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