“Anything that is nice to have is out the window. You have to be really important to the customer and solve their problems.” - Sarika Garg
Founders, VCs, and RevOps professionals all agree: don’t just focus on growth, start prioritizing profit. When new business slows down, renewals and expansions are your best way to increase revenue and safeguard against an unpredictable economy.
To do this, get into the habit of connecting with customers more often, understanding their pain points, and really listening to what they have to say. Every company’s 2024 operational plan should center around best practices for renewals and expansions.
“A renewal is not just an automated event. It’s an important moment for the customer. It’s a point in time where they are evaluating their spend and the value of your product.” - Patrick Sweny
Start by breaking up your renewals into quarterly steps and keeping track of health scores that can guide these conversations and help you showcase value. Your Net Promoter Score (NPS) and the last 6 months of activities are a good starting point.
Auto-renewals are a straightforward way to reduce churn, just make sure that it’s the right motion for your customers. Some segments, like SMB, are best suited for an auto-renewal motion. Enable your sales reps to handle questions about auto-renewals, communicate through different channels starting 90 days out, and add auto-renewal language to your contracts.
“Companies end up leaving money on the table when they only have expansion conversations at renewal. Have touch points every quarter or even monthly.” - Sarika Garg
There are plenty of options when it comes to expansion. You can increase usage, seats, products, and API calls. It’s helpful to have tools in place to identify these whitespace opportunities for each of your customers.
The best way to get ahead of your revenue targets is to build expansion into your multi-year deals from the very start. This will save you time, re-negotiations, and lock in commitment early.
Here are 3 ramp strategies to try:
“If a customer tells you they don’t want to renew, don’t take no for an answer, be creative. It can go a long way in showing your customers you’re willing to work with them.” - Julia Kim
In order to prepare for renewals and expansions, you must start with high quality data coming from the right sources. Forecasting will become easier and more consistent and your reporting can help trigger calls to action for your sales team. This is where RevOps teams can really shine and become strategic players that move your organization and revenue forward.
Looking for more great content? Check out our blog and join the community.
