Three Keys to Increasing Customer Renewals

This happens to you more often than you’d like to admit. Your sales team lands a new customer with great potential. You work hard at the on-boarding process and hit all of the milestones. Roll-out is on schedule. Over the year(s) of their contract term, you resolve every issue quickly. Then two months before renewal, you get the call: the customer has decided not to renew.

Wait. What?!?!

This probably came as a surprise to you. You probably have a list of reasons these customers give for not renewing. Some of the items on that list are understandable, from product shortcomings to changes in the customer’s business (such as acquisition). Others you know are just excuses, such as pricing, or that one support issue that was only 90% resolved.

Now tell me, honestly: was there something you could have — or should have — known that could save this customer?

There are three things you should be examining closely every day to get a deeper understanding of — and a deeper relationship with — each and every customer:


1. Ask good questions

I discussed the idea of measuring customer success from the customer’s point of view and choosing the right measurements. You have to help your customer use your product, but you also have to help your customer get the value they need from your product.

Your market is crowded. You are competing not only against companies that provide similar products, but with all the other investment priorities of your customer, and your customer is deciding whether whatever work you support is worth funding at all.

One of your first tasks when you assume responsibility for a customer is to understand how your customer will measure their success because of your product. If they are not clear, help them define that measure.

One company with which I’ve worked offers tools to bring social information into the selling process. If you ask generically how they make customers successful, they might say they increase revenue. Well, yes. But so many factors affect revenue and the effect of their product may be small compared with others, so it’s a meaningless measurement. They could also quote their marketing material and say they provide a deeper understanding of each prospect. Again, yes, but can you measure that? And is it a benefit or just a thing the product does?

While the product provides many benefits, one that is particularly interesting is it shortens the sales cycle (decreasing time to revenue). So they ask every new customer how long their average sales cycle is. Then they look at the users of their product and ask them three months, six months, and nine months later how long their sales cycle is. The length drops every time.


The customer is now convincing themselves that the product has a significant benefit. And you know exactly how much and why they should renew (and how to sell the renewal).

How do you get your customer to convince themselves that the benefits your product delivers make it in their best interests to renew? The best way to do this is to involve your customer in the process of picking key performance indicators which measure the benefits most important to them. That way, you’re not telling the customer that they’re getting benefits from your product, they can actually see the numbers themselves. Let the data make the sale for you.

A great way to do this is to schedule a discovery call with new customers. Have your customer’s account manager sit down with them and ask them some good discovery questions to identify what benefits are important to them and what key performance indicators matter to them. For example:

  • When you purchased our product, what are the most important benefits you were hoping to get from it?
  • Out of those benefits, how would you rank them in priority? Which one matters to you most? Which other benefits are high priorities?
  • If you were receiving that benefit, what would that mean for your business in terms of practical results?
  • How can you measure those results?
  • Which KPIs would best serve to measure those results?

Your customer may or may not already be using KPIs to measure their performance. If they are, meet them where they are as a starting point and build from there, suggesting additional KPIs if appropriate. If they’re not already tracking performance, your account manager can discuss common KPIs with them and suggest some which are relevant to their business goals.

Make sure the customer clearly understands what is being measured and how it relates to their business goals. Give them an opportunity to decide which KPIs seem most relevant to them. Get them to agree on which KPIs will be used to define a successful product experience for them. This provides transparency, and it holds both you and them accountable when it comes time to review results and make renewal decisions. If they’ve verbally agreed that certain numbers mean success, reminding them of this when renewal comes up will provide a common ground for renewal discussions.

Your initial discovery call should be followed up with regular performance reviews. Let your customer know how they can view the KPIs you agreed upon in their dashboard. Provide them with periodic performance reports. If you notice performance isn’t hitting target levels, take intervening steps, such as holding a discussion with your customer about adjustments that can be made.

Throughout your relationship with your customers, schedule a performance review with your customer so you can give them an opportunity to evaluate the results they’re getting from your product. If the numbers show that your customer has been getting the results they said they wanted, their decision to renew should be a no-brainer.

Pick your measurements. Ask good questions. Make sure your customer realizes value. Ensure this is a continuous process. And they are less likely to leave.

2. Social engagement

I don’t think I need to convince you that business is social. Your customers are in the social channels, discussing their business challenges and issues, as well as the products and services they like and don’t like.

The best case is when your customer loves your product so much that they recommend it to their friends and colleagues. You can see this from high Net Promoter Scores or by looking at your brand advocates with customer advocacy software services such as Zuberance.

A bad case is when they don’t talk about you at all. Remember the adage, “The opposite of love is not hate, it’s indifference.” If your customers are indifferent, they are not getting value from your product, and they are less likely to renew.

The worst case is when customers publicly complain about you on social media. When this happens, not only have you lost one customer, you’re at risk of losing many potential customers for each customer who complains. It’s like a negative form of marketing that drives leads away from you instead of drawing them to you.

