Acquisition. ToFu. Net New - All of these terms have one thing in common: they don’t account for the part of the revenue engine after a deal closes.
We've covered how a Deal Desk should play an important role in a renewal strategy, but today we will cover the actual framework RevOps can build for the GTM team to optimize the renewal process.
First, let's do a refresher on why renewals are so critical to revenue:
A slew of studies show repeat business is where it’s at. Here are a few highlights.
DK New Media’s Martech Blog found that, on average, loyal customers are worth up to 10x more than their original deal.
Bain & Co found that a 5% increase (yes, FIVE) in customer retention can increase a company’s profitability by 75%!
And, the kicker:
Eighty-two percent of companies agree retention is cheaper - more cost-effective to execute - than acquisition.
Convinced? Good. Now we can talk about what comes next.
In simple terms, you have to empower your customer success team or account management team (if that’s who’s responsible for renewals in your org) to retain customers.
Through a combination of process, systems, analytics, and enablement, RevOps can be an instrumental part of building that renewal strategy.
Parts of a Renewal Strategy
Being proactive is the name of the game for your renewal strategy.
If you aren’t monitoring your post-sale health metrics, start there. Build a scorecard that will give you indicators of when some things could be headed south - customers who churn.
But outside of metrics, how else do you build and operationalize a renewal strategy for your GTM team? Because you’re in Revenue Operations, this is a task that falls squarely within your wheelhouse.
There are a few critical things you’ll want to take into account when designing processes around your renewal motion:
Similar to how you would map your new business sales cycle, you will need to do the same for the renewal cycle.
Renewal stages can be different.
Renewal stages might differ from new business stages, and the information needed from customers during the renewal cycle might be different from the new business cycle.
These questions include:
- How much of the process will be automated?
- Will operations teams automatically create the renewal deals in the open stage?
- When should customer success (CS) reach out to start the renewal?
If you’ve created a Deal Desk framework, you can utilize it to support your renewal process.
Build a Scalable Deal Desk Process
If you haven't created a Deal Desk Framework yet, you have the opportunity to account for renewals from the very beginning.
One of the benefits of integrating renewals into your Deal Desk Framework is that quote creation can be optimized for renewals, streamlining the process when it comes time to renew.
You can also work with GTM leaders to create a discount approval matrix for renewal deals.
Ensuring a Deal Desk Framework supports renewal strategies creates a repeatable and scalable GTM motion.
Support processes and customer feedback loops go hand in hand.
How often have you as a consumer received a survey after submitting a help request? RevOps focuses on the entire buyer’s journey; it doesn’t stop at a closed-won deal.
And it doesn’t stop after new customer onboarding, either.
Customers still need support, a way to submit requests for that support and escalate if required. They need a way to submit feedback, and then the feedback needs to get to your leaders to take action.
A great way to see this in action is to add a section to your customer journey map for internal processes.
As you are building processes for this stage of the buyer journey, it’s easier to see how a proper support ticket escalation supports the customer stage of the buyer’s journey.
Once you have your processes, you can think about designing the systems to support those processes.
Remember that you don’t need an elaborate tech stack to execute a successful renewal strategy. The processes you solidify with your team will determine if there are tool gaps. If there are gaps, you now have a solid case for implementing something new.
What’s important is that your systems support the flow of information between teams and your systems.
Some important metrics to track include:
- Renewal Deals
- Customer Support Cases
- CSM or Account Manager Activity.
If you are just starting, a project management tool such as Asana, ClickUp, Wrike, or Trello are all good options to begin tracking onboarding, quarterly business reviews, QBRs, and support requests.
Most of these tools host native CRM integrations so that you can tie data back to the customer record.
Alternatively, Salesforce and HubSpot have native ways to manage customer support cases.
Spoiler alert: you can use Salesforce cases with Sales Cloud, so if you aren’t ready to drop $$$ on service cloud licenses, fear not.
You can accomplish what you need, Sales Cloud + Cases.
Once you have your processes and systems set up, you can dive into the data. It’s essential to go through your process design before getting to this stage.
Defining and building processes will help you discover where and how to collect data. Otherwise, you’ll be scrambling for data only to find you aren’t capturing what you need to measure. Oops. CRM tools on the market make it much easier to measure and track the performance of your renewal strategy. You can build a scorecard with metrics to help drive your teams to increase their renewal percentage and, in turn, increase your revenue in the door.
As you build your dashboards, there are a few things to keep in mind. Make sure everyone who is using the dashboards understands the graphs. They know where the data comes from and have the same definitions for all KPIs.
The other consideration is to make sure everyone is using the same dashboards, and these exist in the central source of truth. For the GTM teams, this is usually the CRM. Plan to review the dashboards regularly to see how your organization is doing compared to the goal.
RevOps should ask: "are processes broken, and is the system working?"
For example, with a Deal Desk process, you can see if the renewal cycle is being reduced. If the time to close increases or stays the same, it’s time to take a peek under the hood for adjustments.
What is Deal Desk?
Deal Desk is a place where all relevant stakeholders – sales, finance, product, legal, success, and others – can discuss and work through deals, usually non-standard ones.
Original Source: What Does Deal Desk Success Look Like?
You can read more in-depth about the post-sale metrics scorecard here.
The final piece of the puzzle is ensuring teams have access to the information they need.
Of course, they need to understand how process, system, and analytics work.
But what about renewal playbooks? Sales have playbooks; why not other teams?
RevOps plays a role here as well.
While whoever is responsible for the CS team will define the actual plays, you can be proactive with your data to help leaders shape their strategies.
You can also help make sure the playbook is in a central location and easily accessible; because what good is a playbook your CSM can’t find?
Tools like Guru and Notion can centralize where your company’s CS playbooks live.
Important considerations for a CS playbook.
The CS playbook should be focused on how to handle customer situations:
- Unsuccessful With Adoption: The customer bought the product but has had difficulty realizing its value.
- Bad Fit: The customer cannot receive value due to a misalignment between their needs and the current offerings.
- Too Busy: The customer’s internal workload is heavy and leaves little time for success with your offering.
- Product Issues: Your product or service has issues and is a blocker for solving your customer’s problems.
- Change in Finances: The budget may have changed for your customer, and they have to scale back expenses and resources.
- Ghosting: The customers become unresponsive after onboarding or after signing the contract.
These are just a few of the situations CSMs will face. RevOps can work with CS leaders to develop processes, reports, and documentation to empower CS teams to overcome these challenges.
And you know what it’s all about - the dollars in the door.
So there you have it. If you feel like Revenue Operations has an important job, you are right!
RevOps teams support the entire revenue funnel, from marketing to customer success. That is why operationalizing your company’s renewal strategy is so important. Not only is it mission-critical, but as RevOps plays this role in helping operationalize renewal strategies, you get to be more strategic.
It’s a win-win scenario. Now steer that ship!