What are the most effective SaaS renewal negotiation skills?

To retain customer loyalty and ensure the renewal of your SaaS product, it is essential to educate customers about its incremental value achieved during the subscription period. Instead of resorting to further discounts and initiating a new sales cycle, focus on demonstrating the unique benefits of your product to encourage customers to renew their subscriptions. * Value the product added * Additional features and roadmap * Business Benefits * Performance, Scalability, Cyber Security Improvements * Peer adoption

Always keep in mind the original reason they bought. What were the outcomes they were trying to achieve, what were the stretch objectives and did they have needs they weren’t aware of? This should be forming your joint success plan so your champion can demonstrate success every quarter/month/week internally. Rather than you then having to negotiate a renewal it becomes a conversation about what more you can do together.

Renewal is a seeded conversation, not a momentary discussion. Right from the day the customer journey starts, there needs to be a consistent view of how the product delivers value to each goals (which again show cases importance of mapping customers vision to buy the offering). It’s all about showing up consistently to the customers and being empowering + emphatically involved in their success. Adoption = Stickiness = Renewals

Build an OKR (Objective and Key Results) model for the customer - identify the Why - What was the objective of taking the SaaS subscription, and are they achieving their key results and objectives with the solution? If yes, you are in a sweet spot to renew and upsell. If No, discover why and what it takes for them to realise the value of their investment in the solution and help the client attain the total value.

Before you approach your customer for a renewal, you need to understand their needs, goals, challenges, and feedback. Use data and analytics to track their usage, engagement, and satisfaction levels. Identify their pain points, successes, and opportunities for improvement. Communicate with them regularly and proactively to address any issues, provide support, and deliver value. Knowing your customer will help you tailor your renewal offer and pitch to their specific situation and expectations.

The customer needs to understand the value that they are getting for the product but the value has to be relevant and meaningful to them. Once you have aligned on what that value is, you need to make sure you work toward (and provide) the value. The work doesn't stop there. Customer needs change and evolve. A value proposition that worked at one point in time, may not be relevant down the road. Circle back and probe on what the customer needs on a regular basis. If it has changed, adjust. Renewals are hard to come by if the customer can't quantify the value they have received or communicate that value to the decision maker.

One of the most important strategies to secure the renewal is providing and proving their value before the renewal date. Here's how: 1. Find positive usage data over the past year. 2. Turn the data into positive value metrics the customer can relate to. Example: Saved time, Money saved/made, etc. 3. Present these value metrics in an engaging way through email, in-app messages, or the last QBR. 4. Re-evaluate their needs and setup for the coming year and propose a renewal plan to maintain or increase their value continuously. All in all, start delivering value early, communicate that value, and close the renewal proactively, starting at least 90 days before the renewal date.

For an account or CS manager it's important to consider each "Sale" as a new "Lead" This way, each onboarding session, check in call, quarterly review or renewal discussion is in some way a pitch or a demo. View and map your portfolio within a Renewal pipeline and use activation, frequency of engagement, adoption, NPS feedback and consumption metrics to allocate appropriate stages. In B2B saas, they are still on their buying journey, especially after they have bought.

It’s vitally important throughout the duration of the customer experience to be hyper focused on increasing your brand equity. My recommendation is if you’re at the end of agreement and still in a commoditized scenario, the focus on strengthening your customers perception of reliance was a miss.

Value propositions either need to solve a problem the customer has mentioned, or solve a problem that they didn’t know they had. Problem-solving is going to be very key as it will continue to show the solutions your product or service brings, increase perceived value, and create customer champions. When your value is apparent, a renewal becomes a non-event.

Be sure to set the expectations and guidelines of a standard renewal so that there is control over the process. This includes making recommendations in the buying process, setting milestones for reviewing products, as well as anticipating any legal documentation required. Know what the potential points of delay will be and set an appropriate or conservative timeline to ensure an on-time renewal.

Preparing for customer objections can be challenging. Especially when trying to figure out where to begin. A practical approach is to evaluate your customer's usage. Drawing upon past experiences with similar customers found in your book of business and how you solved these same objections. Consider reviewing previous tickets and identifying common friction points, and you can create an objection roadmap based on how these issues were previously resolved. While each customer is different, recognizing similar friction points can help guide your approach.