So, listen and engage. Follow your customers on whatever social networks on which they are active. Connect to their professional networks. See what they are up to. Talk with them. Focus on issues and items of interest to them.

You can approach social engagement systematically by deploying customer advocacy platforms. Use customer advocacy apps to:

  • Engage with your advocates across multiple platforms, including major social media networks as well as in-product messages, texting, email, and websites
  • Store and manage advocate content such as reviews, stories, and referrals
  • Publish advocate content to multiple social media networks
  • Split-test results of published advocate content campaigns
  • Offer points and rewards to your brand promoters
  • Integrate data about your advocates with data from other software

These tactics can work powerfully in conjunction with software that tracks Net Promoter Score, such as Totango’s Improve Customer NPS SuccessBLOC Track NPS to identify your top promoters and engage them on social media through your customer advocacy app.

Here’s another strategy. LinkedIn offers advice to recruiters about retaining candidates. They suggest adding new employees to your network, then watching their new connections. If you see them connect to a bunch of people at your competitor all at once, there’s a pretty good chance they’re interviewing.

Do the same. If a new competitor comes up, and suddenly your customer connects to lots of their people, it might be time to strengthen your connection. Flag customers who suddenly start following competitors so that you can segment this part of your customer database. Develop a social engagement campaign designed to reach out to this segment of your customers. Track the results of your campaign.

3. Look at the data

You have data. Lots of it. Don’t be afraid to use it. But don’t get caught up in the “big data” hype. Here’s how to make it useful:

You already track every single action your customer takes in your product. You know every interaction, and you probably know the results of those interactions. All of this may not be well organized, but a close approximation will work pretty well for this purpose. And your data analysts can help you make sense of it all.

What kind of data can you track? Data streams that can provide you with important information include:

  • Financial data, such as transactional data from your marketing and sales platforms
  • Product usage data tells you what features your customers are using, and how often they’re using them, which can signal portending renewal or churn
  • Support tickets, which let you know what your customers are struggling with which might present potential barriers to renewal
  • Touchpoints marking interactions between your team and your customers
  • User data providing insights into the demographic and behavioral profiles of each unique user for each account
  • Customer feedback gathered from sources such as survey responses and satisfaction score tracking

Totango’s DNA-CX platform helps you connect all these data streams using a central management interface you can link to other apps.

You don’t necessarily need to track and analyze every conceivable type of data. The important thing is to identify which numbers matter most to your business goals and to make sure you’re tracking these numbers. In some cases, you can gain important insights by comparing numbers from different data streams. For instance, you might check if your onboarding completion rate has any correlation with your retention levels. If it does, it might mean improving your onboarding experience can have a side effect of increasing your retention and revenue.

The key to analyzing large amounts of data is asking the right questions. You should be asking one or both of these:

  1. What specific actions predict either renewal or non-renewal?
  2. What are the relevant (predictive) differences between customers who renew and customers who don’t?

If you know the answer to one of those questions (they are just two sides of the same coin), you will have a much better idea much earlier whether any given customer is on the path to renewal.

It’s important that you not only look at this data when it’s time to ask for the renewal. You must look every month (ideally) or periodically throughout the contract term. Don’t wait until they’re ready to say no to talk them into saying yes. Get them on the road to yes much earlier.

This can feel like a lot to do with each and every customer, and you might be thinking you can only do all of this with your largest customers.

I warn you: that is a mistake.

The biggest danger for non-renewal — and for large revenue losses — lies in the middle of your customer base, with those customers who matter, but still fall outside your high-attention area (e.g. your enterprise group).

There are lots of technologies available today that allow you to watch large data sets, interpret social streams and collect customer data. Even I, as an independent consultant with no staff at all, engage and monitor social streams for clients, prospects, and new business opportunities. It’s easier — and cheaper — than ever to scale these efforts.

To make it easy for you to predict renewal and churn, you can use technology designed to automatically track relevant key performance indicators and provide real-time updates and periodic reports. One of the simplest ways to see where your customers are at is to track Customer Health Score, a core metric you can monitor through Totango’s platform. Customer Health Score consolidates data from multiple data points into a single aggregate reflecting the strength of your customer’s overall relationship with your brand, which closely correlates with their disposition to renew or not renew. The results are displayed in a single color wheel which shows you at a glance whether your customer’s health is good (green), bad (red) or neutral (yellow). Based on the results, you can take appropriate actions. For instance, you can set up automated routines to reach out to customers who are at risk of not renewing and engage them in ways to boost their satisfaction and disposition to renew.

Now what?

  1. Pick a question or two to ask your customers every month.
  2. Choose a set of customers with whom to engage on social networks.
  3. Ask your data analysts one of the two questions above.

Most importantly, start counting your surprise non-renewals and the number of customers at risk of non-renewal. And (this is how I deliver value to my clients) watch the numbers drop.

Tell us what you choose and how you do in the comments.

Need additional insights? Look to DNA-CX to help improve customer renewal.

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