The cost to acquire one dollar of new customer Annual Recurring Revenue (ARR) is $1.60., while the cost to expand an existing customer is only 69 cents. To successfully drive real growth for your business, you must focus on preserving and expanding the customers you already have. Despite the obvious advantages of mastering and scaling the renewal process as SaaS companies grow, renewals still pose a big challenge for most. Some of the renewal management challenges for many businesses include:

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Patrick Schumacher
Q4 - How to - Customer Success Renewal Process
blog.journy.io/q4-how-to-customer-success-renewal-process
The cost to acquire one dollar of new customer Annual Recurring Revenue (ARR) is
$1.60., while the cost to expand an existing customer is only 69 cents. To successfully
drive real growth for your business, you must focus on preserving and expanding the
customers you already have.
Despite the obvious advantages of mastering and scaling the renewal process as SaaS
companies grow, renewals still pose a big challenge for most. Some of the renewal
management challenges for many businesses include:
Lack of a customer-centric approach
Overwhelmed CSMs managing renewals, health, and expansion.
Too many customers for the current headcount
No harmony between teams and touchpoints involved in the renewal process
Failed attempts at scaling renewals that end up in fire-fighting
Problems interpreting data for accurate forecasts
Poor automation and customer segmentation
No proven renewal playbooks
Customers derived little to no value

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1. Determine What At-Risk Means And How To Monitor For It
Risk should be the foundation for any renewal strategy. By identifying risk in your
customer base, your team will drive action to mitigate it faster and help drive up
retention. Naturally, the first step of establishing a renewal process is defining the leading
indicators of risk within your customer base. They could include:
Change of an executive sponsor
The number of support tickets opened
A drop in usage of your product or key features
Negative survey responses or low NPS/CSAT
Missed onboarding, adoption, or lifecycle milestones
Lack of perceived value by your customer. This includes shifting priorities within
your customer’s business, which are likely during this economic downturn.
Lack of visibility or missing indicators that can escalate the possible churn of a
customer
And it’s important to consider how these leading indicators change between customer
segments or lifecycle stages.
But merely identifying those indicators is not enough – it’s essential to have a system in
place to monitor for these signals and automatically alert your customer success team
when they appear. This system should also understand which signs are most important or

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indicative of customer health, and treat those signals differently.
An excellent tool for assessing risk is journy.io customer success platform’s health
scorecard. Leveraging your Customer Success (CS) platform to monitor health and
identify at-risk customers will allow your team to resolve any issues and not face
surprises come renewal time. Some examples of measures we see commonly included in
Scorecards are:
Engagement frequency, including executive engagement
Product usage or license utilization
Support tickets (number of opened tickets and priority)
Customer sentiment (e.g. NPS, CSAT)
CSM assessment
Return on Investment (ROI)
If you’ve already established a basic health scorecard and are ready to take it to the next
level, incorporate signals from sources outside of the customer data you collect in your
CS platform. These signals include important news and business driving events, such as
acquisitions, funding rounds, CEO changes, or financial losses that occur at a customer
account.
2. Proactive Communication Throughout the Entire Customer Lifecycle

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It’s been said before, communication is key. I like to think that the reason people say this
is because without it, you are locked out of a situation (without the metaphorical key). In
this case, without knowing how to properly communicate with certain clients, you are
going to have a hard time getting back into that house.
Building a proactive customer retention strategy by being the trusted adviser allows you
to focusing your energy on long-term client health. Here are a few ways you can practice
staying proactive in order to improve your overall renewal strategy:
1. Show Initiative: A proactive communication approach rather than reactive shows
initiative. Practice active listening during your client meetings to understand their
challenges and increase engagement. This will open the door to new opportunities
during the renewal cycle and contribute to their KPIs.
2. Identify Pain Points: Renewals are a practical indicator of good client health. It
also suggests whether they are adapting to your product or not, and also where
they can improve through your company’s other products and services. By
proactively identifying pain points and providing solutions, you become an
indispensable resource to your client and your management.
3. Set Expectations: worldwide public cloud revenue will grow
This is good news for cloud spending, but it also means there are a lot of competitive
products on the market. Enterprises are constantly vetting their current marketing
solutions. A negative customer experience could have devastating effects by the time it
comes to your renewal discussion. Setting realistic expectations upfront will increase
customer satisfaction and reduce churn, as well as avoid having your business end up on
the chopping block of SaaS tools.
Step 3: Limit Sales’ Involvement
If no one owns renewals, they will not get the attention they deserve. That being said,
most salespeople who are really good at closing business, are really bad at managing the
renewal process. The skill set required to keep an existing customer happy is different
from the skill set that’s required to close net new business. Of course, there are some
exceptions to this rule. However, you can’t design a scalable process around those
outliers. Each customer should be passed from Sales to Customer Success after the
sale is closed.

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Step 4: Build the Process into your CRM
Most CRMs aren’t built to track renewals so doing so requires some customization. That
means you need to create mandatory fields in your CRM to ensure your organization
knows when customers are due to renew.
Renewable Product (Yes/No): If possible, add a field to each product indicating if it
is renewable or non-renewable. For example, annual licenses are renewable.
Configuration fees are not.
Renewal Date: Add a custom date field to Opportunities that shows when a license
is set to renew.
Renewal Stage: Create a drop-down for renewal opportunities that better reflects
the stages of a renewal (in contrast to the traditional sales stages the CRM provides
off the shelf).
5. Leveraging CS tools for renewals
Customer Success relies on strong, timely communication with clients at all phases of the
customer journey. To make this process more efficient and effective, automation plays a
key role. These same platforms can be utilized for disseminating renewal reminders,
product awareness information, and other recurring renewal messages.

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Similarly, data gathered by CS, such as level of adoption, feature usage, license
utilization and a customer’s time to value, can be invaluable information in driving renewal
success. The same database used to pinpoint areas that may require a CSM’s attention
can be utilized to identify useful feature usage trends, areas of focus and specific churn
risks for renewal purposes. Available data can also be leveraged to help the clients
themselves make a better informed decision about their renewal options. For example, if
the data shows they aren’t using one feature they’re paying for, but are maxed out on
another and could benefit from additional users in that area, maybe that becomes an
upsell play during the renewal.
6. Planting renewal seed early
Wherever the actual responsibility for renewals falls within your company, Customer
Success can and should be a catalyst to help drive renewal success. CSMs have the ear
(and hopefully the trust) of your clients. They can predispose a client toward renewal by
constantly spotlighting the value being realized from your solution. They are also likely

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familiar with areas of the client’s operations beyond current product applications and can
prime the pumps for an addition of features, products or services during the renewal,
regardless of who’s processing that paperwork.