Renewals for SaaS products, cloud infrastructure, technical support, or maintenance contracts are increasingly important, yet most organizations are still primarily reactive in the way they pursue them. Ongoing services represent significant percentages of total revenue for many companies. IBM and HP, for instance, used to be primarily hardware companies with physical products that customers purchased outright or leased. Today, much of these companies’ revenue is based on a service revenue model. In fact, much of the so-called “gig economy” today is based on an “as-a-service” model.
Consider renewals, not as a process, but as a journey – one that you and your customer collectively embark upon. There are five key areas that you need to focus on as part of your renewal journey. Let’s take a deeper look at all the factors involved in implementing an effective renewal cycle.
1. Identify Key Data Points
The first step to kick-start your renewal journey involves identifying key data points. You need to ask yourself two basic questions:

1. What are those data points?

Make sure you don’t lose sight of key metrics, especially the ones centered around measuring value. Typically, these include product usage and utilization metrics, renewal dates, sentiment analysis, etc. If you have an array of multiple products, you also need to think about what additional value you can offer, along with the basic renewal package on the table. Couple this data with a detailed white space analysis to determine potential gaps that you can take advantage of.

2. How do you identify them?

Data exists in disparate sources, like CRM, spreadsheets, ticketing software, etc. Pulling this largely scattered data into a consolidated platform is essential to derive a realistic measure of customer health. For any given customer, you might have multi-year opportunities and these would have implications on how you design your renewal process. If you have multiple products, that usually manifests as multiple opportunities – each on a different time scale. Lastly, you need to be cognizant of special semantics around renewal best practices – these differ not only across varied businesses but also across different CS models.

 

2. Assign Roles & Responsibilities

A renewal process involves both internal, as well as external stakeholders. More often than not, you might have an assigned CSM and or an AM who is working with customers. You may also have internal executive sponsors, involving engineering, and professional services or C-level decision-makers. You need to assign different roles to these stakeholders and structure your outreach to optimize impact.

3. Devise Engagement Touch Points

The third best practice involves designing the engagement process. Engagement not only differs across the length of the customer life cycle but might also vary based on customer tiers, unique business models and other segments within your customer base. There are a plethora of ways to start the renewal conversation. As a CSM, you would probably be already talking to your customer over the phone, email, text, and/or QBRs. However, when designing your engagement strategy, look out for:

    • Auto-renewal terms
    • Non-contractual commitments
    • Stakeholder changes at customer-level
    • Multiple/multi-year opportunities

4. Streamline Key Initiatives

When dealing with renewals, you need to be very methodological with your approach. The framework above would help you structure your process, and add timelines for various deliverables. 

Start off by measuring the pulse of your customer – send out surveys and use product utilization metrics to determine where your customer stands. As a best practice, send out surveys and renewal reports 120 and 100 days before the actual renewal respectively. 

The next step in the process involves an in-depth analysis of the findings – this report would give you key insights into mapping out customer value points, key milestones, and ultimately help you identify areas of improvement. The last and most important initiative is communicating the need and timing of the renewal – make sure you equip your customer with compelling data points for a fool-proof renewal!

5. Measure Success

The fifth and last step ties together the rest of the four pretty well – after all, the main aim of Customer Success is to measure the success of the customer. Tracking success is not always easy and remains a largely intangible process unless you let data drive your decision-making. Here are some of the KPIs that we’ve seen customers track using Strikedeck:

    • Additional products added
    • Increase in revenue amount 
    • Increase in the contract term
    • Discounts provided
    • Renewals lost

To ensure success, customer health and satisfaction is very important. What’s equally important in the overall mix is employee success! Make sure to incentivize and compensate your team members sufficiently throughout the renewal journey.

An essential component of measuring success involves reporting on your findings. As the one responsible for renewals, take into account the following:

  • How should the CSM track the program?
    • Who’s up for renewal?
    • What needs to be done?
    • What is the renewal rate?
  • How should managers track the program?
    • What’s up for renewal and when?
    • What steps have been taken?
    • How does this break down by CSM?
  • How do you showcase the result to your executives?
    • What has been renewed?
    • What’s up for renewal?
    • What is my renewal risk?

 Through well-developed customer success practices, coupled with cutting-edge automation, impediments to renewals can be minimized. Oftentimes, the loss of a champion, the lack of management, or structure tends to get renewals off track. Such things can be determined and addressed along the way to prevent a foregone conclusion of “We no longer need this service.” A structured and programmatic approach to renewals will help you avoid awkward conversations, potential churn, and ultimately increased account expansion and retention.

To see how Strikedeck helps in conducting renewals, click below.

Zahra Iqbal

Marketing Manager, Strikedeck