Why He Lets Enterprise Customers Cancel Any Month

What Everyone Says

Land a big customer, and every piece of advice points the same way: get it on paper. Annual at least. Multi-year if you can. Ask for it upfront and give a discount to get it.

It sounds like the safe move. A signed contract is revenue you can count on, and when you're small, a big logo locked in for three years feels like it buys you time.

Why That's Wrong

A long contract protects you from your customer leaving. But when a big company buys from a small vendor, the worry on their side of the table is you. Will you still be around in two years? Will you build what they need once the deal is signed?

Pushing for a multi-year deal asks the buyer to carry more of that risk. It also hides a problem you need to see: a customer who'd leave the moment the contract let them.

What Rajiv Did Instead

Rajiv Khaneja built AdButler into a $10M ad tech SaaS that serves a Fortune 100 retailer, Home Depot and HEB. When he walked into that retailer's first meeting, his whole company was smaller than the room: "I think we had twelve people total."

AdButler doesn't push long contracts on enterprise customers. Rajiv: "We're happy to do month to month."

Longer terms only happen one way. "The only cases where we have longer term contracts is where our clients came to us and said, We want a longer term contract because we're not comfortable with month to month. We want to make sure that you're serving us for three years or five years."

So when a long contract does happen, the customer is the one asking, and they want it to protect themselves. It guarantees they keep getting served. And because it's their idea, there's nothing to fight about at the closing table.

His test for whether a contract is doing real work: if a customer wants out but the paperwork says two more years, "then we've already lost."

That retailer has been a customer for "almost 10 years," and Rajiv says they have "very little churn" in enterprise.

The Principle Underneath

Let the contract protect the buyer, not you.

A small vendor's biggest weakness in a big deal is that the buyer is taking a bet on it. Month to month shrinks the bet. If the customer wants a longer commitment, it's because they want one from you. That's a much stronger place to negotiate from than begging for a signature.

It also changes how you run the company. With no lock-in, an unhappy customer shows up as churn next month, not in two years. Rajiv's goal is "the product to be so good that they would just never think of leaving." Month to month means you find out every month whether you're hitting it.

Should You Do This?

Do this if you're selling to customers bigger than you, and you're confident they'll stay because the product works. It's the strongest answer to a buyer who's worried a small company might disappear on them.

Skip it if you need the contract to raise money or cover a big upfront cost, like custom work you won't get paid for unless they stay.

One question to ask: if this customer could leave next month, would they? If the answer scares you, a longer contract won't fix that.