Rajaram Jejurkar, Senior Technical Director, Synthesis Systems
Business impact on not having an automated renewal management system
Renewal management is not a new concept. So, why are we talking about it now?
You are right—renewal management has been there for a while, but its adoption is still low, and so are the results. This blog aims to help organizations understand what they are leaving on the table by not having a robust and automated renewal management process/system in place.
Reports state that companies are losing revenues anywhere between 4% to 58%, depending on their size, as they do not have systems to manage the renewals and customer churn.
This customer churn is alarming by any stretch of the imagination. Renewal Management’s goal is to control this churn and revenue leakage precisely.
Let us further see what the downsides are of not having a robust renewal management process/system in place:
#1 Missed customer renewals
This is renewal management 101 and perhaps the most obvious. Organizations are losing a significant portion of their revenues as their customers are not renewing their subscriptions, or the service provider has missed the opportunity to renew it. In many cases, the renewal management team would have forgotten to renew the account.
The automated system ensures that all the renewal related entries are posted in the CRM and reminders are generated before the time comes for renewal. If the customer does not have the auto-renewal on, the system can automatically send out emailers and other communication to remind the customers to renew the license to enjoy uninterrupted services.
#2 No personalization in renewal offers
The subscription economy is blurring the lines between marketing, sales, and service, such that the customer gets a unified and personalized experience when they interact with the organization. Even the CRMs, such as Salesforce, is redesigned to accommodate this change. However, the manual process of renewal management means that the renewal manager has to pull data from three different systems and then respond to the customers.
The automated renewal management solution directly gets the information from the CRM and gives a single and relevant view to the renewal managers. The renewal managers now know the actual offer provided by marketing, the sales contract, and the interactions with the services team. This is valuable insight for the renewal managers to personalize the offer and pricing options.
#3 High-value and low-value accounts are all the same
Every company will have some high-value and low-returns accounts, and the renewal focus is based on that. The manual process pushes the organization to treat both the categories at the same level.
The renewal management system, when fully automated, takes care of the low-returns accounts and frees up the bandwidth for the renewal managers to focus on the high-value accounts. This allows the customers to experience personalized services and also enjoy better deals that motivate them to stay for longer.
#4 Lack of customer insights to push renewals
Customers usually look for specific offers or incentives before they renew the subscription for the next period. However, the renewal management team is continuously under pressure on whether to provide an offer or not, as they do not have the right information on customer’s offer eligibility.
The automated renewal management system proactively pulls the information from CRM and other systems in real time and provides recommendations to the renewal managers on the eligible offers. This certainly improves the customer experience and the organization’s ability to respond more quickly.
#5 Lost opportunity to upsell and improve revenue per customer
If there is the best time to upsell or cross-sell to a customer, it is during the time of renewals. However, in the manual renewal management process, the renewal managers neither have information nor time to upsell.
The automated renewal management system gives your renewal managers enough bandwidth and insights to understand the customer usage patterns and recommend additional solutions and offers on account upgrades. Importantly, it provides the renewal managers an opportunity to improve the revenue per customer.
If you are facing any of these issues, it is time to look at your renewal management process and system seriously. You can take advantage of our renewal management health assessment service that can help you understand the role of automated renewal management in your business and how can you unlock the true potential by improving your customer retention and revenues per customer. Write to us at firstname.lastname@example.org