Objections are par for the course in SaaS renewals. Whether it's about price, features, performance, contract terms, or alternatives, being ready to tackle objections head-on is key. It's all about anticipating these concerns and having well-prepared responses in your toolkit. We prioritize empathy, active listening, and using open-ended questions to dig deep into the core issue behind their objection. Understanding their perspective is our compass for addressing their concerns with confidence and clarity. By anticipating objections, we don't just overcome them; we propel the conversation forward towards a successful renewal.

I’d say one of the golden rules of sales is to know your competition. Most customers have the same objections and compare to the same competitors. Ensuring you can understand the differences in the competing product, and convey the value of YOUR product or service over the competitors, regardless of cost is a major key. There are reasons why some of the leading brands have higher costs. Leverage the power of the brand and value proposition. Cost savings are important in this economy, but the factors of trust, viability, and capability in products are always important. On the other hand if your product is more competitively priced, ensure you convey the strengths of the product along with the savings.

Highlight the problem you're solving and the benefits you're providing. Some healthy competition is good - remind them why they chose your platform and how you have delivered compared to their previous solution. Foster multi-stakeholder engagement in the renewal process to utilize varied perspectives in your favor, especially if facing resistance. Approach objections not as hurdles but as opportunities to reinforce the platform's benefits and the strategic partnership value. Always listen actively and respond with data-backed clarity.

One thing to consider when deciding to offer discounts is determining whether the client would have renewed without them. You don't want to condition clients to expect a deal or you will be giving them one for a long time. The incentives need to be tailored to the product and business model with an eye on the long term implications. Do you want to give a free trial that requires a credit card to activate? What happens to those that sign up and then forget. Yes, you get the revenue but a disengaged customer is a risk. If you try to engage with them down the road, they may realize that they are paying but not using and will cancel.

incentives serve as potent motivators to not only secure renewals but also bolster customer loyalty. The spectrum of incentives is broad, ranging from discounts, free trials, and upgrades to referrals, testimonials, and loyalty programs. However, a cautious and thoughtful approach is essential. Not all incentives are created equal, and the wrong ones can dilute our value proposition or foster unhealthy dependencies. Our strategy hinges on providing incentives that are not just relevant but also timely and in alignment with our customer's unique needs and objectives. It's about striking that delicate balance that fortifies relationships and ensures renewals are a win-win for both parties.

Incentives could be linked to 1 time occurrences - to ensure it doesn’t become a regular expectation. Such as a 75th founding day discount. Or there is an option to create non commercial incentives - such as priority service , with a more stringent SLA or a new multi language support feature added for free. It creates the avenue to charge the yaar after as well.

I agree, incentives should be used to add value or reduce risk for your customer. Incentives are a great tool to use in conjunction with other offers and benefits, or to offset a cost of a particular benefit. It is important to know your customers’ needs and requirements to provide a good service and encourage subscription renewals. By taking the step to learn your client’s goals and requirements, you can uncover the ways they benefit from your service. This enables you to collect data and create reports highlighting the value your service added to them during the contract. You can also use the data to inform the clients of ways your service cuts back on resource costs.

Incentives, offers and extras shouldn′t be given out just like candies, otherwise should be for everyone and become a main marketing campaign. Otherwise, keep those very special surprises to those who deserve it, why would they deserve it and you would need it to close a renewal? Most likely if your previous service period wasn′t good on your side, if you didnt provide good customer service then your customer will need an extra, otherwise those incentives could go out to your top accounts. iF GOOD SERVICE WAS GIVEN THEN THERE IS NO NEED FOR INCENTIVES.

Have you heard the saying, burn me once, shame on you. Burn me twice, shame on me? If negotiation is conducted and closed out in a way that your customer feels manipulated, like they were taken for a ride, you will burn a bridge. The relationship will take a turn for the worse, and you will need to work harder and longer for the next renewal. When negotiations are conducted where both parties feel like they are getting something in the process, the bridges are built more strongly. Structure and position the proposals in a way that can demonstrate what the client gets out of renewal. Consider how they will be able to justify the spend and make sure it is positive. CFOs will love you!

