When it comes to revenue retention, sales renewals are supposed to be the lowest hanging fruit. But, if that’s the case, then why is it such a struggle to proactively identify and execute these critical opportunities?
Renewals should happen like clockwork, but they almost never do
You would think executing customer renewals would be easy. You just find the renewal date in the contract and then reach out to the customer to execute the renewal. The problem is, in many cases you can’t even get your hands on the right agreement. There could be multiple systems where agreements are stored, different versions of the same agreement, and there are amendments and modifying documents that need to be considered too. Beyond that, renewals are often driven from external events that are not documented in the original agreement. All this makes the seemingly easy task of understanding a customer’s renewal picture, a truly challenging and complex one.
Case in point
A customer sells hardware - the hardware they sell has a licensing term and, typically, they pair the hardware license with a maintenance package. For operational reasons, the maintenance package almost always has different terms than the hardware license. So, now they have two different renewal dates for one deal! That sounds complex enough, but let’s look at what it takes to understand the maintenance renewal alone.
The maintenance agreement will typically say something like, “The term of this maintenance agreement commences on the installation date of the hardware and continues for 3 years. The agreement will then renew, at the option of the customer, for 5 successive 1 year terms on the anniversary of the installation date.”
If we unpack that language, it’s saying that the renewal date is based on the install date of the hardware. So, to calculate the renewal date, first you need to find the commencement date, which is probably sitting in a billing or provisioning system, then you need to combine that data with the contractual term information. Only then can you accurately calculate the maintenance renewal date.
All said and done, it might look something like this:
So, just to understand one customer’s maintenance renewal, you need to answer a variety of questions, such as:
- How many renewals are associated with this customer’s deal/solution?
- How do I know when the hardware was installed?
- Is there a notice period or requirement that I need to be aware of?
- How do I present my customer with a complete picture of their upcoming renewals?
Now or never, choose “now”
We all know that managing your renewals and expirations can drive incredible revenue retention and expansion. What you may not know is Pramata improves sales effectiveness including getting more revenue from renewals far easier than ever thought possible. That’s because we’re laser focused on eliminating the barriers between your renewals team and the accurate, complete customer information you need to act quickly and successfully. Pramata helps you:
- Identify true expiration dates from across multiple contract-related documents
- Synthesize data from multiple systems (ERP, CRM, CPQ, CLM, billing) to identify truly accurate renewal dates
- Automatically notify account teams and key stakeholders of upcoming trigger dates via email alerts and social messaging tools
You may think you or others on your team have the time and ability to synthesize and deliver the critical customer information you need, but unless you unearth the most relevant information that’s hidden in your customer contract, you just can’t get there.
It’s important to get out in front of your renewal opportunities, and stop leaving significant revenue on the table or worse, losing valued customers. When it comes to capitalizing on renewals, it really is now or never.