How do you manage the renewal and retention of your Enterprise Software customers?

The emphasise is on Enterprise customers; and on retention. So the context is - the company is already using the software. In the enterprise world, while there is one signing authority to renew the subscription, decisive inputs come from the 'users' of the software. Keeping that mind, these are something the users love 1. Frequent, incremental features but not disruptive - remember they use your software daily for their job. If things change often, they cannot do their job. 2. Frequent communication about how to use a certain part of the the product which are not utilised well. 3. Option to give feedback 'through the software' and not through support and sales channels. 4. Guided - any enterprise software should look to Guide the users.

The first step is to understand your customers business and how they are using your software. Does your software play a critical role in running their enterprise and if the customer decides not to renew their software would this cause a business risk for them? Understanding the customers challenges and risks may help you derive better value for them which will not only retain the customer but also grow your footprint into new departments or lines of business that may benefit from this value. Engaging early with the customer at least 6 months before their renewal is due, will allow you to build a strong enough business case to justify why the customer should continue using your software and will also allow you time to try and mitigate risks.

Client retention is critical for Enterprise vendors. Acquiring new customers is 5 times more expensive than retaining an existing customer. Now that they are a customer, how do you keep them? 1. Be proactive. Have regular sessions with your customer. Analyze the system with their team, train them and recommend improvements. Being proactive prevents future problems. 2. Their system problems are your problem, give them personalized, priority service and keep the customer informed at every step until the problem is solved. 3. Get regular feedback and encourage your development team to innovate to make your customer more productive. Your mission is to help the customer achieve their mission through continuous improvement and reliability.

Sales executives tend to place greater emphasis on customer relationships and the technical advantages of their software, while the critical aspect of making contracts 'sticky' takes a backseat. We're not just talking about renewals; we're talking about locking in your success! Start with long-term commitments that scream value, with customizations that fit your customers' uniqueness: payment schedules, modular add-ons, scalability..etc. As they experience top-notch support and exclusive features, why would they ever want to leave? Then it should all be about loyalty, and loyalty comes with rewards: discounts, extended support, and beta access. With guaranteed uptime and consistent service, the prospect of switching will seem less appealing

Client retention is built on having a deep understanding of the client's business, their pain points, constraints and desired outcomes. Continuously gather information from client stakeholders and communicate the value your software delivers, capture feedback, solve problems before they occur, be proactive. Understanding client needs and goals is a continuous process - not a one off.

Building strong relationships with your customers is key to your success. Relationships can be build from top to bottom or from bottom to top in an organization however it is very important to have at least one champion in each of your strategic customers. A champion is a person with some influence who promotes your software internally and has the ability to convince executives who are making the purchasing decisions. Having a strong advocate will help you immensely.

Execute on the value communicated during the sales cycle, renewal starts from onboarding, ensure a seamless handoff from sales to customer success, accelerate time to value, get your customers up and running and ensure the use cases and requirements are being met. Then the focus shifts on value realization, ensure your users, buyers and stakeholders are aware of the value being realized.

I'd advocate that the most enduring and valuable relationships are built on frequent and proactive communication from both sides, deep alignment to achieve mutual goals - and multi-level comms. For enterprise software sales, set up regular dialogue across functional groups, management levels, geographical groups etc. Building trust takes time but its critical to long term relationships.

Trust and credibility between the customer and the vendor are foundational and necessary drivers of a successful relationship. Trust comes from credibility that we develop and grow over time. We establish credibility by making the customer’s opportunities the same as ours, and by treating their challenges as our own - even if it has little to do with our product or service. After all, we don’t succeed until our customers do. In summary, the Golden Rule applies to business relationships too - “do unto others as you’d have them do unto you.”

People buy from People. It is important to identify key stakholders and decision makers for renewal and engage with them early before the deadline. Building relationship and being a trusted partner will go a long way in influencing renewals

The customer bought your Software for a reason, make sure that during the term they are actually using it, ensure that you are refreshing their knowledge and showing value. I agree with showing the ROI, mid term would be a great time to calculate ROI, cost saving or performance gains and prove your original selling point, that way at the time of renewal customers understand the value.

The whole shift to the subscription economy is just that, ongoing value delivery, give your customers a reason to stay. They bought into the value you deliver now and the incremental value which will be delivered through innovation and next practices.

Enterprise softwares are increasingly becoming composable., which means now customers have options of choosing niche products for specific functions which tends to add more business value and at the same time integrate and work seamlessly with the Enterprise software. A continuously delivery of innovative features and addressing market needs will prevent this from happening and ensure customers doesn't looks for alternates very often.

Probably one of the most crucial steps. Through proper account management and/or customer success management, vendors can stay on top of their service delivery to ensure customer satisfaction and increase chances of renewal. One thing I have found to be useful is to schedule a quarterly cadence (e.g. QBRs) with key stakeholders and decision-makers in which you highlight usage and value delivered over the last 3 months. Some of these stakeholders are top executives who are too busy to go into the fine details with their team members, hence it's important that they understand how their investment is being utilized. You can be prepared during these calls with a brief presentation that includes factual data on how value was eventually realized.

Dont wait until renewal date is on the horizon, I have seen many sales teams only visiting the customers once a year to pick up renewals, this is a sure way to get customers looking around.

It’s imperative customers are onboarded fast, value delivered constantly, and as a vendor you are focused on adoption, and value being realized by the customer. Your customer and value journey is key here, are there steps being missed, or taking longer than the benchmark, step in and guide, then accelerate the value realisation

Measure, Benchmark and Improve The product suite which can easilty help customers to track key KPIs and give visibility to business improvement metrics tends to score better and get closely associated with business success. Introduce product features like that or help customers create and monitor those metrics, so that they realize the growth trajectory and business value that software delivers

I'm not a fan of renewal campaigns as it implies that "business as usual" is not sufficient reason for a client to renew. Client success teams should be incentivised to build trusted relationships and continually measure and improve the value delivered by the client. Understand the value your product delivers, evaluate competing offers before your client does, identify switching costs to ensure there's a clear case to renew - these should all be part of great client service. Why wait until 6 months before renewal to up your game. Start on day 1.

Targetted Campaigns / Renewal Based on previously discussed factors, create a targetted campaign or renewal strategy based on customer propensity to renew. Ideal situation is customer renewing without much of campaign or marketing and decision based on their usage experience and business needs. However an analysis of the factors will provide a view of the sales team to focus on customers who are more like NOT to renew, there by focussing the efforts.

This should be a shared experience with your enterprise client. Continuously learning, sharing and improving works for both vendor and client. Put a framework in place to capture learnings both good and bad from both perspectives. Create a feedback loop, share positive learnings and resolve under-performance quickly. It all builds a positive relationship.

Ultimately, the goal is to create contracts that not only benefit the company but also align with the customer's evolving needs and provide value-added services, making it more profitable and advantageous for them to renew. Building trust, flexibility, and long-term partnerships are essential elements in making enterprise software contracts sticky and conducive to customer retention. Contracts need to be designed to cultivate loyalty, adaptability, and long-term partnerships. The goal is simple: make your enterprise software contracts a compelling proposition, not just for you, but for the customer's own prosperity. Your message to your customer should be: "we're not here to lock you in, we're here to set you up for unparalleled success"

Renewals are driven by accelerated deployment and end user adoption of the software capabilities. Software must be adopted broadly within an organization for the organization to realize return on their investment and process efficiencies.