By Logan Monday
When it comes to business growth, customer retention is often overlooked in favor of acquisition. After all, acquiring new customers is a necessary part of any business’s success. However, what many businesses don’t realize is that customer retention is just as important as acquisition, if not more so.
In fact, studies have shown that it costs five times more to acquire a new customer than it does to retain an existing one. Additionally, existing customers spend 67% more than new customers.
In the B2B space, customer churn can be especially detrimental to growth. That’s why it’s important for businesses to focus on retaining their customers through renewal automation.
Why Renewal Automation?
By automating the renewal process, B2B businesses can free up time for their customer success teams to focus on other tasks, such as expanding the scope of existing relationships. Research by McKinsey shows that successful automation efforts are more likely to be driven by an interest in improving customer experience.
Additionally, automated renewals reduce customer churn by ensuring that customers do not forget to renew their subscriptions or fail to renew due to billing issues.
Work Smarter, Not Harder
Working smarter means automating your customer engagement. With automation, you can easily pick up on points of friction in your customer experience and address them before they arise again. For instance, if there was a lot of negative feedback from customers about the same issue, an automated system could notify customer support reps.
Additionally, positive customer feedback for a product can automate a request for testimonials. This is supported by Forrester, as targeted interventions provide customers with the support they value.
Another way to "work smarter" is by automating recurring payments, reducing the need for manual intervention. This means that you don’t have to worry about forgetting to charge someone or having to chase them down to get paid, thus ensuring revenue retention while also freeing up your employees to focus on more nuanced deals.
Here are four reasons why automating your renewals will be a game-changer on retaining customers for you and your business.
Reduce Manual Work
Manual processes are inefficient and error prone. They require human intervention, which often takes longer than automated solutions. If you have a large number of subscriptions, then you need to make sure you don't end up spending too much time on redundant tasks, such as processing manual renewals or related back-end work.
Those automation efforts can support improving the customer experience by checking customers with upcoming renewals and cross-referencing their payment methods to ensure they’re up to date.
Reduce Customer Churn
The first step to reducing customer churn is to develop and maintain your customer’s loyalty. Now, every business is going to experience customer churn. The key is choosing which type of churn to focus on reducing. Involuntary churn provides low-hanging fruit for customer retention. Reviewing your customer’s payment options and sending an automated email requesting a payment update is an easy way to reduce involuntary churn.
Arranging proactive reminders through email automation for your customers is simple to implement and provides your customers with time to update their payment method before their renewal cycle is complete.
Increased Revenue Per User
Renewal automation reduces manual inputs, decreasing input errors and lowering operating costs for your company. With those factors combined they can quickly increase your revenue per user. During the renewal period, your renewal automation process can include a personalized offer based on your customer’s usage. Companies that offer personalization have been shown to drive 40% more revenue growth than their slower-preforming competitors. Applying personalization during the renewal period through renewal automation is your opportunity to up-sell or cross-sell.
By utilizing renewal automation to its full potential, you’ll reduce your manual inputs, decrease errors, and provide personalized up-sells. This increases your revenue per user while making recurring revenue prediction easier.
The time it takes to manage subscriptions can be a major challenge for growth-oriented businesses. Yet, it presents opportunities to gain a competitive advantage. By leveraging the power of automation to reduce manual intervention, these opportunities include lowering your operational costs while freeing up time for your employees to focus on nuanced deals.
Your customers will appreciate the convenience of self-service, your recurring revenue will be predictable, and your company will be positioned for healthy growth. McKinsey supports this by showing companies with leading digital capabilities grow five times faster than their peers.
So, by working smarter, automating your B2B renewals allows you to roadmap your solutions as you successfully expand in the digital space. This means you can focus on what's important - growing your business.
Cleverbridge has helped hundreds of SaaS companies by automating 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 we can empower your revenue growth and automation? Click the link below to begin today.