We have dozens of loyal customers who have stayed with us for years, but we do not have formal term contracts with them. How do we secure written, assignable agreements before going to market without making our customers feel like we are locked-in or preparing to dump them?

Question

Tyler Smith · Accepted Answer

Handshake agreements are a liability during a transaction. Buyers view uncontracted revenue as a flight risk and will discount your valuation multiple accordingly. To secure written, assignable contracts on your exit runway, you must frame the transition as a value-add for your customers rather than a corporate checklist.

Do not approach your customers with a cold, legalistic document out of nowhere. Instead, use your regular account reviews to introduce a service level agreement or a preferred pricing program. Tell your clients that due to rising costs and supply chain dynamics, you are offering to lock in their current pricing and resource allocation for the next twelve to twenty-four months in exchange for a formalized agreement.

When drafting these contracts, ensure they include a standard transferability and assignment clause. This allows the contracts to remain valid when ownership changes hands, without requiring the buyer to get customer consent post-close.

To execute this systematically, create an issue on your leadership team's weekly Level 10 Meeting board. Assign a Rock to your sales leader to transition your top twenty percent of customers, who typically represent eighty percent of your revenue, to these new agreements.

By positioning the contract as a tool to protect their pricing and guarantee operational capacity, you strengthen your client relationships while building the legally secured recurring revenue that buyers pay a premium to acquire.