SaaS renewals revenue is monthly recurring revenue, which is the power of the SaaS business. It drives growth and gives vendors predictable revenue streams which provides better planning from a financial perspective. No other KPI is more accurate to see if you’re gaining momentum. If your renewal rates are increasing, it means customers like and trust your solution. It highlights to prospective customers that existing customers are happy. They see the value of the service and that your solution is delivering on meeting their business outcomes. High renewal rates are a very valuable sales tool. So, at what point in the sales cycle do you contact a customer with the aim of securing the renewal sale?
Securing the Renewal Sale
Anyone who works in renewals is aware of the 120, 90, 60, 30-day contact rule. It’s second nature. However, if you are only contacting your customer to talk about their renewal for the first time at 120 days prior to the contract expiration date, it may already be too late. In fact, engagement should start from the day after the initial deal is closed. Everyone who interacts with the customer, from the integration and implementation teams, tech support, sales and customer success, they all have a part to play in securing the renewal. Knowledge share is vital, including with partners.
Assuming your customer will continue with your solution because they have been quiet since purchase or have not raised any issues is an error. Securing a renewal sale sometimes requires the same effort and engagement as acquiring the new business deal. When the deal was initially closed, the customer received promises about how the product would solve a specific problem or improve their KPIs. Customers are constantly evaluating and consolidating tech stacks and so by the time the renewal is due the impact of that sale will be fully assessable. Has your product fulfilled the initial sales promise? Add to that, it’s likely your competitors will have been in contact with the customer, and they will be aware if your product fulfilled its promise or not.
If not, the renewal may be hard to secure. So, in order to show that you are interested in your customer’s success, because their success is your success, vendors need to proactively manage their customers and their renewals from the outset. Vendors need to identify adoption rate, whether licences are being activated, and usage. Vendors need to fully understand the responses to certain questions.
Questions to Consider in Securing the Renewals Sale
- How does the solution solve your customer’s problem(s)? Has it fulfilled its initial promise?
- Does the solution help them improve upon their key metrics?
- What is their usage? Are they utilising all the features of the product?
- Do they have additional or different challenges and goals to the time of the initial sale? How can your product align with their changing needs?
- What is the cost to the customer of not renewing?
It’s imperative for SaaS businesses must personalize their messaging. Answering these questions should help you to qualify your customers at an early point, help you better understand your customer’s needs and reduce the risk of churn.
Provide the hard data to show how your solution is solving their specific problems. Once you understand their challenges and new goals, you can more effectively position a renewal as an opportunity for expansion: land, adopt, expand, renew.
Of course, you will not prevent all churn, but by engaging with customers, and maintaining that engagement throughout, from their onboarding, and understanding reasons for non-renewal, you will be able to identify trends and potentially prevent churn in others.
Contact our team for more information on our channel program automation platform can drive your channel renewals program.
