Why requiring long term contracts could be bad for your business …

I was just chatting with some SEO/SEM guru buddies of mine about how yearly contracts in the SEO industry make potential clients nervous, but are still the industry standard.

They’d stopped requiring yearly contracts for their services, charging from month to month instead (with a deposit up front) . Their clients seemed more comfortable with that arrangement and they were a lot happier with it too.

That set me thinking about why businesses ever require contracts to service their clients.

Then I stumbled over this little nugget that crystallized it all in my head.

And here’s a great quote from Nelson on why the company eschews the industry’s standard practices (which favor one-time contracts over long-term affiliation).

“Contracts allow you to be irresponsible as a company. You don’t need to worry about keeping people happy and fulfilled. What we have created here — an incredible workspace, opportunities to learn and grow, and, most of all, great co-workers — is better than any contract.”

Basically, contracts open the door to taking your client for granted. As a business owner, you need to be aware of that.

If you’re signing contracts with clients, evaluate why you’re doing it and whether it is serving you or the client better. You should be focusing on helping your clients make money.

If you’re thinking more about how to get money out of them, then you have a problem.