Winning SaaS Renewals for Company Growth
In an increasingly competitive market, winning and retaining customers to grow your business revenue has become essential to customer renewal and company growth. Around 50-80% of revenue growth for B2B, SaaS companies comes from upselling and cross selling existing customers. Companies differentiate from one another by their ability to leverage the significant amount of customer data they collect towards maximizing upsell and minimizing churn.
Customer Success as a New Approach
Customer Success is a relatively new approach to managing customers and their experiences with your product. Over time, the SaaS market helped shape this role to focus on customer advocacy and success. As the SaaS industry grew and customer management evolved – the need to adopt new practices became prevalent. Companies changed their focus from customer support which is reactionary and transactional, to a customer success point-of-view being proactive and with no specified endpoint.
The history of a customer success manager was originally developed out of the need for a post-sales customer relationship account manager. While a post-sales job is centered around the customer’s well being, there is also the priority of closing renewals, regardless of the current health status.
70% of Businesses Believe that it is Cheaper to Retain a Customer than to Acquire a New One
In the SaaS industry, a renewal is where the customer actively renews their contract with you. And retention is the result in which the customer decides to remain with you. Renewals represent a part of your retention strategy, your customer success metrics and play an important role in your strategy efforts.
For Customer Success Managers, it’s tricky to map out a timeline as to when to start approaching customers to prepare for their upcoming renewal. Risk of renewal starts much earlier, by analyzing and identifying signals before they become problematic and potentially lead to churned customers. So you might ask yourself, what is the proper way to track customer focused data and how should you go about doing so, since customer data can be scattered or worse – hiding. Data exists in many different locations such as within the company’s CRM, CSM, or within customer platform tools such as in Intercom or Walkme. And just as customer data changes, so do SaaS products.
If you Cannot Measure your Data, you Cannot Manage it
Hunting and gathering for data is not time effective or efficient, and much of these efforts have become reactionary. With all the unexposed customer data and variety of customer touch points, how is it possible to combine it all into actionable CTA’s? Many companies are hiring BI experts to build projects from scratch. But while each company is different, these projects are very much alike – the type of customer data they leverage, the tools they use, the process they employ, the KPIs they target and most importantly, the challenges they face, which are repetitive across B2B companies.
You’ll need to implement a customer data tool that is able to leverage data fast and be an order of magnitude in determining accuracy across customer health, churn risks and upsell opportunities. In turn, this data can be turned into health scores and triggered CTA’s, so team members can take ownership for improvements in product and ultimately win by renewing the customer. Delivering to your customers and providing the solutions and tools they need to succeed creates additional data, which allows you to understand what it is that you’re doing that is effective and what is not.
4 Points of Scale for a Successful Framework
There are essentially four points of scale for reference of a successful framework:
1. Define Success and Who Owns It
Who has touch points with the customers and who can influence them and positively impact them?
2. Define Metrics Against Success
How can you measure success on the metrics you really care about?
3. Align Data, Engagement and Create Scorecards
In a data rich environment, it is critical to bring all the data together from all customer touch points. This is a great place to engage with your customers – show them their scorecard and confirm their measured satisfaction.
4. Execute and Measure
- Renewal Rate: The percentage of customers renewed
- Net Expansion Rate: Net dollar retention and revenue at the beginning of the period + upgrades — downgrades — churn, all divided by the revenue at the beginning-of-the period.
- Referenceability rate: The percentage of customers that are advocates.
You’ll need reports which provide the right measurements in order to maximize your customer upsell, cross sell and renewals. Advocacy is extremely important, not just in measuring customer success, but it is also an amazing marketing and sales tool.
Customers have Become the New Sales Channel
In short, it all starts with communicating – by gaining and maintaining a detailed understanding of your customers, how they use your product and if they are happy with it. Word-of-mouth and advocacy is hands down the highest indicator of success for your company, its growth and its future.
To compete in today’s customer-centered economy, enterprises must adopt tools that support their goals. Successful SaaS companies must grow fast, which is why Vayo has created a simple tool with easy and quick implementation – allowing you to reach your goals more efficiently and ultimately securing renewals. We understand that customers are your biggest asset, which is why we provide the insights needed to leverage data, drive conversion and create stronger relationships.