Seriously, why aren’t more tech leaders talking about SaaS based renewal strategy? Is it simply being overlooked? Or, is it a coveted secret for keeping an edge in today’s digital economy? Do my fellow recurring revenue aficionados see this trend too?
Before I share 5 simple reasons why the SaaS community should increase awareness and debate around managing the customer lifecycle, I’ll cover why it matters and the observations that led me to write this article.
Seriously, why aren’t more tech leaders talking about SaaS based renewal strategy today?
Why it matters
The lack of content on this topic is disappointing — baffling even. How tech companies structure and posture the dynamic of B2B contract renewals between/within Sales and Customer Success is a topic deserving much debate.
After all, B2B SaaS companies generate the majority of all revenue from their existing customer base.
1) So what are the thought leaders, experts and content authors that have this knowledge writing about instead?
2) Is it possible the conversation is indeed happening, but hiding behind the rising popularity of conversations tackling Customer Success and Business Development, and the state of AI?
A growing and notable trend here is that CSM’s, historically known for owning customer experience, on-boarding and product adoption, are now becoming a central role in farming, retention and revenue growth.
In other words, Customer Success teams are increasingly looked to to manage the full lifecycle, including renewal sales. Very interesting to see how it unfolds and if CS absorbs this function entirely, partially, or sheds the trend completely.
Not only are Inside Sales roles and SaaS companies more abundant than ever, but the sheer volume of content B2B tech companies produce is staggering (and still growing). And despite recurring revenue being the lifeblood of crushing any bottom line growth target, it continues to be top line sales strategies that attract today’s content writers and readers the most. (e.g. search and see for yourself…anything on SDR’s, BDR’s, Outbound sales tactics, etc.)
With the abundance of articles and content addressing the modern day sales funnel, lead generation and prospecting, maybe it’s assumed that everyone knows how to handle renewals. 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 a profound impact on the health of all orgs within your business.
…maybe it’s assumed that everyone in Sales Leadership knows how to handle renewals.
Let’s hope not. Without further ado…check out 5 Reasons why tech leaders today should really be talking more about renewal strategy for B2B SaaS companies.
#1: Cost of keeping a customer is less than acquiring new ones.
It’s 2018, everyone knows this right? Shore up resources and segment your customer base for full coverage. Existing clients are also more likely to close upsells by purchasing new products or increasing spend for new features and added benefits.
#2. Referrals can feed top funnel and top line revenue with leads that close faster and stay longer.
A strong renewal process isn’t only about the renewal. It’s about the client’s entire experience leading up to the event of license expiration. When the customer explicitly knows the value of your product and partnership, they tend to want the same for their peers, colleagues and network. Would you rather have 5 warm referral leads or rather chase down 50 cold leads? Low hanging fruit right here if you’re not asking for referrals.
#3. Inside Sales roles are growing more than any other role in the sales profession today
Not SDR’s, not BDR’s, but Inside Sales. Professionals in Inside Sales now make up almost half of all sales positions. Using census data, Insidesales.com estimates of the 5.7 million non-retail U.S. salespeople in 2017, 43.5% were inside sales pros.
#4. B2B renewal sales require a hyper-focused approach, process and talent pool different from your outside sales team.
This starts at the top. If 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. Renewal teams are often an untapped gold mine for BOTH the company they work for and the customers they serve.
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 customers 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.
Customer Lifecycle Management, aka the client renewal process, should be at the heart of every B2B SaaS company today. It’s too competitive to not care, and it’s to easy for customers to switch to your competitors platform thanks to the cloud. What do you think?
If the SaaS world gave churn and customer retention the same coverage as content discussing SDR’s and BDR’s, what would change? Would we be better or worse off? Would anything change?