A 3-step Guide to Making Renewals Happen

/, Customer Success Best Practices/A 3-step Guide to Making Renewals Happen

A 3-step Guide to Making Renewals Happen

By | 2019-05-09T21:43:13-04:00 September 14th, 2017|Customer Success, Customer Success Best Practices|0 Comments

In the subscription world securing customer renewals is our bread and butter. 80% of customer lifetime value comes through renewals. We always hope that renewals will happen as a matter of course, but sometimes they need a little gentle shove to get over the finish line. Assuming our customers will renew because they seem happy isn’t enough. We have some work we need to ensure they will renew while preserving (or even improving) the relationships that contribute to the contract renewal. Even the best Customer Success Managers should follow some basic practices when it comes to the renewal process.

Consider the prerequisites, process (some details you don’t want to miss), and the (very important) follow-through that all contribute to a successful renewal.

Essential Prerequisites to Renewals

Renewal time doesn’t just pop up out of nowhere. It’s part of the customer lifecycle, and we know about it from the moment we sign the contract. Long before we ask our customers to renew, we have been setting the stage for this event. While these things may not be immediate prerequisites, they are the key events that have already gone into readying customers for renewal. We should be regarding each of them as seeds that are planted along the way to ensure success with the customer, and, subsequently, feed the renewal process.

  • Sales Process: Customers began their commitment during the sales courtship. They bought because they embraced the value proposition of your solution, the potential ROI, and agreed upon success metrics. If the contract was signed with confidence, then this is a vital prerequisite to every renewal going forward.
  • Delivery (kickoff and process): This is the heart and soul of Customer Success. Goals are reviewed to align with desired outcomes. Product is set up and customers are coached to use the product to facilitate the attainment of these outcomes. Metrics are tracked and analyzed to determine progress toward these goals.
  • QBRs: Intermittent retrospective meetings are important steps to maintain contact and create momentum in advancing value attainment.

If all of these prerequisites have happened with ease, and no signs of customer regret, frustration, or fatigue are shown, you are likely in a great place for securing a renewal.

The Renewal Process

The renewal process can be broken down into three main steps: Review/Prepare, Meet to Secure Renewal, and Follow-Through.

1. Review/Prepare

Reviewing and preparing isn’t as simple as re-reading notes from your last QBR. It should involve a thorough review (especially if you are new to the account) of the History, Performance, Functional Capabilities, and Communications of the account.

  • History: You want to remind yourself of who bought what when, when they went live, how long that took, what the customers standards for success were, and what issues any of the users have had over the course of their contract.
  • Performance: Know how your product has performed for your customer, as well as how they perceive that your product has delivered real value.
  • Functional Capabilities: You need to know if your customers are making full and appropriate use of your solution. Analyze how the product is currently configured and assess whether or not that’s the best configuration for their needs as you now know them. Assess how fully they are using integrations, reporting, or new features. This is where you review how much of a fit your product is for your customer.
  • Communications: Review and seek to fully understand the communications that have taken place over the course of the last year. What was communicated? Who was involved? How were communications resolved?

2. Meet to Secure the Renewal

The Renewal Meeting is very similar to the QBR, but with the key objective of securing your customer’s agreement to renew their contract. To do this, you may need to “go heavy”, which may involve having an executive presence on the call. “Going heavy” requires some detailed planning. Here are a few reminders:

  • Begin scheduling efforts 90-120 days in advance of the renewal date, and do so using succinct and positive communications.
  • Have an agenda for the meeting that is targeted at securing a commitment to renew. We suggest:
    • Introductions
    • Review of Objectives
    • Establish Value Achieved
    • Review Future Goals
    • Plan for Future Value Attainment
    • Agree on Renewal Process and Timeline

3. Follow Through

Regardless of how smoothly the Renewal Meeting went, you need to be diligent in following through. This is both an external process, and an internal one. You want to do what you said you’d do for your customer (i.e. send a summary e-mail and any documentation that requires customer action), and you also want to use the context from the Renewal Meeting to assess the ongoing renewal likelihood.

While we hope that most renewals happen almost organically because our customers are deriving continuous (and improving) value from our solution, we know that Customer Success teams exist because that isn’t always the case. Having a game plan for securing renewals is a key part of doing Customer Success, and the plan should (literally) begin during the sales process.

About the Author:

Haresh Gangwani
Haresh is the Chief Executive Officer and Co-Founder of Bolstra. Haresh is a veteran B2B SaaS industry executive having served in key roles with emphasis in product strategy, sales and marketing.