With all the information on the internet about how to manage customers you’d think there would be more easily accessible information for CSMs when they want to renew someone. Maybe it’s so simple that no one writes about it? Maybe people write too much about it and as a result it gets lost in the noise?
Whenever I work with any CSM, they always come with a preconceived notion of how they want to renew “their” customers.
It usually goes something like this:
- Email the account and introduce themselves
- Ask the customer their goals
- Three months before the end of their subscription (if it’s a 12 month or longer commitment) send them a note and let them know you want to “discuss” their renewal.
Maybe that works a lot of the time. Maybe thats why people always do it this way. There are better ways to do this.
Understand how to renew an account based upon your subscription model
How you renew an account for an annual subscription is going to be different than how you would for a multi-year contract. How you renew a subscription for an enterprise product is going to be much different than a low dollar value product.
- Ask yourself how sophisticated your product is, and what the guidelines are from a legal perspective based upon where you operate.
- Don’t make any assumptions. Consider pricing, and then consider your outreach strategy in terms of how you will handle the renewal.
- Do you have the ability to auto-renew?
Depending upon the price of your product, an auto-renewal might not be that detrimental. Also, make a decision as a business how you are going to handle an angry customer who comes back after they are auto-renewed/billed. Are you going to go back on the legal renewal? Are you going to give them the money back, or are you going to hold strong?
I write about this just to highlight how many of these scenarios are much more complicated than the transactional nature of the process. On the surface it might not be much, but it can turn to something bigger and its incumbent upon the leader to equip the CSMs with all the training they’ll need to handle these different scenarios.
A lack of training will not only result in more churn, but will require the team to “escalate” each time they receive an objection. That will slow you down as a leader and prevent you from scaling your business and over-achieving on your targets. Or even worse, you can have a leadership team that takes renewals away from you and gives them to “sales.”
Put this into practice
- Ensure CSMs have all the information they need to initiate a renewal
- Properly forecast your book of business
- Determine the outreach strategy for the renewal (customer outreach, generic auto-renewal notification, no notification)
- Map out the possible results and next steps (like you’re playing chess)
- Role play the scenarios with your team and ask them how they would handle each one.
- This is critical because it will also prevent the CSMs from HAVING to come back to you each time the customer writes back.
- You are of course entitled to help your CSMs negotiate, and I encourage you to do that for a more complicated renewal. But it’s important you get your team to think for themselves or you will not scale and you will become the point of failure for the org.
- Know when to quit and what your non-negotiables are
- Price?
- Billing terms?
- Access to the product?
- Don’t drag out the process and work to get it done in a timely and respectable manner.
- Don’t be shady.
As always here is what Chat GPT had to say about this. I write this line before I plug in the prompt but I imagine it is generic…
Managing a renewal for a B2B SaaS product involves a strategic approach focused on customer satisfaction, value delivery, and retention. Here are the key steps to effectively manage a renewal:
- Early Engagement:
- Begin renewal discussions well in advance of the contract expiration date.
- Initiate proactive communication to understand the customer’s needs and expectations.
- Review Customer Success Metrics:
- Evaluate the customer’s usage, adoption, and satisfaction with the product.
- Identify areas of success and any areas that may need improvement.
- Understand Customer Goals:
- Schedule renewal meetings to discuss the customer’s business objectives.
- Align the product’s value proposition with the customer’s evolving needs and goals.
- Highlight Value Delivered:
- Showcase the value the customer has gained from using the product.
- Share success stories, metrics, and case studies to reinforce the product’s impact on their business.
- Address Concerns Proactively:
- Anticipate and address any potential concerns or objections the customer may have.
- Listen actively to their feedback and work together to find solutions.
- Customize the Renewal Offering:
- Tailor the renewal proposal to meet the customer’s specific requirements.
- Consider offering additional features, services, or pricing options based on their needs.
- Negotiate Terms Collaboratively:
- Approach negotiations as a collaborative discussion rather than a confrontation.
- Be flexible and open to finding mutually beneficial solutions.
- Provide Transparency:
- Be transparent about pricing, terms, and any changes to the product or services.
- Clearly communicate the renewal process and timeline to avoid misunderstandings.
- Offer Incentives for Early Renewal:
- Provide incentives, such as discounts or extended contracts, for customers who renew early.
- Encourage commitment and loyalty by rewarding timely renewals.
- Involve Key Stakeholders:
- Engage with key decision-makers and stakeholders throughout the renewal process.
- Ensure that all relevant parties are involved in discussions and decisions.
- Streamline the Renewal Process:
- Make the renewal process as simple and streamlined as possible for the customer.
- Provide clear instructions and support to facilitate a smooth transition.
- Follow-Up and Confirmation:
- Follow up with the customer to confirm their decision and finalize the renewal agreement.
- Provide documentation and ensure that both parties are aligned on the terms and conditions.
- Post-Renewal Support:
- Continue to provide support and assistance to the customer after the renewal.
- Monitor their satisfaction and address any issues or concerns promptly.
- Celebrate Renewals:
- Acknowledge and celebrate successful renewals as a team.
- Recognize the efforts of the Customer Success, Sales, and Support teams in retaining valuable customers.
By implementing these best practices, you can effectively manage renewals for your B2B SaaS product, strengthen customer relationships, and drive long-term retention and growth.
It’s a pretty good list! There is some fluff in there, but this is a great starting point.
Robert Statsky 