There have been typically one of two ways that I handle this issue and it depends on the particular client.  With some of my clients I will actually incorporate an auto renew clause into the contract.  This is less for trying to “get something by them” and more about convenience.  Even in these types of arrangements I will let them know that the initial contract is expiring next month and if your still happy it will just renew for an additional x months. This gives them a heads up on whats going on and also gives them an opportunity to negotiate any changes they want.

The other way is to give them a heads up usually about 1.5 months in advance that the contract will expire at the end of the following month and when can we get together to renegotiate the follow on contract.

If you are doing good work and they have a continuing need this should be a fairly painless process.  The only time it gets complicated is when you need to renegotiate the financial terms of the agreement.

I would always alert a customer first, if you expect to get further business from them.
Expiring Services without alerting the customer is a sure recipe for an unhappy ex-customer.

Jeff,

This may not apply to your specific industry however in technology theanswer is it depends.

If the client is:

1) Solid year over year contributor to your bottom-line or
2) in the incubator stage and the upside in the future is great, then I would work with Sales and the client directly to
establish a formal plan to use the services in a timely manner (extension or otherwise).

If the client is not a heavy hitter for your metric targets, then being more firm and giving 90 to 60 days notice should provide enough
planning to use the services within the original planned 12 month time commitment. Key here is alerting your sales team and the client of
the expiration dates in advance so it’s not a use them today or lose them negotiation but a way to leverage your services expertise to meet
their demands in a timely fashion (which obviously changed since they purchased the services as they have waited this long to use them) for
both parties.

Larry

I would alert the client early on so that there are no surprises even if it is clear in the contract and keep
communicating the event and use these alerts as opportunities to sell more services.

Although I am new to the group, I would have to echo Brian’s comments regarding the auto-renew with notification, it is how I have written my service contracts for the last few years and the pros in doing it this way outweighs the cons.

Don’t be afraid to renegotiate the financial terms of the engagements, keep in mind and also convey to the customer the services that you are providing for the dollar amount you are being paid, the value-add you bring that is not charged and don’t be afraid to reduce services if the reduction they are looking for is a little too steep for you to absorb.

Jamar M.

Our company typically expires services 12 months from the purchase date.  The language in the contract clearly states that we will do this.
However, if there are large chunks of services left we will typically alert the Account Executive to offer an extension if the extension request meets certain criteria (Services are currently being used, active project is scheduled in the next couple months).

Question to the group:  How do you handle expiring services?  Do you alert customers or just have a hard fast rule on expiring them?

Thanks