Companies that have built a sufficient customer base — in particular, those operating in the black — have clearly succeeded in customer acquisition. But retaining those customers is also important for a company's long-term success.
Research by Frederick Reichheld of Bain & Company, as reported in the Harvard Business Review, indicates that a new customer acquisition is between five and 25 times more expensive than keeping an existing customer. So how do customer success managers get contract renewals, maintaining and sometimes increasing the level of business they do with key accounts? Built In San Francisco asked leaders at three area companies how they do it — even when the customer is considering alternative suppliers.
Sensor Tower cultivates responsibly-sourced market intelligence that provides visibility into the trends shaping the global digital economy so that their customers can make better business decisions.
At a topline level, what is the strategy you adopt in order to best position yourself for a successful customer renewal?
I'm always consultative in my approach; understanding your customer is the most important part of selling, in my opinion. If you're approaching a renewal conversation informed and prepared with solutions, you're much more likely to have a positive outcome.
Knowing the successes and pains the client experienced throughout the previous year, when in the renewal phase, are equally important. We ask if they won a piece of business that would require our data as part of their ongoing reporting, or if they expanded any partnerships. Have they lost clients or business? Have their budgets been impacted?
Being able to articulate key elements of the partnership, the levels of engagement (their dependence on data we provide), where value was driven, addressing previously mentioned pain points — including if and how they were alleviated — and being fully open to any and all feedback is crucial in establishing that this is a partnership and not simply a client/vendor interaction.
If you take the time to understand your clients and establish a plan that will address their needs, you have the opportunity to not only retain your clients but expand the partnerships you already have in place.
Please share a time when you had to take a creative, out-of-the-box approach to a customer renewal that ended up being successful. What was the approach and what did you learn from its success?
I had a particular client in the publishing space who was threatening non-renewal of their subscription because a competitor had other similar pieces of data and an additional element that we do not include within our offering.
During that renewal, I proposed we complete a data validation exercise on each of the platforms. My conversation with the decision maker went something like, "If driving revenue (new sales and account growth) is the main use case for our data, you want to be sure you're arming folks with the best and most accurate data possible. Without that, any conversation is over before it starts." In addition to suggesting the data validation exercise, I proposed opening up access to all their sellers: new business, account management and even customer success, if there's space.
By putting our data to the test and suggesting the client do a side-by-side analysis, and by giving the client an expanded set of user licenses, I was able to increase their subscription costs by 32 percent, year-over-year, and secure a 24-month contract. I also heard during a recent quarterly business review that they did not renew with the competitor we were originally up against and that savings funded our expansion.
What is a common mistake account-facing professionals make during the renewal process, and how do you recommend they avoid it?
A common mistake during renewals is trying to rush right into a proposal, or to give up when you hear your customer say they won't be renewing next year. It's really valuable to have a conversation with your main points of contact to fully understand where their business is now. Is their legacy subscription doing what it should? What challenges are they facing — with our data, or across various subscriptions? Are there any gaps in data, based on what we can offer them? How can we work with their budget?
We all become so close to our accounts that sometimes we get a bit of tunnel vision, so going to colleagues or management within our organization is always beneficial. I am constantly bouncing ideas off people and looking for fresh eyes on my accounts and the deals associated with them. That’s especially if I feel like there's more potential, or if I think my "stretch proposal" isn't stretching far enough, in which case I will connect with my senior vice president. He will be the first to say something like, "If you don't put a five-year renewal on the table, you'll never know if they would have said yes." I did wind up putting a five-year deal on the table, and the client did say yes.
Samsara is a leading IoT company that builds sensors, software and cloud services to help customers improve the safety, efficiency and sustainability of the operations that power the global economy.
At a topline level, what is the strategy you adopt in order to best position yourself for a successful customer renewal?
A successful renewal is the result of a great product and exceptional service, capped off with a smooth negotiation of commercial terms. To position us for successful customer renewals, we adopt a strategy that emphasizes relationship-building, value delivery and proactive customer engagement.
This includes several key components. The first is to build trust, meaning to prioritize rapport through active listening and effective communication. Next, create an exceptional experience by providing prompt support and proactive issue resolution. We also showcase value. Alongside the customer success manager, we demonstrate the return on investment and value Samsara offers by aligning with customer goals and highlighting results. Proactive engagement is important, too. We maintain regular communication, check-ins and product updates to ensure ongoing customer satisfaction.
