Elite clients tend to remain Elite clients for a long time, and we’re proud of that. But we only want clients to stay with us because they want to, not because they have to – and certainly not because a tricky clause in a contract forced them to stay longer than they would have chosen.
That’s what happens when a leasing company sticks an “evergreen clause” in a contract.
Such a clause says that the client must notify the leasing company of termination within a certain window – and if the client fails to do so, the agreement automatically renews for a specific period of time. Often that’s an entire year.
And the renewal window can be far in advance of the lease agreement’s end – sometimes as much as five months. That puts a lot of pressure on a client to monitor the fine points of a contract, and it’s not the basis for a positive business relationship.
That’s why Elite Imaging Systems does not, and never will, include evergreen clauses in its contracts.
Vice President of Sales Mike Tomlinson explains why.
“We don’t have any of that verbiage in our lease agreements, and the reason is that I think it’s usury,” Tomlinson said. “I think it’s holding the client hostage. If they don’t give the notification in time, they get a response back that says, ‘Sorry, you’re outside the window.’ And they client’s kind of screwed.”
That’s not right.
Elite’s philosophy is simply that any client that wants to make a change should be free to do so. Of course, both sides need to honor the terms of any agreement, but Elite is not interested in tricking clients into rolling over their agreements into additional years if they don’t choose to do so.
“What we have is just a month-to-month agreement,” Tomlinson explained. “Just let us know a month in advance so we can close out the agreement.”
But the ironic thing is this: As easy as it is to close out a leasing agreement with Elite Imaging Systems, very few companies actually do it. Maybe that’s because we know we have to earn their continued business every day, which is exactly how we think it should work.