Do most B2B Companies plan to maximize and leverage recurring revenue to scale?
In other words, are they taking subscription-based renewal sales seriously?
This a question I often ask myself. Why? Because I genuinely do not know how B2B leaders across the globe, especially in the C-Suite, think about the long-term implications (good or bad of recurring revenue). Is it being overlooked? Is it a coveted secret for keeping an edge? Maybe. Maybe not.
Here’s the truth…
The battle for your Customer Base is about to get really real.
Did you know?
- Today it’s 3-4x more competitive in B2B SaaS markets than ever before.
- New SaaS products and B2B companies are popping up faster than new customers.
- Tech companies are doubling down on delighting users with strong Customer Experiences
- Inside Sales roles are growing more than any other role in the sales profession today.
After all, B2B SaaS companies generate the majority of all revenue from their existing customer base in the form of subscription renewals, license/feature add-ons, and upsell expansion.
Using census data, Insidesales.com estimates of the 5.7 million non-retail U.S. salespeople in 2017, 43.5% were inside sales.
Observations from the frontline
Is it assumed that everyone in Senior Leadership knows how to handle renewals?
B2B sales leaders are failing to use the power of recurring revenue to win in SaaS.
Existing Customers are an untapped goldmine of predictable scalable revenue for companies with subscription pricing models.
In 2013, the average SaaS company had 2-3 competitors. In 2018, that number exploded to average 9 competitors.
Despite recurring revenue being the lifeblood of achieving any real growth target in SaaS, new sales continue to be the bright shiny object distracting sales, marketers, and leaders away from delighting existing customers.
Spending a decade in tech — mostly leading inside sales teams — I can say with full confidence that more needs done to address the reality that a well-oiled renewal engine can have within your business.
Customer Lifecycle Management alone can be the game changer that propels your brand to enormous success or causes catastrophic failure.
5 Reasons why tech leaders today need Renewal Sales to Slay it in B2B SaaS…
1) Customer Success has become a central role in the revenue farming, retention, and expansion
A growing and notable trend are that CSM’s— historically known for being separate from sales— can own every moment of the customer experience after the initial sale. This includes onboarding and product adoption, as well as contract negotiation and upsell / cross-sell expansion.
In other words, Customer Success teams are increasingly looked to manage the full customer lifecycle, including renewal sales.
2) Existing customers are 50% more likely to buy than new
Everyone knows this right? Account Based Marketing (ABM) is a key trend to watch for.
3) Build a Referral Funnel to supplement top-line revenue growth
When your customer base begins to evangelize your product with their peers, colleagues and network you’re on to something.
More importantly, if they are satisfied or delighted, why not ask for the referral?
Would you rather have 10 red hot referral leads or chase down 50 cold leads?
This is low hanging fruit. Just ask.
4) Customer Retention roles are different than traditional Selling roles. Hire accordingly
This starts at the top. If the leadership at your organization doesn’t know this already you’ll struggle to perform and probably already are. Don’t erode your user-base because you’re too lazy to hire the right talent to keep your happy customers, well, happy.
5) Existing customers are an untapped gold mine of mutual upside and win-win partnerships
Because the subscription-based model is fueled by the customer experience and normally sold as a monthly or annual subscription, your renewal team has more access than ANYONE else to practice empathy and walk in their customer’s shoes. They should be cataloging behaviors and trends. So, establish a client feedback loop, collect the data and use it to build better products, stronger support offerings, and well-tuned personalized journey. Customers should use their renewal account manager to get insights on product roadmaps for planning and to maximize the benefits and value received from the solution.
Written by Aaron Cowell