Advantages And Disadvantages Of Long Term Agreement

Published on September 8, 2021

In addition to duration, there are other differences between long-term and short-term contracts. Even if you offer top-notch service to your customers, it`s never certain that they will stay with you. A short-term contract implies a certain degree of unpredictability. We`re all dealing with customers or customers who simply can`t be satisfied, no matter what. In the case of short-term contracts, these angry few will probably disappear as soon as their contract expires, without fault of their own. A long-term contract is an agreement if an agency and a client have serious plans to work on. We`re not talking about creating a new logo. Longer-term contracts can help to enhance safety in buildings, as cleaning staff are familiar with residents and their patterns of permitted use of buildings. Custodian banks can learn to be aware of the people who need to show up at certain times in certain parts of the building and inform the customer of potentially suspicious activity. What is a long-term contract in terms of timing? Anything that takes about 6 to 12 months: if you work with short-term contracts, you give your competitors repeated chances to debauch your customers. Imagine that if you bring customers to 3-5 year deals, it gives your competitors a chance to steal your business every 3-5 years.

If you work with one-year contracts, your competitors have a new chance to steal from your customer every time their short-term contract expires. Also, the need to hire additional labor during this learning period can cause you to lose money in your account for a certain period of time. As an agency, you may think that a long-term contract is the best way to bring revenue into your business. All agencies want to hear these magic words: “Let`s sign an agreement.” But a long-term contract is not always the best option. If you can come to a customer and tell them that they can leave their contract after a short period of time, or even at any time, they will probably give you a chance. What for? Because they don`t put the long-term protection and security of their business in your hands and hands. What will happen if your company fails to pass the services you described in your sales interview? If the customer has only accepted a short-term contract, they already see the light at the end of the tunnel and simply select a new IT service provider as quickly as possible. . . .