You may be asking yourself, “Wait, does my company even have a renewal process?”
You aren’t alone. Many SaaS companies don’t have a formal customer renewal process. I was reminded of this at the Silicon Y’all event earlier this month when my session about fighting SaaS customer churn was followed by a fantastic presentation on designing SaaS renewal processes from David Cusimano, a principal at Accel-KKR.
My Silicon Y’all session went straight for the jugular—starting bottom up by getting scrappy to improve customer retention programmatically. David’s session worked from the top down, discussing the steps you take to execute a scalable, effective renewal process.
Both approaches are important. SaaS business fundamentals are built around recurring revenue, and you must have a process around the steps you take to ensure the revenue actually renews.
Whether you have 10 customers or 10,000, it’s probably time to take a look at your renewal process and give it an upgrade. Here are a few ideas to get the ball rolling.
Do document your SaaS renewal process
Sometimes people hear the word “process” and think it’s got to be something complicated. A process is just the steps you take to execute something. So, document the steps you take to renew a customer. The image I quickly sketched out above is just an example of how to start. Think about the customer lifecycle and when they need to be touched, how red flags will get surfaced (and what your red flags actually are), how you will continue to add value, and what you will do about adoption and usage issues. Then just write it down in a timeline from when the customer closes to when renewal happens—who does what, when, why and how. That’s a process. Don’t overcomplicate it.
Do start from the beginning
You notice above I wrote, “just write it down in a timeline from when the customer closes to when renewal happens…“
If you approach your renewal process 90-days out, you are focused on the wrong aspects of renewal. Checking in with a customer 90 days before they are set to renew, and sending an invoice 30 days before renewal isn’t a process. Well, it’s a process, but not a good one. You should be thinking about renewal from the day the customer signs the contract.
Renewal depends on customers adopting your product. It also depends on your customer getting value from it, and achieving their goals. And you need to be ensuring that is what happens for your customer, from day one. Because 90-days out is way, way, way too late to solve for that.
Do hold everyone accountable
A process doesn’t ensure anything actually gets done. A process is just words on paper until it comes to life by the people who are responsible to execute. When you document your renewal process be clear about who owns each step, how the steps should be executed, and how to escalate issues. Build in safety nets so the entire process can’t grind to a halt.
Don’t let your renewal process get stale
If your renewal process isn’t indoctrinated into your culture it’s going to get stale. And when it gets stale, the steps in the process will be perfunctory. Which means your renewal process will be executed without passion, care or attention to detail. The worst thing that can happen is that people go through the motions of renewal without thinking. That’s when mindless customer relationship errors happen that erode credibility and trust.
To keep vigor & interest in your renewal process think carefully about how to create the right culture. Is it being actively discussed and reviewed for improvements? Are your employees incentivized in some way for renewals? Are they chastised when a customer cancels (I hope not)? Is there recognition and celebration when customers renew?
Don’t be afraid to get creative
Your product has to provide value, but your brand has to provide emotion.
A typical SaaS renewal process is just a series of steps, devoid of meaning. Reach out to the customer 90 days in advance to check in. Reach out 30 days in advance. Send renewal 15 days in advance. Schedule stakeholder check-in. Blah, blah, blah.
Avoid complacency. Think about how to inject passion and care into your renewal process. If you are based in New York, maybe you send your customer a cheesecake each time they renew. Or a loaf of sourdough if you are in San Francisco. Maybe you host events in cities where you have clusters of customers who are 90 days out from renewal. Maybe your CEO reaches out to some accounts during the renewal process (not just your top accounts) to make it more personal and show your level of care for your customers. Think about how to humanize your renewal process. And make sure it’s done with love and TLC, not robotic, corporate initiatives. Foster the emotional bonds between your customers, product, employees, and company.
Do measure and improve
Of course, you probably have customer retention benchmarks, goals and KPIs. Make sure review of your renewal process goes a level deeper than that. As you constantly inspect your renewal process and culture, measure what’s having an impact and what’s not, and seek areas for improvement. Renewal can be a living, breathing process that is constantly being upgraded and refined.
Renewal is literally everything
Again I go back to the fundamentals of recurring revenue businesses. Step one: Renew the revenue.
Renewal should
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