Renewal Best Practices: Determining Renewal Dates

It’s a huge pain to figure out which deals are renewing and when. Get some tips to make your renewals process easier.

What Your CRM Won’t Tell You

Every B2B company has a CRM. Most have invested millions of dollars in making it the ‘single source of truth’ for their customer information. But the feedback we’ve gathered from sales reps is nearly unanimous: It’s a huge pain to figure out which of their deals are renewing and when, if it’s even possible.

They don’t know the next renewal date, or the notification period, or the renewal term. Or where they have products that are ‘off-contract’ because the deal has expired, but the product is still billing. 

When it comes to revenue retention, sales renewals should be the lowest hanging fruit. Why is it such a struggle to proactively identify and execute renewal opportunities using your CRM if that’s the case?

Renewals should happen like clockwork, but rarely do

Sales ops leaders agree—CRM systems should be able to identify renewals. After all, there’s a field in most systems called renewal date!

But the sad fact is that CRMs are only as good as the information that gets entered (and when). Sales ops teams are constantly creating workarounds to help their reps identify renewals. Maybe they add a field to the opportunity or contract object. They may do an annual pre-population of renewal opportunities. They provide extraction of inventory/billing systems. Or they give reps raw PDF files of contracts. Let’s be clear—these are NOT best practices.

To complicate matters further, sales reps often maintain parallel spreadsheets and as a result, create their own parallel renewal opportunities. Worst case scenario, they ignore renewals altogether because the data is wrong and it’s too hard to find the correct information. 

This chasm between what sales leadership thinks is going on (clockwork renewals) and what’s happening on the ground (weak or untouched renewals) can be traced to a handful of root causes:

#1 The right data never makes it into the system 

Your company may have grown via acquisition. Contracts from these acquisitions are spread over various sources and haven’t matriculated into the CRM. For net new deals, sales teams often don’t enter the right data into the CRM or enter it incorrectly.   

#2 The required information is scattered across your CRM

An enterprise deal may have a master agreement, multiple pricing schedules, and been amended several times. There may be dozens or hundreds of products purchased by one customer. The contract information is typically spread across individual contract or opportunity objects, and the product information sits in one (or more) inventory systems. 

#3 Figuring out what’s renewing requires calculations

Determining a renewal date often requires interpreting and combining multiple pieces of information. A signed deal may say, “The term of a product commences on the installation date and continues for three years. The product will then renew for five successive one-year terms on the anniversary of the installation date unless terminated.”

To calculate the renewal date, first, you need to find the install 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 renewal date for the product.

The term may not start for contract renewals until the first product is ordered. This is why it’s hard to find potentially at-risk products that are ‘off-contract’ or continue after the original deal has gone month-to-month. Of course, there’s also the issue of amended deals, auto-renewals and recalculating dates. 

#4 The date is never updated 

Let’s say you launch a big project to track down all your contracts, centralize them in the CRM, and calculate all your renewal dates. Without ongoing maintenance, the data goes bad within weeks.

If a deal renews, who is updating the next renewal date? What if it’s a month-to-month term? Or if it’s amended part way through? Or a new deal is signed? As we discussed in point #1, the sales team aren’t known for data entry thoroughness—their focus is understandably on closing more deals.    

#5 People ignore the information

Maybe you’ve made renewals a sales team priority, but they still aren’t being actively worked on. As we said, sales execs focus on closing deals. That leaves little time or interest in searching for customer relationship info.

That’s why pushing the information they need for renewals via Chatter, email alerts or other internal tools is key to adoption. Even this requires some nuance. Too many alerts and they ignore them. Too infrequent, and they forget. We’ve seen companies have a lot of success with monthly sales emails highlighting the renewals they should be working that month.    

What is the solution?

It is possible to provide your team with an accurate understanding of upcoming renewals and off-contract revenue. By understanding where the CRM falls short, best-in-class companies are taking steps to align and maintain contractual details for a more comprehensive and proactive view of the full contractual relationship.

Learn how you can better prioritize their contract renewals, prepare ‘renewal packets’ with the right information and improve offer strategies to drive stronger renewal outcomes. Read our best practices on the contract renewal process.

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