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It bears repeating: the goal of customer success is to ensure that customers get the value they were promised when purchasing, so they will continue to be customers. In a SaaS world, if they don’t get value, they won’t renew. Everything we’ve covered has been in support of that goal. So by the time a year has passed (the typical length of a SaaS contract), it should be just an absolute no-brainer for the customer to renew. After all, you’ve done such a good job helping them capture tons of business value from your solution, in a way that was fully documented. So first things first: to ensure renewals, make sure that folks get to value.
But even if you’ve done all those things right, you still need to capitalize on it by executing a good renewal process. These are some ways to do that.
First, in your order form and master service agreement, you need to have an automatic renewal clause. Customers may seek to negotiate it out, but most will never consider it, and this way, your solution just default renews. When the time to renew comes around, you just run the credit card on file using something like Recurly, Zuora, or Aria Systems. With automatic renewals, it can also be nice to provide a courtesy email note a month or so out. This doesn’t mean that you can skimp on getting customers to success, but it can help in some edge-case scenarios where implementations have taken far longer than they should, stakeholders have left a company (resulting in a new sales cycle simply to get adoption of what has already been paid for), and so on. Further, automatic renewal at existing pricing can be a boon to a customer if you raise your pricing as you add new functionality and the product gets more robust.
If you don’t have automatic renewals, then you’ll have to have whoever is in charge of your renewals process—either you as a founder when you’re small, or a Customer Success Manager or Account Manager when you’re bigger—execute a renewal call. This is very similar to the quarterly business reviews that we discussed earlier in this chapter, where the goal is to summarize success to date as compared to promised goals, and to discuss customer business goals for the period ahead. But in this case, the goal is to summarize the customer’s success across the entire term and to discuss organizational goals for the year ahead—a sort of jumbo QBR.
Renewal calls should be close enough to renewal that you can immediately send a renewal contract to be signed, but far enough out that if there seems to be a snag, there’s enough time to help remediate and get to a renewal. If your final QBR is three months from the end of the contract, then a renewal call six weeks from the end of the term can be a good compromise. Calendar that renewal call as soon as the final QBR is executed.
If you’re doing a good job in your QBRs, by that second-to-last QBR, you should have a sense if the account is going to renew; if it looks like there are issues, start a plan to fix that as soon as possible. However, if for whatever reason you get to your renewal call only to find out that there are showstoppers, there’s always the option of adding some more time to the end of the contract to resolve those issues. This is to say, you can often extend a contract a month or two without requiring payment in order to resolve those issues.
As with QBRs, come to the renewal call prepared with all the success metrics that the account has accrued over the contract term; you’ll want to have all the proof necessary to show that they have gotten value for their investment. All the success metrics that your CS staff has been counting up and logging in the CRM?—bring them to the fore for the call, in what amounts to a grand finale QBR deck.
As with pitching itself, it’s important during the renewals process to actually ask for the business, again. Even if you have an auto-renew clause in your agreement, you want to validate that the customer is indeed bought-into a renewal. In that scenario, that might sound something like, “Fantastic. Well, I’m glad that we got to review all of this and that we’re helping you [busoness goal your solution solves]. Your contract will be renewing on [date], and we’re looking forward to working together in the year ahead.”
Part of the renewal call discussion should be focused on the business goals of the customer organization for the year ahead, and that’s where potential opportunities for upsell can be unearthed. Are they planning on hiring 30 more salespeople, each of whom could potentially be a user of your product? Now is the time to discuss whether it would make sense for them to buy those additional seats now so they can get a volume discount, rather than adding them one at a time over the year.