One of the conversations we’ve been having with agency owners is the pros and cons of annual contracts, especially for ongoing offerings like web maintenance, SEO packages, or any other product or service.
The conversations have circled around the idea that annual contracts invite clients to reconsider the purchase. Do they really want to renew for another year? A couple of agencies have talked about the success they’ve had with evergreen contracts, which have the annual increase built in, and there’s a 30-, 60-, or 90-day out, but they are perpetual contracts that just keep going.
So the question is — are annual contracts really your smartest option?
View Video Transcript
Hey, everybody.
Drew McLellan here from Agency Management Institute this week coming to you from home here in Denver.
You know, I've been having some conversations with agency owners, we’re in our peer group cycle. And one of the conversations we've been having is the pro and cons of annual contracts, especially for things like web maintenance or things that are just your goal is – or SEO packages. Your goal is for that just to be ongoing.
And maybe if you're doing a good job, that just keeps rolling along. So depending on the work you do, depending on the kind of contracts you have, probably depending on the kind of clients, some clients are going to mandate an annual contract or if it's a government entity or an RFP, it's going to have a start and end date. But for some things that you do that are purposefully ongoing and you just keep adding value, the longer you do it, like web maintenance or something like that might be worth thinking about a perpetual contract as opposed to an annual one.
Some food for thought. All right.
I'll see you next week.
