Challenging the Status Quo in Service Provider Contracts

In the realm of business, there exists a little-known secret that remains largely unchallenged. It revolves around the pervasive expectation that service providers will continue their engagement beyond the initial 12-month contract. Surprisingly, this practice is questioned by fewer than one in ten businesses, thereby perpetuating an overlooked norm.

Within the realm of my daily professional endeavours as a property asset manager, my responsibilities span a diverse spectrum. From overseeing security and cleaning operations to managing M&E (mechanical and electrical) systems, marketing endeavors, pest control, and PPMs (planned preventative maintenance), my repertoire encompasses an extensive array of tasks. Essentially, if there is a need, I possess a contract to fulfill it. With the exception of intricate mechanical processes, the tasks currently outsourced to external parties could easily be taught and assimilated by individuals within my organization. Consequently, the potential to phase out existing suppliers and embrace more contemporary, agile business models fueled by technological innovations is within reach. Unfortunately, human nature often inclines us to gravitate towards familiarity and resist change, even when such resistance proves counterproductive.

Regardless of whether you collaborate with a marketing agency, a social media manager, or a team of writers, it is imperative to foster face-to-face interactions once the initial 12-month period has elapsed. Regrettably, after the initial phase of exploration and discovery, many contractors tend to settle into a state of stagnation. Automated processes and even artificial intelligence systems assume the reins of managing your account. In this context, you find yourself transitioning from the status of a fresh and exciting new client to that of a reliable and established cornerstone of their business.

Never shy away from requesting others to compete for your business, and consider developing a comprehensive Tender Pack that meticulously outlines your specific requirements. Personally, I annually embark on this endeavour, meticulously evaluating my list of contractors. This practice assumes particular significance when dealing with substantial contracts that necessitate significant upfront expenditures, such as the acquisition of specialized equipment for extended three-year agreements. Irrespective of the nature of the contract, each renegotiation cycle invariably culminates in terms more favorable than the preceding agreement. Such favorable adjustments may stem from innovative solutions or the elimination of superfluous expenses that no longer hold relevance.

Misconceptions often abound regarding the feasibility of requesting service upgrades, particularly in the realm of packaged services like web hosting or social media tools. Contrary to popular belief, most providers are amenable to such requests. As a testament to this fact, I recently found myself contemplating the cancellation of certain standard services critical to my design requirements, which incidentally were extensively employed by writers and social media agencies. Recognizing the imminent risk of losing me as a valued customer, the service provider promptly upgraded my platform to the next tier, thus preserving our mutually beneficial relationship. As an existing customer, you represent a reliable stream of revenue, and it is highly probable that you have already maximized the potential benefits of their service within the initial 12-month period. Consequently, service providers anticipate challenges from discerning companies like yours, albeit with a prevailing expectation that most will acquiesce to the status quo.

We currently inhabit an era characterized by lightning-fast advancements in artificial intelligence and technology. A mere few decades ago, computers were an unfamiliar concept confined to specialized domains. Today, they permeate every aspect of our lives, even residing in our palms, guiding us on what to have for dinner. Considering the rapid pace of innovation, it becomes evident that companies failing to embrace change within a comparable timeframe following the initial 12 months are unlikely to deliver the value commensurate with your investment.

Therefore, always bear in mind that, irrespective of the service or its associated costs, engaging with customer retention teams after the initial 12-month period is essential. Prepare to be pleasantly surprised by the remarkable outcomes that can be achieved when you muster the courage and initiative to voice your needs and desires. And as you navigate the landscape of self-employment or entrepreneurial endeavors, it is important to remember that you are simply demanding from service providers what your own clients continuously demand from you.