Selling a product to a customer is one thing. Having the same customer want your product again is another.
For tech companies and practically all businesses that sell licensed systems or platforms, success is gauged beyond the closure of the initial sale. Getting your customer to say yes to renewal is as important or even more so from a long-term perspective because non-renewal usually means customer dissatisfaction. A non-renewal signifies that somewhere along the way, a need or two wasn’t met and the customer lost interest to go further altogether.
Renewal is crucial for the growth of any business. A high rate of non-renewal puts your business at risk and hampers your growth.
When Should You Start Working On A Renewal?
The whole sales process is a collaborative effort involving sales as well as post-sales teams. When working towards getting a renewal, time is of the essence. A little delay, gap, or outright negligence could lead to the loss of a customer.
Customer success experts agree that the renewal process should start as early as the kickoff or within the so-called honeymoon period.
Why? Because it’s the perfect time to do the following:
A smooth internal handoff (within your relevant departments) and customer handoff (kickoff and onboarding) is that period where both the seller and customer are looking forward to a successful collaboration. It is a good opportunity to build trust and ensure a smooth transition that proves valuable for the customer.
Be there to confirm the value of your product at each step of the rollout. Do not ask questions or wait to be asked. Being proactive nurtures your new relationship with your customer. This gives you a higher chance of building and strengthening a long-term partnership via renewal. You don’t force it to happen; you cultivate it so that it deepens its roots and bears fruits.
While making a call regarding the renewal process, make sure that all the relevant stakeholders are present. This helps expedite the decision-making process by addressing any issues or clarifications upfront.
An executive business review enables all parties to assess relevant aspects of the product/platform. Are expectations being met within the projected period? Are there hiccups along the way that need to be smoothed out? This is your chance to put the spotlight on your product and why it should be renewed.
Survey Post-launch: Churn Indicator
This is a must if you want to know whether your customer will renew or churn. Their feedback will give you an idea of what they think about your product. By not doing this, you risk staying in the dark, unable to assess your actual status in time to take necessary actions to turn a possible churn around.
Connect on LinkedIn
This is a good time to expand your network within your client company and see more ways on how to multi-thread, upsell, or cross-sell products to them based on their needs. Linking up with other departments in your customer’s company opens up opportunities to be of help. This will help boost your partnership with their company as a whole.
The Journey to Renewals
Customer engagement typically drops after a handoff. The absence of proactive steps to keep the engagement alive increases the chances of a churn. During the kickoff, make sure to explain what they need to do and what your deliverables are for your partnership to be a success. You can achieve first value by ensuring you integrate your product or service to your customer’s goals.
Should an issue or problem arise along the way, consider it as an opportunity to provide a positive experience. Your inability to respond well puts you at the risk of losing your relationship. At this point, engagement is increased, and you have to make the most of it.
It is important to identify opportunities for more impact because a positive experience triggers a yes to a renewal.
Understanding the Neuroscience of Onboarding
As mentioned earlier, this honeymoon period is a crucial time to start your renewal process. In this phase, both the seller and buyer are vulnerable and are affected by first impressions. Take care of the momentum. Do not let either a lull or a letdown keep you from moving forward to renewal. It is a make-or-break phase and any inaction or wrong action decreases your chances of inking a renewal.
First impression matters and it involves the following:
A positive or negative first impression could lead to biased anticipation of the same. So ensure you make a positive first impression and keep it so.
According to research, 70% of buyers churn during the onboarding period due to poor onboarding or customer service. Treat your onboarding period as the foundation and springboard for a confirmed renewal.
Prospection – Create a positive story in your customer’s mind by being attentive and helpful. Recalibrate your approach when you sense any degree of dissatisfaction.
Building Trust is Critical
Getting your customer to continue the partnership involves building trust. Here are some tips to successfully win their trust:
Guide your client and explain what they can expect as they transition from a buyer journey to a customer journey.
Ensure a smooth handoff internally from your sales team to the post-sales team for a continuing relationship with your customer.
Use visual images to enable efficient, practical, and clear communication with your customer since the mind can process images 60,000 times faster than words.
Check-in with them regularly and make genuine connections through casual communications so they can feel your guiding presence each step of the way.
What to Include in Your Renewal Playbook
Give a clear picture of the value of your product in terms of return on investment. Most customers churn because they feel that your product might not be worth their investment, after all. Correct that notion by establishing the value and financial viability of your product.
Ask More, Speak Less
The playbook is not about you but your customer. Drop the jargon. Listen well and include questions like “What goals are you aiming for in the next 3 months?” or “How does this product fit in with those goals?”
Research on LinkedIn and keep up with news and updates about your customer like recent acquisitions, reorganizations, downsizing, etc. Come prepared and ask questions to find opportunities for multi-threading or penetrate the company by upselling or cross-selling other licensed products in your portfolio.
Do not start and finish with a call. Do not ever send a renewal contract after not being in touch with them for months. Engage them. Get them to commit in writing to a project that you can work through during the renewal time.
Key Contacts for Enablement
Involve them on your call so you can move forward. Do not host a renewal discussion without the champion and business decision-maker in the room.
Plan and Proceed
Keep these tips in mind to ensure renewals from your customers. Plan, practice within your team and proceed. Renewal is like the spring that enables you to flourish. Keep your customers satisfied because it is the key to your company’s growth.