Are you focused on Renewals? You’re too late.
TL;DR — in the set-it-and-forget-it contract world of SaaS software, customers who are left on their own for most of their contract do NOT want to hear from you when it is time to renew. Start earlier.
🎶 This is how we do it 🎶
Most contract-based companies have a renewals cycle. During a specified period, such as 60 days prior to a year-long contract end, the Renewals team basically takes over the relationship, working with the account team to get the customer on their next contract, possibly with some “uplift” involved.
Those Renewal managers (RMs) typically will field customer questions (and objections) and answer or resolve them, but they also are often mandated by their organizations to build that uplift into the new contract, meaning this new contract costs the customer 5% more than the previous one simply because it’s one year later.
Renewals’ rhetoric will rely on and espouse the fact that SaaS companies do quarterly-ish releases of new features, citing those constant improvements as justification for the uplift. They’ll talk about the cost of doing business increasing year-over-year. And they’ll suggest that customers have alternatives if they want to switch, but that they’ll need significant time to do so.
All true.
Frankly, I don’t think Renewals teams get nearly enough credit for bearing the brunt of customer reaction and keeping them as customers.
Perhaps you can see where I’m going here:
- A customer who has only basic requirements for your platform may not recognize 5% of value in your consistent improvements,
- There’s only 60 days in the Renewal cycle, meaning the RM would reach out 60 days prior to renewal, which may not be long enough to solve a significant problem that only just came to light based on the RM outreach, and
- Blame should extend to both sides for saving any real problems encountered during the year for which they attempt resolution during the renewal cycle. Said another way, if customers cannot or will not solve their own problems, then they should raise their hand for help, and the company should help them!
This is why I never wanted to be in Renewals. Its a Sisyphean task. But there’s more to this debate.
You have to determine how you’re going to help your customers. It sounds simple, but there are tradeoffs on both ends of the spectrum for which you need to “take your lumps”.
Active vs. Passive
Perhaps you have the best CSMs in the universe. Perhaps you have the best customers in the galaxy. But you probably have neither.
Is your model about personally engaging with every customer periodically? You can tell immediately which customers take your meetings begrudgingly and which are there to learn. Don’t schedule a follow up with the former.
Larger groups of customers (portfolios) are typically left to their own devices: the passive setup. Customers get help when they ask for it, not proactively.
Let’s Talk About Tools:
Automated Communication: Automation is often expected today. The key is crafting automated emails that feel personalized and relevant, conveying connection even if automated.
Segmentation: Tailor the approach by segmenting customers based on needs or value.
Leveraging Technology: Utilize CRM and AI to manage large volumes of accounts.
Empowering Sales Reps: Equip reps with tools to focus on value-added activities.
Community Building: Focus on online communities to ease the burden on individual reps.
Scale becomes manageable with a multifaceted approach combining technology, segmentation, empowerment, and community engagement. -Me
It’s about balancing personal touch and efficiency, ensuring customers feel understood and valued, even in large-scale operations. Of course this is neither exhaustive nor the most relevant for all companies and the approach depends on the on ground reality.
But it’s definitely a start.
Some SaaS models are like a gym membership, and some are like a personal trainer.
The gym membership gives you all the tools, and its up to you to achieve your fitness goals.
The personal trainer takes you to the gym and makes sure you use the equipment to achieve the results you want.
…and let’s not forget sometimes an enterprise just wants access to the gym and the smb wants the personal trainer.
In SMB, the gym membership model is great, but if you want to excel in the enterprise, you have to deliver and measure results!
