5 Questions To Ask
Before Signing a Renewal Proposal

by Mary K. Soergel

1. Do I have the time and resources to consider whether this vendor is the right choice?
   
   Most Executives will answer this question with a resounding "No!" Since the year has already started with the strategic plan set last year during planning sessions, this contract renewal popped up on my radar, and I don't have time for it.
   
   There are likely two scenarios; you are happy with your vendor but should assess the scope of services and terms of the agreement, or you would like to know what else is out there. Both are time-consuming projects that need attention. Our advice? Don't let that contract automatically renew because you don't have the time; you will be missing out on a lot of value and taking on risk. By engaging our team at Ceto, we'll take on the responsibility of these tasks, and we'll call you when we have results, and it is time for you to decide. We want to be the go-to team you can call when one of these contracts comes across your desk; send it to us, and we'll take care of all the details so you don't have to. Ceto's team is well-equipped with the time and knowledge to work with your vendor on your behalf and save you countless hours.
   
   
2. Is the pricing on this proposal fair and reasonable?
   
   You may sign this renewal because you like your rep and know they go to bat for you. Your attorney gave you the go-ahead, so should you sign it? NO! Truthfully, yes, your rep appreciates your business, but that doesn't mean they go to bat for you on pricing; after all, they are in sales. 
   
   Many vendors are offering brand new clients better pricing than what you have in your contract today. It needs to be the opposite; they must continually earn your business every renewal. With Ceto's proprietary database, we house hundreds of vendor agreements for products and services across the banking industry. We have identified more than 450 contract cost components that should be evaluated for cost savings opportunities within the principal agreements of a financial institution. When baseball pitcher Eduardo Rodriguez signed a 5-year / $77M contract with the Detroit Tigers, do you think he used an agent? Yes, he did because there are many components to consider when making such a big decision. In the case of your financial institution, we will be the agent for you. We will negotiate with your vendor and ensure you are signing the best possible deal and have the right mix of quality and tech-savvy services for your customer base.
   
   
3. Does the term length make sense for us, and does the contract allow us to get out if the unexpected occurs?  
   
   There are several possibilities regarding term length and what is laid out in the hundreds of pages of a vendor contract. At Ceto, we've negotiated hundreds of contracts and look beyond the legal perspective to what risks lie within the agreement. We discuss your long- and short-term goals and ensure they are covered in your contract.
   
   
4. What will happen if the service levels drop and the vendor is not meeting our expectations?  
   
   If you don't know the answer, don't sign. At Ceto, our strategic analysts ensure that your service level metrics are laid out in plain sight on your contract. And that you can get paid back or get out for mistakes, poor service standards, or other unexpected occurrences.  
   
   
5. Do I need all these new services they added to the renewal?
   
   Renewals are a great time to evaluate the scope of services within your vendor contracts.
   
   There could be an array of services hiding between line items on your invoice that you have not used in years but are paying for. And there could be an additional ten services that your vendor is recommending you add during this renewal.   Our team meets with each vendor we work with to understand their service offerings and technology coming down the road. We will work with you to understand your vision and create a roadmap to get you there. If there are new services that will help keep your client base happy, we'll work to cover those implementation costs so you can add them now and launch when you are ready.