The adage that retaining existing customers is more valuable to your business than acquiring new ones is particularly true in the B2B space. And setting up a process to increase the likelihood that your customers will renew their contract and ideally expand your product within their organization is vital to the growth of your business.
As much as 67 percent of the buying cycle occurs online without human interaction, according to Cisco Systems, with projections forecasting that number to increase to 85 percent. As ecommerce competition grows, automation driven by data within the buying cycle – particularly for renewals – has become a large part of the success equation.
Low-dollar / High-volume and the ‘Long Tail’
Every one of your customers is important to your business, but as a digital company, manually moving a large volume of low-dollar customers through the buying cycle and renewing their business can require significant time, money and manpower.
Every department in your company is a finite resource. This is particularly true for your marketing and sales teams, as well as other client-facing departments. Because of this, you want to make sure you’re focusing your resources toward the most high-value goals.
For example, if your company has 50 clients, 10 of which bring in significantly more revenue than the lower 40, you can auto-renew the smaller-value clients, and enable your sales and customer success teams to give your higher-value clients a more personal touch.
3D Robotics’ Chris Anderson coined the term “long tail,” meaning that often times ecommerce companies will sell thousands of popular items, and possibly hundreds of thousands of more unique or niche items. Over time, the larger volume of unique or niche sales may eclipse the higher-value business.
In short, automating your long tail can significantly impact your revenue over time and help to grow your revenue stream.
Keep Track of Your Customer Renewals
Though you may have a notification process in place when it’s time to renew a customer contract, it’s still difficult to organize all the necessary information to do so. This includes navigating your sales database to identify customer contact points, the customer’s product configuration, prior promotions and discounts, and other important elements of the original deal or previous renewal.
Implementing a data-driven auto-renewal process triggers a campaign that harnesses your sales team with the most up-to-date and accurate customer information, so they can focus on the sales relationship rather than chasing down data. This can be accomplished by using a full slate of APIs and a quick and effective Integration Services process that can organize your disparate systems into a single efficient unit.
“Purchases are no longer the large up-front investments they once were, but are instead made up of lower-cost subscriptions and value-add services,” according to the Technology Services Industry Association (TSIA), an organization that has pioneered the Land-Adopt-Expand-Renew (LAER) model adopted by digital businesses worldwide.
Due to the growth of the subscription-as-a-service model, once you’ve landed new business, your profitability and success is determined largely by your customer adding new seats, usage, services or features, and overall expanding the use of the product throughout their business over time. And of course, you want them to re-up their contract when the time comes.
TSIA outlines the LAER model in which Land refers to the closing of a prospect into a customer, and Adopt includes the resources necessary to help the customer effectively implement the technology, usually a customer success team or a series of education services.
Following the adoption phase, Renew entails the process of re-upping a customer contract by “communicating the value proposition of your technology the customer.” And the final stage is to Expand that technology throughout that organization through upsells, cross-sells and adding additional features and functionality.
This is an effective process to grow your revenue, but can certainly require costly manpower when it’s done manually. This is where an automation system becomes extremely valuable.
We’ve discussed some key strategies in previous posts like consumerizing the B2B buying experience and offering a Configure Price Quote model – both of which are important in moving your prospect more seamlessly through the sales funnel.
Implementing renewal automation complements these key strategies and supports long-term relationships with your customers.
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