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A major challenge for businesses in the B2B space is how to effectively manage their renewals. If you are still manually inputting your renewals, then you’re hurting your business. Without a roadmap detailing a solution that moves you from manual input to automating your subscriptions, you will likely spend too much time on input while being prone to errors. Being inefficient with your time as well as being error-prone prevents you from focusing on what matters most: Your business and customers.
According to Gartner, by 2025 80% of B2B sales interactions between sellers and buyers will occur in digital channels. This provides an opportunity to improve your business processes and match your customers' evolving expectations. Automating your renewals is the defining shift that allows you to meet your prospects and customers in those digital channels.
Here are four reasons to make the shift:
Reduced Churn Rate
Reducing customer churn is essential for any subscription-based business. According to McKinsey, companies with top-quartile growth have lower customer churn than mean performers – 10% to 30% lower. In order to achieve that type of metric, it is important to develop and maintain your customer's journey. Automating your renewals is an important part of that journey as it reminds customers of upcoming payments. This reduces passive churn, which is often a silent killer of subscription businesses. In addition, those companies with top-quartile growth not only focus on lowering customer churn but expanding customer purchases within existing accounts.
By focusing on automating your renewals to proactively inform customers of upcoming payments, businesses can reduce customer churn and achieve sustainable growth.
Increased Customer Lifetime Value
Identifying your Customer Lifetime Value, CLV, provides the clarity your strategic roadmap needs for assessing acquisition costs and ways to effectively retain customers. Per McKinsey, CLV measures the total value of a customer over the lifetime of their relationship with your company. Your CLV is a crucial metric for understanding the satisfaction your customers have with your product and services. So, knowing your current CLV directly impacts your long-term strategy with your customers. By automating your renewals, you retain your customers for repeated renewal cycles. It goes without saying that the more they spend on your product or service, the greater their CLV and your revenue stream.
If you think renewal automation and auto-renewal are the same then you’re wrong. Here’s why.
Improved Customer Satisfaction
Automating your renewals can have several benefits for businesses, including reducing customer churn, increasing CLV and improving customer satisfaction. This requires developing a customer-centric focus, seeing your processes from their perspective and understanding their pain points. In a study by Gartner, 72% of B2B buyers completed a recent significant purchase transaction by ordering or paying online. If your renewals are managed manually, often with a great risk for errors, then you’re likely losing revenue.
By automating your renewals, you’re providing customers who are satisfied with your products or services with a barrier-free process to renew. Furthermore, satisfied customers are also more likely to spend more on products or services, increasing your CLV. Viewing pain points, such as a manual renewals process, from your customer’s perspective allows you to improve customer satisfaction through automation. Automated renewals are an essential tool for businesses that want to improve customer satisfaction and increase revenue.
Free Up Time for Your Customer Success Team
Automating your renewals frees up time for your customer success team so they can focus on high-priority tasks such as expanding the scope of existing customer relationships or working on nuanced deals. This allows your team to be more productive and efficient, which can lead to even more growth for your business. Freeing up your customer success team also allows them to spend time gathering feedback from customers. This provides an opportunity to identify pain points and provide new ideas for concepts that may work better than current processes.
The right time to use renewal automation is now. In the B2B space, managing subscriptions effectively and efficiently is a major challenge for growth-oriented companies. Automating your renewals can increase customer satisfaction, reduce churn rates, and increase CLV. This frees up your customer success team to spend time on high-level tasks that will grow your business. As previously mentioned, B2B buyers and sellers operate in digital channels. If you’re not taking advantage of the opportunity to do more with less and address your customers in those channels, then you’re not only providing a subpar customer experience, but you’re also likely losing revenue.
Cleverbridge has helped hundreds of SaaS businesses automate their renewals, and other sales processes. We allow our clients to focus on their revenue growth, while we do the heavy lifting in the background. Interested in finding out how you can transform your renewal processes and empower your revenue growth with automation? 