Approaching Renewals from the Customer Success Angle

September 24, 2019

Megan Macaluso

Category: Customer Experience, Customer Retention, Customer Success as a Service, Customer Success Strategy, Enterprise Learning Solutions, Virtual Customer Success Management

Gone are the days when B2B companies could survive just by sending sales people out to chase down new customers. In today’s subscription-based SaaS world, it’s just as important to focus on keeping your existing customers as it is on acquiring new ones. Retention and renewal have quickly become the new focal points for business growth, and in our view, Customer Success is the best way to fuel an effective renewal strategy.

When a SaaS customer comes up for renewal, one of three things can happen:

  • You lose them to churn.
  • You renew them at their existing level.
  • You renew them and add new products or services.

If you’re serious about keeping the customer base you’ve already built, it isn’t something that will magically happen on its own when renewal time rolls around. It requires a dedicated renewal strategy focused around client needs. Leveraging the connection between Customer Success and renewals will deliver the personalized experience that will make your clients want to keep or expand their contract with you.

Increasing adoption rates and accelerating Time to Value are two key aspects of Customer Success. Essential to these KPIs is a clear understanding of your customers on an individual level. This is what makes your Customer Success Managers (CSMs) such a compelling part of an effective renewal strategy.

A good CSM knows why a client is using your software, what features they are using and how these are being used, what obstacles are limiting further adoption, where the client is in their customer lifecycle, and other specific metrics that might factor into their renewal decision. This is critical knowledge that when analyzed appropriately, will in turn increase the effectiveness of your renewal efforts.

So how do you work CS into your renewal strategy? You can use CSMs to inform a renewal team. You can apply CS tools to aid in renewal. You can even place your trust in your CS team to handle renewals themselves. Just be aware that there isn’t a one-size-fits-all solution. Only you can determine which approach will work best for your company and your customers.

Tapping your CSMs as renewal leads

Many companies find that, for them, renewals are a logical extension of Customer Success. The CSM has an existing relationship with the client. They should have strong knowledge on how well the current product is working for the client, where it’s performing well, where it might be falling short, and the customer needs that are driving those factors.

In this scenario, introducing new products or expanded service levels in order to maximize value to the client, address current issues, or prime the success of future goals should be a natural fit for CSMs. This will, however, necessitate that your CSMs strike a balance between selling and being a trusted advisor for the client. It might also require a CSM to expand their knowledge beyond a smaller set of products and understand the full range of your company’s offering including the features, benefits and weaknesses of each. They will have to stay current on your competitors’ product assortments as well.

Utilizing your CSMs for renewal support

Assigning renewals to the sales department or establishing a separate renewals team are two other viable options companies adopt as their renewal strategy. In both these cases, the established relationship CSMs have with their clients can help provide the types of targeted insight a sales or renewal agent will need to convert renewal and expansion opportunities.

The CSM knows which features a client finds most useful, which aren’t really applicable, which might be underutilized, and which might already be pushed to their limits. They know the client’s successes, challenges, pain points and triggers. They should also have some understanding of the client’s immediate and long-term organizational goals. This means the CSM can pass along tactical information regarding a client’s current usage, specific challenges they are facing and growth plans for the near future.

Establishing a pipeline for ongoing communication with your CSMs will help smooth the transition for your client between CS and the designated renewals team. It can prime the client to be more receptive to adding new features, jumping service levels, and exploring additional products or services. It also retains the CSM’s role of trusted advisor for a client with questions or concerns while going through the renewal process.

Leveraging CS tools for renewals

Customer Success relies on strong, timely communication with clients at all phases of the customer journey. To make this process more efficient and effective, automation plays a key role. These same platforms can be utilized for disseminating renewal reminders, product awareness information, and other recurring renewal messages.

Similarly, data gathered by CS, such as level of adoption, feature usage, license utilization and a customer’s time to value, can be invaluable information in driving renewal success. The same database used to pinpoint areas that may require a CSM’s attention can be utilized to identify useful feature usage trends, areas of focus and specific churn risks for renewal purposes. Available data can also be leveraged to help the clients themselves make a better informed decision about their renewal options. For example, if the data shows they aren’t using one feature they’re paying for, but are maxed out on another and could benefit from additional users in that area, maybe that becomes an upsell play during the renewal.

Planting renewal seed early

Wherever the actual responsibility for renewals falls within your company, Customer Success can and should be a catalyst to help drive renewal success. CSMs have the ear (and hopefully the trust) of your clients. They can predispose a client toward renewal by constantly spotlighting the value being realized from your solution. They are also likely familiar with areas of the client’s operations beyond current product applications and can prime the pumps for an addition of features, products or services during the renewal, regardless of who’s processing that paperwork.