What if I told you that ten minutes of your time could yield thousands of dollars in savings?
Sounds crazy, right?
It’s not actually as crazy as it might seem. By spending just a little time evaluating the long-term efficacy of your valet service contract, you may very well find some ways to save.
Sound intimidating? It doesn’t have to be! We’ve broken it down step by step below for you.
The only thing between you and savings is time - and just a little bit of knowledge.
Let’s look at the process of evaluating your contract.
Know what a good one looks like (and a bad one!)
Evaluate contract specifics: service levels, service provisions, rate stipulations, and terms.
Figure out the next steps: renegotiate the contract or get a new provider.
Ready? Let’s dive in together!
Know What a Good Contract Looks Like
Most people don’t really know what a good contract includes. A good contract is one that has terms that are fair to the client as well as the vendor.
Good valet contracts:
Limit price spikes
Have accurate service levels
Are easy to cancel
Have provisions for poor service
If you have a good contract, a lot of your problems will be addressed before they even begin. A good contract can’t prevent issues, but they can give you immediate recourse.
A bad contract is, of course, less than ideal. It won’t protect you from increased charges. The service levels listed in it won’t reflect your actual needs, and the contract itself will be really, really difficult to cancel. And - you won’t have recourse for when your valet porters don’t service entire buildings. (Yes, this has really happened before!)
Evaluate your Contract
Pull out your contract - it’s likely just a few pages long. Take a look at the term length, your service levels, and your termination specifications.
Take a few moments and ask yourself these questions.
Are my service levels aligned with my needs?
Consider if your current service level is really what you need. Do you residents enjoy having their trash picked up three days a week? They might like having it picked up five days a week.
Are price hikes capped or eliminated?
If there isn’t language in your contract that wards off price spikes, you’ll almost definitely get them. A $20 increase here or there may not seem like much, but it’s vital to remember that increases accrue over time. $20 hikes over the term of a contract can result in thousands of dollars in overspending. And it can all be prevented by just a few lines in your contract!
Do my rates reflect the market value?
If your rates are too high, you may be getting overpriced services. You could likely be getting the same services for less - in some cases, much less! When we recommend switching valet services, we calculate your contract buyout fee versus the amount you’ll save with a cheaper service.
But having rates that are too low can be an issue, too! As I write this, we are in the middle of an issue with one of our valet providers. Their rates are below market prices - but their services leave something to be desired. So we’re bid to other providers. Paying bottom dollar isn’t ideal if you’re not receiving quality service.
Call around to a few other providers to get a feel for what they typically charge for their services.
How easy is it to get out of my contract?
Termination processes may differ from vendor to vendor, but many have a clause similar to this:
All that fine print boils down to this: to cancel the contract, the company that employs this vendor must send a written letter of termination via certified mail 90 days prior to the end of the term. It’s not as simple as walking away.
Are there provisions for poor service?
What will happen when a valet porter “forgets” to service entire buildings? Or when they leave a trail of garbage down the halls? You want to make sure that you have recourse if service issues happen. We typically recommend that you ask for an invoice credit if service doesn’t happen as it should. And if there are enough issues, you need to have grounds to terminate the contract.
Know What You Want to Change About Your Current Contract
Make a list of things you want to change about your current contract. Some of these things may include:
Service levels - the number of pick-ups made by the hauler per week
Term - the length of the contract
Fee Caps - language that limits or eliminates ancillary fees.
Auto-renewal - cancelling your auto renewal puts you in the driver’s seat when it comes to whom you entrust your valet services.
Now, prioritize that list. You have to be prepared to not get everything you want - especially if you’re trying to renegotiate in the middle of a term. Having clear top priorities will help you let smaller issues go, if need be.
Make Changes to Your Valet Contract
If you decide to make changes, you can go one of two routes:
Renegotiating Your Contract - Some companies don’t need to get out of their contract completely; they just need different terms or different service levels. Other companies may not financially be able to exit their contract. Either way, for a lot of companies, renegotiating their contract makes financial sense.
Finding a New Hauler/Getting a New Contract - Some companies, on the other hand, find that it makes more financial sense to exit their contract, and pay out for the remainder. If you find yourself in this spot, send out bids to other area haulers and see if someone else can provide better levels of services.
Make Sure Your Valet Contract Protects Your Interests
Go the extra mile with your contract, and you could see big returns. If you evaluate your current contract, determine to fix its gaps, and implement changes, you’re securing a better financial position for your company for years to come.
But you’re also doing more than that. You’re setting yourself up for peace of mind. So often, when things go wrong with a vendor or service provider, it’s because the right preventative measures weren’t put in place. When issues do arise, you have recourse.
Set yourself up for success! Take a look at your contract - and if you have any questions, don’t hesitate to get in touch!
What other questions do you have about valet contracts? Curious about their typical length? Not sure what changes you should make? Let me know what you’re thinking in the comments below!