Barry Wilson learned a vital lesson early in his renewals career: “Hope is not a forecast strategy.”
Professionals like Wilson, who now is Udemy’s manager of enterprise renewals, have goals that can be easily understood, like managing and negotiating the extension of contracts and retaining customers. But the strategy to do so successfully is far more complex, demanding concrete plans, informed decisions and a keen understanding of each client.
Contract extensions aren’t just surface-level transactions, they’re crucial opportunities to grasp a customer’s shifting needs, bolster relationships and deliver value for all.
With TechCrunch projecting an 18 percent increase in SaaS spending in 2023, based on an analysis of $2.5 billion in SaaS spending and 18,000 deals, the stakes for effective renewals are high — and opportunities to capitalize on this demand are plentiful. Still, the process can’t be taken lightly.
For RingCentral’s Senior Renewals Manager Katie Turnmire, foresight and actively listening to needs are key tenets of customer retention and success.
“While also protecting revenue and the value of our product, we can guide our customers through a renewal that fits all their needs,” said Turnmire. “This includes adding new features, offering executive alignment on goals and promoting a successful ongoing partnership."
These Colorado-based renewals experts shed light on their strategies, lessons forged through experience and the art of developing lasting, win-win relationships.
RingCentral is a cloud communications and contact center solution that helps businesses elevate their customer support experience and centralize communications in a single platform.
At a topline level, what is the strategy you adopt to best position yourself for a successful customer renewal?
When initiating renewal discussions, it’s critical to pull together a team with the greatest knowledge and expertise related to the customer and their business initiatives. We work collaboratively with our accounts team, client success managers and technical accountant managers to understand the health and needs of the account. This teamwork and communication starts at the beginning of the relationship and is consistent throughout.
As renewal managers, this allows us to strategically approach a renewal discussion with balance. Our customers and their needs are our top priority, so we must serve as active listeners to offer guidance and support to create a great experience. While also protecting revenue and the value of our product, we can guide our customers through a renewal that fits all their needs. This includes adding new features, offering executive alignment on goals and promoting a successful ongoing partnership. We also bring in our product experts when needed so our customers have a full understanding of how our solution can help them grow their business and achieve success.
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?
What makes my role exciting is that each account and its needs are unique. I’m able to learn and challenge myself to find creative approaches to each scenario. One instance involving changing team members, client integration needs and cost concerns led us to think creatively and ultimately achieve a successful renewal.
Recognizing the client had integration and auto-renewal concerns we were able to proactively propose not only an early renewal but also offer an alternative solution that beat competitive pricing. By leveraging our strong relationship with accounts and customer success teams, we were able to keep the renewal and highlight the long-term benefits our solution offered that directly addressed their needs. Additionally, as proof of concepts fluctuated, our team stayed committed to building trust and communication, which led to securing a 55-month renewal that exceeded over $1.3 million in total contract value.
A key lesson from this approach is that consistency and care in nurturing relationships matter. Understanding your client’s needs from the beginning helps proactively address pain points and tailor your solutions that help them be successful.
Understanding your client’s needs from the beginning helps proactively address pain points and tailor your solutions.”
What is a common mistake account-facing professionals make during the renewal process, and how do you recommend they avoid it?
A common mistake account professionals make involves identifying the key players. Who are the stakeholders that make the decisions, manage the budget and experience the most challenges with their current solution? Many times we are directly engaged with individuals within the organization who are a part of the process but ultimately need higher approval for terms. We have found that setting expectations upfront on what we are trying to accomplish together allows the correct decision-makers to be brought into the conversation early on, so we can effectively and efficiently move through the renewal process.
Udemy’s marketplace for learning and teaching offers over 210,000 self-paced, on-demand courses. The company is one of Built In’s Best Places to Work in 2023.
At a topline level, what is the strategy you adopt to best position yourself for a successful customer renewal?
As a renewals team, our job is to aid customers in obtaining a contract that delivers value and helps our business retain our existing customers, all while expanding our footprint and providing an accurate revenue forecast. My approach to delivering on these centers on two key tenets: partnership and proactivity.
Our strategy begins with seamless alignment between our internal partners in sales and customer success. This starts no less than six months before the renewal and is crucial for mitigating risk and growing our business at the time of renewal. Once our team engages the customer, we’ll also focus on ensuring our customer’s decision-makers see us as a resource for them. We frame up a negotiation and renewal process that steers to a positive outcome for all parties.
In the SaaS world, every touch point with a prospect or customer influences the future renewal decision. I coach my team to leave a positive imprint on every interaction with both our internal and external partners. When we focus on being proactive, we also position ourselves in a way that leads to a positive outcome for all.
When we focus on being proactive, we also position ourselves in a way that leads to a positive outcome for all.”
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?
We recently had a customer undergo a major restructuring of their organization seven months before their renewal date. With this, our account team immediately knew there would likely be significant budget concerns given our customer’s focus on reducing overhead expenses.
In cases like this, many people’s first reaction is to attempt to save as much of the recurring revenue as possible with a short-term agreement due to the uncertainty for the customer, then hope you can earn it back in time. Instead, we leaned in on the value we provide. We engaged our customer’s decision-maker early in the process and focused on the ROI we had provided to date and would continue to provide for them in the future.
Regarding the creative tactics we needed to leverage, we showed flexibility and an eagerness to be a partner, even though it meant giving some ground in the short term. We provided our customer with a contract option that helped them through this challenging time while delivering a long-term commitment with built-in growth that would guide them back to where we both wanted them to be in two years.
What is a common mistake account-facing professionals make during the renewal process, and how do you recommend they avoid it?
Early in my renewals career, I learned a vital lesson that has significantly influenced my approach: “Hope is not a forecast strategy.”
Where I have seen most account-facing professionals misstep — myself included — is by committing deals and renewals in the forecast when they don’t have a detailed, mutually accountable and definitive close plan in place with the customer or prospect. Too often, the plan is vague, or it doesn’t exist, and the rep expects that since the relationship with the client is good or usage of the product is trending positive, the deal or renewal is inherently going to happen and will be on time.
As sales and renewals professionals, we need to be certain of the forecast we deliver and drive buyer behavior and outcomes. If we don’t outline exactly what we need to happen and when it needs to happen, how can we expect to get the result we want?
I recommend all account-facing professionals to ask the difficult questions of their buyers, build a mutually agreed upon action plan that drives the deal to an early close and hold each other accountable for delivering on that plan.
