If you’ve checked out any of my previous blogs, you may know that I typically blog about a hot topic of discussion that had come up for myself and/or one of my clients during the previous week. Last week in particular, I ran into three instances where the idea of following up on contract and maintenance renewals came up as immediate needs. In each of the three cases, the client expressed that they wanted to make sure they were staying on top of their renewal strategy in order to maximize their revenue potential. Seeing as though such a significant portion of revenue comes from contract and maintenance renewals for many companies out there, I thought I’d give my two cents on the topic, and share some thoughts about renewal strategies in hopes that others will share theirs as well!
The first common theme I have found in my conversations is the fact that everyone seems to ask the same question of who is going to own the task? Companies aren’t sure if outside sales executives, inside sales reps, operations or another area of the business should follow up with current customers on their renewal contacts. In some cases, no one follows up and the renewal is lost, while a competitor has swooped in to steal the business. The first step to any successful renewal program is to identify who owns the task of following up on renewal contracts.
What goes hand in hand with the idea of identifying who is going to follow up is how you will follow up. I’ve spoken with several different companies about how they follow up with their current customers about renewals, and the answers have ranged across the board. Some send one email through a marketing automation tool and pair it with a mailer, while some have a program where an online maintenance management renewal system sends alerts to their inside sales team to follow up with phone calls and emails. However you decide to implement a strategy surrounding renewal management, it’s important to factor in that a multi-touch strategy might be your best bet. Sometimes a simple email campaign isn’t enough, and adding additional bandwidth to make phone calls may yield better results.
Whether you follow up on renewal and maintenance contracts internally, or if you have an outsourced team to supplement your sales team’s efforts, another crucial component that’s come up across the board is the need to have clean data about current customers on hand. Up to date data will arm your employees who are following up with your customers with information on the current products/services they are using so they can personalize their outbound efforts appropriately. Clean data will also allow you to have very targeted renewal campaigns that will apply to each customer’s specific situation.
I think many organizations are looking to solidify their renewal programs to ensure they are maximizing revenue as much as possible, because unfortunately, renewals are sometimes placed on the back burner while the need for new closed business continues to grow. In my research, I read that recurring revenue is typically two to three times more profitable than other revenue streams and that it’s important to remember that even small losses have major impacts on profitability. You’ve already convinced your customer that your solution is the best fit for their organization and it is much easier to convince them to resign then find new business. What is your strategy for ensuring you are making the most out of your contract and maintenance renewals?