It’s important to collaborate internally, working closely with internal teams to leverage customer insights and enhance the overall customer experience. Finally, we give it strong negotiation, engaging in commercial negotiations that prioritize both customer satisfaction and internal company priorities, finding the win-win solutions.
Please share a time when you had to take a creative, out-of-the-box approach to a customer renewal that ended up being successful. What was the approach and what did you learn from its success?
In a recent case, an ambulance company sought cameras for patient video and audio capture, a service not directly offered by Samsara. We worked collaboratively with the account team and internal experts from product, sales, engineering and related departments to explore innovative solutions based on this particular need. By leveraging overlapping features, customizations and third-party integrations within our existing offerings, we found a workaround that addressed this customer's request. Rather than losing the customer to competitors, our dedicated efforts paid off. They chose to remain with Samsara, even purchasing additional products to enhance their solution. This experience reinforced to us that adaptability, teamwork and exceptional customer service are all required skills for customer success professionals.
What is a common mistake account-facing professionals make during the renewal process, and how do you recommend they avoid it?
A common mistake that account-facing professionals often make during the renewal process is approaching customer engagements with a strong agenda. They talk at customers instead of actively listening to them. While it's natural for sales professionals to focus on closing deals, this approach can sometimes have an adverse effect. Prospects and customers are more inclined to do business with individuals who genuinely care about their needs and challenges.
We prioritize active listening so we can truly understand how Samsara can support our customers' businesses and establish the most effective partnerships. Active listening involves attentively hearing and comprehending the customer's requirements, challenges and goals. It allows us to build stronger relationships with customers and tailor our solutions to their specific needs, making the renewal process more successful.
Zoom Video Communications helps people stay connected by making video communications frictionless and secure.
At a topline level, what is the strategy you adopt in order to best position yourself for a successful customer renewal?
I go into every renewal opportunity partnered with the rest of the Zoom account team that supports that customer. The group consists of the assigned account executive, the renewals manager and myself as their customer success manager. I make sure I understand their use case and usage metrics and review notes from past meetings so I know what is essential for their business needs. My approach emphasizes understanding the customer, actively listening and focusing on their unique needs and challenges. This strategy can enhance customer satisfaction, drive successful renewals and uncover additional opportunities for business growth.
Please share a time when you had to take a creative, out-of-the-box approach to a customer renewal that ended up being successful. What was the approach and what did you learn from its success?
I had a renewal meeting with a client where the customer initially stated that they wanted to downsize their current licenses because of their leadership’s direction to use a competitor. We had a renewal call and it became clear our customer wasn’t aware of all the solutions we had to offer. After asking discovery questions they became very interested in one of our other products. We ended up having additional calls which turned into the customer signing up for the new product they learned about and keeping many of their current licenses. We also provided bundled pricing discounts which made the customer very happy. This outcome highlights the power of effective communication and thorough needs assessment in the renewal process. By proactively showcasing the value and versatility of our offerings we addressed the customer’s initial concerns. We exceeded their expectations by introducing them to a valuable solution they had not considered before. The customer’s happiness with the bundled pricing discounts further reinforced our commitment to delivering exceptional value and meeting their needs.
What is a common mistake account-facing professionals make during the renewal process, and how do you recommend they avoid it?
A common mistake is being unprepared for the renewal call with the customer. It’s essential to avoid making assumptions about their renewal intentions only to discover that they want to cancel or downsize their subscription. To mitigate this risk, I recommend cultivating a solid relationship with your customers and understanding their product usage deeply. By maintaining open lines of communication and regularly engaging with your customers, you can proactively gather insights into their needs, challenges and evolving requirements. These help you anticipate any potential surprises or changes in their renewal plans. A thorough understanding of their product usage allows you to identify value-add opportunities, address any concerns and tailor your approach during the renewal call. A solid customer relationship, combined with a comprehensive understanding of their usage patterns, enables you to approach the renewal conversation with confidence. By avoiding assumptions and being well-prepared you can navigate potential challenges and ensure a smoother renewal process.
