Renewal Tracking

If your business sales a recurring subscription, then there’s no doubt that renewals are at the top of your mind. This crucial part of the customer lifecycle can be difficult to get right, but in this blog, we’ll help point you in the right direction. 

The Goal

As we’ve mentioned in other posts, if you’ve been doing a great job throughout the year driving value for your customer (through Business Reviews, trainings, usage tracking, etc.), the annual renewal should be a non-issue. But it can take quite a bit of work to get to that stage, and even when you do, the renewal is an event that must be managed and tracked. That being said, the end goal is to achieve very high retention rate through a process that is largely automated.

‍Who Owns It

One of the first things that you’ll have to address is who should own renewals. Depending on the stage of your business, renewals might be handled by account managers, customer success managers, or account executives. Each of these teams will have their advantages and disadvantages, and you’ll have to choose the setup that makes the most sense for you. 

‍Account Managers - Having an entire team dedicated to renewals is a huge asset because, they will be very focused and directed in their efforts, and the company will have one source of truth to go to for renewal metrics. This setup will also allow your CSM’s to focus on the customer relationship and health, without entering into discussions about price. Unfortunately not all companies can afford to have 3 separate teams (new bus, AM, and CS) managing customers.

‍Customer Success Managers - Since CSM’s are already having conversations with customers throughout their lifecycle, it can make a lot of sense to have them handle renewals as well. A focus on renewals, however, often times means less focus on the proactive outreach and client health management that truly provide the most value. If you choose to go this route, you’ll have to construct a comp plan that focuses on the proactive activities that you want, and not just client retention rates. 

‍Account Executives - Many newer/smaller companies will assign the renewal management responsibility to their new business team. This does have the advantage that a customer will be familiar with the rep, as they’ll have worked with them for their entire lifecycle. However, there is the large disadvantage that time will be taken away from closing new business. 

‍Timing

Once you decide who will own renewals, it’s time to start fleshing out the timing and steps in the process. Ideally you want to start having these conversations as early as possible, especially if your product requires extensive contract drafting or negotiation. We tend to start the conversation about 3 months out from contract expiration. This allows for several business reviews to happen before negotiations, and, for us, provides ample time for contract signatures. You may need to adjust this timing to fit better with your typical sales cycle. 

‍Tracking

Part of creating and documenting your renewal process is figuring out where and how you’ll track progress. There are many different pieces of software to do this, and many smaller companies actually track renewals manually. We caution against a manual approach because of the lack of scalability. When figuring out how to handle this, you should think about tracking deal size, contract negotiation roadblocks (as learned from business reviews or initial sale, relevant contacts, purchasing vehicle, and the clients purchasing process. And we recommend thinking about all of these elements with an end goal of automating the process. 

So you’re well on your way to having a clearly documented, reproducible renewal process. Now your reps just have to execute! Check out this post for a deep dive into the renewal conversation.