I’ve run a few companies over the years, and one inevitably wants out of contact with you. Maybe they’re going out of business, or their business has changed and they no longer need your services. To make this decision, you need to weigh some data:
- What is the value of the contract they want out of compared to your entire customer revenue stream? A small percentage or a large one?
- What are the circumstances of their situation? Are they going out of business (inevitable) or just wanting a new vendor?
- Are you ready to ruin the relationship with the people at that company if you insist they pay?
- Will the outlay to collect the money (lawyers and collection agencies) be worth the value of their contract?
The idea here is to look at the bigger picture. Sure, collecting revenue from a customer on a signed contract seems like your legal right, but what is the bigger picture? If you insist on it, it will create friction and a rift. Are these people you’re dealing with going to go to other places and have a permanent memory of your inability to work with them on this issue? Or will you be a reasonable vendor – someone they’d like to do business with again at their new job?
Transactions create memories. The good ones can be memorable and often result in further business. The bad ones create memories that are hashed over and over, spreading the bad outcome. What kind of memory do you want to create?