When you sign a contract with a new customer, there’s a good chance they negotiated your price increase clause.
Now that you have a mishmash of price increase mechanisms across your customer base, you’ve got a lot of variables to track…
- How much do prices increase by? Is it 5%, an index, a specific measurement, or a mixture?
- Is there a cap on price increases e.g. 7%?
- How often can prices be increased?
- Do you have to give sufficient notice before enacting a price increase?
- Does the customer have the right to terminate the contract if they don’t accept the price increase?
- Is there a protected period during which prices remain frozen e.g. the Initial Term?
- Do these rules vary depending on product, region, or subsidiary?
- What is the price-adjusted annual fee on this contract, given that what’s written was at the time of signing?
That’s a lot to manage for even a few 10s of customers, let alone 100s or 1000s. If you can’t point to a source of truth so that you know exactly how to work with each customer, you’re probably leaking revenue.
