three years upfront.

Even then, the redlines might be something like we will slightly adjust this language, or remove the auto renew clause. But we weren’t negotiating or doing things like increasing our indemnification for that level of spend.

The flip side of that is most customers with that level of spend weren’t interested in doing lengthy revisions so it was never really a recurring issue.

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deathbysales

Contract Reviews

17 comments

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