What is Agreement Management?

Sellers often struggle to get error free, price-optimal quotes in front of their customers. When it comes to agreements with quantity commitments or unique contract terms, manual processes add to that struggle by creating unneeded roadblocks and complexity. A few common pain points for sellers include difficulty prioritizing and managing active agreements, a lack of collaboration between sales and pricing teams, the inability to quickly update prices, lost revenue due to prolonged sales cycles, and more.

In this blog post, we’ll take a deep dive into B2B customer agreements, including what agreements are, why they’re so difficult to manage, and how to more efficiently negotiate and manage agreements to close more profitable deals.

What are B2B agreements?

Zilliant defines agreements as a specific price that a customer negotiates, which falls outside of the company’s standard price list or matrix. Customer-specific pricing agreements can be long-term contractual agreements or simply the discount a customer expects to receive for some period of time on a set of products.

What is B2B agreement management?

Agreement management, also known as deal management, is the process of negotiating, managing, and renewing customer-specific pricing. It covers all aspects of the agreement lifecycle - from proposal and rollout to amendments and renewals.

The agreement management process should be a continuous (or dynamic) collaboration between a B2B company’s pricing and sales teams. However, most B2B agreements are still managed in static systems, like spreadsheets, or directly in an ERP.

Why are B2B agreements difficult to manage?

Most B2B companies manage agreements in spreadsheets and across multiple teams, which is woefully inadequate to handle the volume of customer-specific prices and speed of cost changes in the market.

Some time- and resource-wasting issues that exist in most agreement management processes include:

• Subpar initial price setting: When winning the deal is the primary motivating factor, prices are often set below acceptable limits and applied inconsistently across customers. This leads to significant price variation and misalignment.
• Significant time spent updating agreements: The pricing team usually emails spreadsheets with recommended price changes to the sales team, who adjust the numbers and send them back for approval. Updating prices for cost pass-through can be challenging, as it often requires several rounds of internal negotiation before reaching the customer. Historical tracking and version control are often a challenge with these iterations.
• Volume commitment compliance challenges: Some customer agreements are tied to volume commitments. When agreements are managed in spreadsheets and ERP systems, companies lack a systematic approach to monitor and proactively enforce volume commitments.
• Set-and-forget conundrum: With sellers managing hundreds of agreements simultaneously, they often allow key opportunities to capture additional margin to pass, without even knowing it. Since active agreements represent most of the annual sales revenue, this results in missed revenue.
• Administrative issues: Agreements tend to live in a variety of systems, on hard drives, or in email inboxes. There is no easy way to quickly locate and mass update agreements.
• Pricing and sales misalignment: As B2B companies adopt corporate pricing strategies and invest in better pricing tools, pricing teams struggle to ensure that target prices are upheld throughout a negotiation cycle.  Pricing exceptions fall outside the pricing team’s control and are often misaligned with the go-to-market pricing strategy.
• Difficult to update: Simply knowing how many agreements exist in your business and how profitable they are is nearly impossible. When prices need to move, an agreement-by-agreement, line-by-line change is costly, time-consuming and error-prone.
• Inability to set prices at different thresholds: Your strategy may require a certain product margin at the product category or SKU level. Dispersed agreements and manual processes limit the level of granularity you can achieve.

How do you more efficiently manage B2B agreements?

Zilliant Agreements Management simplifies customer-specific pricing so sellers can deliver accurate, revenue-optimal deals.

Zilliant customers leverage these capabilities to increase speed and visibility across the agreement lifecycle. This empowers sales reps to negotiate, finalize, and revise contracted pricing with ease, while ensuring data integrity to their ERP. With Zilliant Agreements Management, businesses close better deals, ensure pricing boosts margins, and remain agile in a highly dynamic market to maximize revenue.

What are the core capabilities of Zilliant Agreements Management?

• Model products, bundles, and configurations based on purchase commitments and unique contract terms
• Recommend optimal pricing with integrations to Zilliant Price Management and Price Optimization integrations
• Manage approved customer-specific prices and automate use for future orders and purchases
• Revise pricing agreements based on evolving business and customer conditions

What are the key benefits of Zilliant Agreements Management?

• Simplify Processes: Centralize agreement prices to reduce admin workload and increase time spent selling. Say goodbye to spreadsheets. 
• Capture Additional Margin: Proactively monitor, amend, and renew agreements based on business changes such as volume commitments or Consumer Price Index, to reduce margin leakage 
• Limit Gut Feel Pricing: Empower sellers to understand the financial impact of price changes within contracted pricing across key KPIs to increase revenue 
• Boost Customer Sentiment: Streamline the creation, negotiation, and roll-out of customer specific pricing to reduce time to value

Ready to leverage Zilliant Agreements Management to decrease rogue discounts and increase win rates? Visit our Zilliant Agreements Management page to learn more.