Cloud PBX Checklist for Large Companies: Contracts

This next installment of the ultimate cloud PBX shopping checklist for large companies, addresses possible snags with your existing contracts.

In the video below, Mike explains why it’s important to check your current vendors’ contract status before spending a lot of time shopping for a new cloud PBX solution for your company. He gives you several insider tips that may help save your company a ton of time and money.

Want Mike’s recommendations on the best cloud PBX vendors to quote, for your large organization’s specific requirements? Click below to ask him today.

About Mike

Mike Smith is the Founder and President of AeroCom and has been helping companies with telecom and cloud services since 1999. He has been the recipient of numerous business telecommunications industry awards, including being recognized as one of the top 40 business people in Orange County, CA., under 40 years old. You can also hear him as the host of the popular Information Technology podcast, ITsmiths with Mike Smith. Follow Mike on YouTube, LinkedIn, Reddit and SpiceWorks.

Transcript

You work for a large company and your company is shopping for a new phone system. You’re looking into cloud phone systems, of course, because that’s where everybody’s going these days in 2022. And you want to know, hey, what are some of the questions that I should be asking? What are some of the things I should be making sure I put on my checklist for our cloud phone system?

Well, great question. I wanted to make a video series, and in this video series, I’m really going through my discovery questions that I ask all of our customers to reach out to me who are looking for the best vendors for their new phone system that they’re shopping for. Now, I kind of go through this list of discovery questions, and that really helps me determine which vendors would be the best fit.

So today, I’m talking to you about contracts. What are the questions that you should be asking yourself about your current contracts? Because this is a big one. A lot of times, companies will contact me and they’re ready to get a new phone system, and they don’t realize they’re stuck in a contract and they can’t shop for a new phone system right now. So I wanted to make a quick video and give you some tips.

Shortcut

But before I get too deep into it, just a quick plug. If you want to know the best vendors that your large company should be quoting for a new phone system, don’t just Google it. Reach out and contact me, via email or by phone (714.593.0011). More information on that at the end of the video. And hey, if you like the video, don’t forget to like and subscribe to the channel. That really would help me out a lot.

What’s the problem with contracts?

All right. So contracts. If your large company is shopping for a new phone system, before you reach out and start talking to vendors, you really want to address the contract situation.

You don’t know how many times I’ve had companies call me and I’ll ask them, are you in a current contract with your current vendors?

And they’ll say, “Oh no, it’s been a long time since we originally got this phone system. It’s been here a long time. And our dial tone providers, we’ve had them for a really long time. So we’re definitely not in the contract. All that stuff is expired.”

And then three quotes later and so many hours of looking at new phone systems later, they find out, oh no, they are in a contract with their dial tone provider or their maintenance contract provider, things like that.

Which contracts are an issue?

So the different contracts that you want to look at are, number one, your maintenance contract with your current phone system vendor, if you have an on-prem phone system, so your maintenance contract, also, your licensing contract for your current on-prem phone system, if that’s what you have. Or if you have a cloud phone system, you want to look at your contract with that cloud phone system. You also want to look at, if you have an on-prem phone system, your dial tone contracts. That would be for a PRI line, or a SIP trunk subscription that you have for your SIP trunks, or your local long distance calling, if you have a really old contract, things like that, you want to look at, okay?

Auto Renewal Clauses

And just because you’ve had that vendor for a long time, doesn’t mean you’re not in contract. And I’ll tell you why. There’s a nasty clause at the end of some of these providers’ contracts, in their terms and conditions. Deep in their terms and conditions, it’s called an auto-renewal clause, and it’s really nasty. And what it does is every time your contract expires. It auto-renews. Some of them auto-renew year by year, auto-renews you for another year, but some actually auto-renew for your initial term. So if you signed up with your PRI provider on a three-year term 10 years ago and it auto-renews for your initial term every single time, it auto-renews for three years and three-year chunks. So even though you’ve had them for 10 years, you might have two more years left on your contract. So you really want to make sure you look into all that stuff ahead of time, before you start shopping for phone systems.

“We’re gonna get out of the contract!”

And really quick, just in case you’re thinking, “Well, our phone system is so terrible,” or “Our dial tone provider is so terrible,” or “Our hosted cloud PBX provider is so terrible. We’re just going to cancel with them.” I’ve heard that a lot of times too, and I can tell you, in 18 years of doing this, in over 20 years selling within this industry, I’ve never seen a single company actually follow through on that.

And the reason why is they don’t realize how bad some of these contracts are in terms of, they think it’s just a small amount to buy out, but it’s actually your monthly recurring costs multiplied times the number of months remaining in your contract. So if you have two years remaining in your contract and you’ve committed a couple thousand dollars, two, three, four, $5,000 a month to this service provider, that remaining contract buyout is going to be so big that there’s no way it’s going to get approved.

And then companies will say, “Oh, we’re just going to get out of it, and we’re going to have our lawyer chase them.” Well, that never works in either, because I can tell you, the lawyers for the telecom companies, they’re on payroll for them and they do not let you out of that contract. And sooner or later, it just gets ugly, and you’re not going to want to do it.

What about a buy-out?

The best thing I’ve seen is some service providers do have some buyout stuff where they’ll… But it’s not really a buyout. They’ll say like, “We’ll let you have free service with our company for six months, but we’re also going to sign you up for a five-year contract.” So if you want to get a new phone system, they’ll have that as kind of a way to lure you in, as they’ll give you maybe the first six months free, but they’re not going to buy you out of two years worth of service. I’ve never seen that long a period of time.

So in terms of having another provider buy you out or breaking your contract or things like that, if it’s a really expensive contract, don’t count on that. That’s wishful thinking, and it probably will never happen. If I’ve never seen it in that many years, the chances of your company being able to do it are really slim. So just wanted to give you some realistic advice there.

Want my recommendations?

Okay. So I hope this video was helpful. If so, don’t forget to hit the like and subscribe button and also look at my other videos on the same topic for the cloud PBX checklist. And again, if you want to know the best vendors your company should be quoting for a large phone system, don’t Google it or don’t try to ask around. Just reach out and contact me via email or by phone (714.593.0011). This is what I do for a living. I talk to all these providers on a daily basis, and I’ll give you some great recommendations based on your company’s specific requirements.

I’ll also introduce you to the right people within those companies and oversee the quoting process to make sure you get the lowest quotes possible from those companies. And the nice thing is, is that the service providers pay me my broker fees. So you don’t have to pay me a dime. So there’s no excuse not to at least reach out and see what I have to say. All right. Again, don’t forget to hit the like and subscribe button down below, and I’ll catch you on the next one.