“I am a pretty versatile fool when it comes to contract, business and such things. I have signed a lot of contracts in my time and at sometime I probably knew what the contracts meant, but six months later everything had grown dim and I could be certain of only two things, to wit:
One, I didn’t sign any contract.
Two, the contract means the opposite of what it says.”
– Mark Twain
One of the most important developments in B2B media over the past couple of years has been the explosion of new lead generation companies and publisher lead generation services. They come in many varieties and utilize many different methods. Some of these companies are content publishers themselves and offer lead generation programs via content syndication or content sponsorships. Others specialize in data mining and telemarketing. A third type simply buy leads from other 3rd parties on your behalf, bundle them up and sell them on to you.
At Just Media, Inc., one growing trend we’ve seen among these B2B lead generation vendors has been a notable shift in the standard terms and conditions that many offer in their contracts. Clients and agencies should absolutely be aware of this, as a failure to properly manage contract terms and conditions could result in failed programs, contract disputes, lost money and massive headaches.
Below are examples of some REAL terms and conditions from lead generation companies that I have encountered even just recently. You may find them perfectly agreeable. But I suspect that many clients will be surprised at what terms and conditions are now considered standard on many contracts.
TOP 5 CONTRACT TERMS AND CONDITIONS TO WATCH FOR:
1) When is payment due?
Analysis: An important thing to always be checking. Some vendors bill based on delivery each month, while others may demand a partial of full payment up front. Make sure you know!
2) VENDOR reserves the right to edit or replace client’s content with another offer if deemed necessary by VENDOR to achieve lead goal, or if client’s asset(s) for promotion are not delivered by the contracted due date.
Analysis: The vendor is using this term to protect themselves but it can be highly problematic for clients and agencies for two clear reasons.
a) If the advertiser misses a deadline for delivering the content assets for a lead gen campaign, the vendor can choose to run some other asset in its place. This may be some piece of editorial content that the Publisher has produced, or it may be an older asset from the advertiser. In either case, leads generated from these assets would not be derived from the asset that was intended to be promoted.
b) I suspect that the lead gen vendor would be violating many advertisers’ own legal policies if they alter their supplied asset to make it “perform better.”
3) CANCELLATION TERMS: Contract may be canceled only with 90 days notice and will AUTOMATICALLY RENEW for an additional program term unless canceled in writing with 90 days notice.
Analysis: Consider this for a second. You’ve ordered a 3 month lead generation program and if you don’t want to AUTOMATICALLY RENEW it for another term you have to cancel it with 3 month’s notice. What could possibly go wrong? Clients and agencies should always be on the lookout for language regarding auto-renewal of program terms. This is something that can really cause a mess if it’s not noted and addressed before the signing of the contract. At Just Media we make it standard practice to strike this sort of language condition from any contract we sign.
4) CLIENT is responsible to pay for promotional media run by VENDOR in support program, NOT for the leads received.
Analysis: This is something that has popped up in a few places in different ways and it might be hard to notice the problem at first. Here is the basic scenario:
A vendor may guarantee delivery of a certain number of leads, but on the contract you might notice that they actually bill you for the promotional media they run to achieve that goal; not for the number of leads received. Why is this important? Keep in mind that the amount of media needed to reach the contracted goal may (and likely will) far exceed what they prescribe on the contract.
What if you decide to cancel the program mid- term due to poor performance or budget cuts? If the vendor has delivered 20% of the guaranteed leads, but 100% of the contracted media, you would be sent a bill for 100% of the program. This is why clients and agencies should pay particular attention to what it is that you are really paying for when you sign a contract. Where there is a lead guarantee make sure you are paying for leads delivered, not for media that has run.
5) VENDOR will charge CLIENT for leads delivered beyond contracted goal.
Analysis: Not much explanation needed here. Is the vendor going to charge you for leads delivered above your goal or are these treated as value add? Make sure you know, or you may end up with bills exceeding your budget.
Having covered the terms and conditions, here are three questions you should also be asking every lead gen partner before you start a program:
1) Where is the VENDOR getting their leads? Are they engaging with their own audience or buying leads from another source and bundling them up for you? If a vendor is acquiring leads from other 3rd parties you encounter two problems:
a) Quality assurance diminishes as more invisible partners behind the scenes are involved with getting those leads. Who actually go the lead? How did they get it? What tactics did they use? How much time passes from the initial contact to the time the lead is delivered to the client?
b) Each company that passes off a lead is going to add in their profit margin, thus inflating the cost. Lead gen “resellers” usually argue that their clout and volume buying in the industry allow them to get better prices than you could pay direct to those suppliers. In many cases we actually find this not to be true.
2) How is the VENDOR setting up the program? Can you promote multiple assets? Can you change assets during the middle of the campaign?
Analysis: Don’t assume anything in regards to the above. Many content syndication programs involve development of one landing page to promote a single whitepaper. If you try to change it out they may want to charge you an extra fee for web development.
3) How long does the VENDOR have to deliver on their guarantee and what happens if they fail to meet the goal? Do you pay a pro-rated portion or does the program get extended for longer?
Analysis: Once again, consider the ramifications for your campaign if you should run short on the delivery goal or if the campaign has to extend past the completion date. Can you allow for that? Make sure the vendor knows and agrees to the terms that you require in order to remedy any under delivery.
If you pay close attention to the contract and ask the right questions, you can avoid a lot of potential headaches with lead generation programs. A best practice is to establish a client or agency specific set of terms and conditions with each vendor and make sure to enforce it every time. If using a vendor’s contract, make sure to read it carefully every time.
Just Media offers expert lead generation program planning, buying and management to our clients. So if you have any questions about these lead gen program or would like to discuss any tips or best practices please feel free to send me an email kevinflint@justmedia.com.
Kevin Flint
Just Media, Inc.
