5 SaaS Renewal Process Best Practices for Customer Retention
You should adopt a “time invested equals benefits gained” approach with your SaaS renewal best practices. With a focus on lifetime customer success rather than on quick revenue raising, you can turn your renewal process into a celebration of an ongoing partnership.
It’s a customer-centered approach that reflects the broader economy we currently operate under, one where the customer expects individualized treatment. Know your customer, personalize your communications, and proactively work toward a mutual journey of growth, and you’ll find your retention process becomes as reliable as a well-worn marriage.
The Top 5 SaaS Renewal Best Practices
Customer retention is about the promise of continued growth. It begins with a solid, data-driven understanding of your customer’s adoption and usage and culminates in a long-term, mutually beneficial relationship.
That phrase means shifting the emphasis from aggressively targeting new business to building relationships with existing customers that will endure across multiple renewals. It’s like carefully cultivating land that can be harvested seasonally many times over.
We’ve gathered 5 of our favorite SaaS renewal best practices to help you remove the stress from your retention process:
- Define your customer
- Understand your customer’s journey
- Personalize your messaging
- Automate renewals and upsells
- Talk about the future
It all starts with having a clear picture of your customer, their business, and their practical usage rates.
Define Your Customer
What you know about your customers should come directly from the data they generate through adoption, usage, and engagement with your product. By using customer success software, you can accurately track your customer’s adoption and usage rates alongside every other touchpoint in your customer interactions. From helpdesk tickets to survey responses and account management engagement, you can organize and access information on any customer or segment within an actionable amount of time.
You can then share that information across your company so the sales, marketing, support, and account management teams are all benefiting from the same detailed understanding of your customer. In a recurring revenue business, every member of the company can impact the customer in some way.
This kind of visual depiction of your customers helps you identify and prioritize at-risk segments. It also lets you monitor your customer’s journey based on their engagement, not just the final frantic months before renewal. The better you understand your customer, the more relevant you can make your product.
Understand Your Customer’s Journey
Tracking your customer’s journey is critical, as more and more companies are realizing that the majority of revenue comes long after the initial sale. Adopting a customer success approach means following your customer through each stage of their journey in order to deliver continuous business value.
You understand your product better than the customer, and experience has shown you how to anticipate the solutions they’ll need in the future. Use that information to keep promoting new product feature usage as they look toward long cycle growth.
Define your renewal process into sub-stages of customer evaluation so you can better address their pain points. If your data indicates a customer has stalled on product feature use, then proactively engage with them well ahead of the renewal anniversary so you can distinguish your service from your cost.
Personalize Your Messaging
The digital transformation of the business world has created a customer-centered economy that encourages customers to select SaaS providers who offer products tailored to their personal needs. It may seem like an economic monster focused on cyclical subscriptions, but it’s a beast that can be appeased with a matching customer-centered approach.
One of the most effective methods to shift from providing a function to providing an individualized service is to personalize your communications. That means going beyond the traditional cut and paste name tags of a CRM to providing customer engagement based on the usage and adoption of individuals. It’s a practical matter of using your customer data to generate messaging that says, “We’ve noticed you haven’t fully explored X feature within our product; did you know it could help you reduce customer churn?”
Automate Renewals and Upsells
You can use your detailed customer data to prioritize resources when initiating renewal and upselling campaigns. Your data should tell you who meets your specific criteria and can accurately target the right people within an account. You can maintain your focus on creating an engaging presentation while remaining confident it is going to reach the right customer at the right moment.
This video on automated renewals and upsells demonstrates how to approach the issue. It describes how you can build automated campaigns around utilization rates, uptake numbers within an account, and other determining factors, and then target that engagement around key decision-makers:
Using automated renewals can ensure no customer slips through the cracks of your campaign focus. If you get the message right, you’ll provide impact exactly when and where it’s needed.
Talk About the Future
Renewal should be about future growth, not about paying a subscription fee. If you’re continuously engaged with your customer and proactively providing product information, they should consider the renewal process as just another piece of the conversation. It’s an opportunity for you to upsell the customer on the merits of their future needs. From scalability to increased functionality, you can demonstrate how your product will remain integral.
Make sure to include this kind of messaging in your direct SaaS renewal process engagement. Tell the customer about your recent improvements and added features, letting them know that you can grow alongside their business. SaaS renewal best practices all involve looking to the future and fostering value throughout the customer lifecycle.
SaaS Renewal Best Practices
SaaS renewal best practices for customer retention should be a promise for the future. They begin with gaining and maintaining a detailed understanding of the customer, their current place along the journey, and their future potential.
To compete within today’s customer-centered economy, a SaaS enterprise has to continually demonstrate this intimate customer knowledge by personalizing, prioritizing, and timing key customer messaging. With the right data management, your renewal process can become a celebration of another year of partnership.
At Totango, we specialize in defining and monitoring customer engagement. Our products help you access in-depth, timely customer information across hierarchies and segments, helping you provide the personalized service today’s SaaS customers demand. Request a demo or explore Spark and we’ll show you how to employ best practice customer renewal strategies that boost your customer lifetime value.
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