Negotiation is a delicate art, and I always prefer to present the customer with three options. Explain the outcomes accompanying each option. By doing this, we can communicate to the customer the approaches in this manner. Position yourself based on the actions of previous customers in similar situations and the importance of these choices. By providing these options, you give the customer the freedom to choose and share real-life examples of what their peers have done in similar circumstances. Every contract is unique, this approach allows you to communicate the customer's concerns, and the integrity of your company while leveraging the experiences of others with similar intentions.

More often than not, you are negotiating with people that arent engaging directly with you. eg Finance You are discussing price:value with your champion, who is a user or a functional decision maker. They understand the value and see the price. Financial decision makers understand the price more deeply. Understanding the price means contextualising: 1: What is the opportunity cost of this renewal? 2: Why aren't we able to get it even cheaper? 3: How much of the "Value" can be replaced by some more human elbow grease? Make sure to get a 360 degree view of how your product is viewed and consumed at their company. This will not only put you in better stead at the negotiation table, but it will make your champions life easier .

Begin negotiations by focusing on mutual understanding: 1. Start with 'why' questions to discover real needs behind stated demands - identify core interests. 2. Actively listen to their explanations to demonstrate you value their motivations. 3. Offer solutions addressing these fundamental needs, moving past initial requests. 3. Work together to tweak these solutions, making sure they fit both parties' objectives. 4. Finalize an agreement that pleases everyone, fostering a durable relationship. Transparency is key. Ensuring you know their motivations and they know yours makes a solid foundation for mutual value. It also builds honesty for a strong collaboration moving forward.

The only way to succeed on this is, LISTENING. If you pay attention to your customer and their concerns then you may base your info on that and create the need, which you will solve. When negotiating its important to stay in the need path and fulfill their needs with their likings, based on the created need path. After all, sales are sales, closing and negotiation are exquisite and delicate. Pay attention, create a path, solve, fulfill, succeed.

Following up is like the bread and butter when working as a customer success professional as your customers are relying on you for all the updates. So, whether it's following up with the internal team to update the customer about his/her points or it's about following up with the customer for something requested by your internal teams. This is a two way street where the CSM stands right at the center to handle both the sides.

Following up internally with teams and the customer's progress is an important aspect of renewals. Gaining insights from your team regarding whether the customer has closed the loop with your department. Reviewed all customer tickets and ensured that they had been adequately resolved or addressed. When engaging with the customer, prioritize addressing any outstanding issues and resolving them promptly. It is essential for customers to feel acknowledged and valued throughout the entire process for them to consider renewing their service. Create an environment where they feel comfortable communicating and having conversations with your organization before initiating a renewal discussion.

When you're able to provide a solution that helps the customer scale into the future while consolidating their vendors and spend, it is difficult to imagine that there would be any reason why they wouldn't renew or increase spend.

Once a product is sold to the client its important to also follow up with the client atleast a month after the sale has been concluded ,this helps retain the customer and appreciate the after sale customer service .Perhaps have some reward discussion with the customer and how the product will benefit them .

One thing I have find useful is that I offer my client a full authority to go through every inch of my product and extract the minor to minor problems he/she faces during the usage of the product. It gives them a feel of ownership to that product and they always provide honest suggestions.

I have heard many people complain that the only time they heard from the vendor is when it was time to renew. How does you get around this? It is critical to think that the renewal process starts with the close of the first sale. The renewal process does NOT start 60 or 90 days out from renewal. Companies need to be ongoing interactions that provide value with customers. Interactions could be automated communications, webinars, or personal interactions. Whatever or however a company does it, if it provides value to the customer, they will be much more inclined to renew.

Renewals really start with the original sale. As a sales professional, you have worked with your customer to identify opportunities that your product will provide them around increasing sales, reducing operating costs or improving operations. In order to effectively build an environment where your customer will renew, you have to check in regularly to make sure that they are receiving the outcomes which you presented during the sales process. If you are waiting until right before the renewal time, you have have waited far too long. So you have to be checking in with and helping your customer take full advantage of your product and then the renewal should be a near automatic decision for the customer.

Consider all the potential issues customers may encounter with your service and where they might not find value. Identify and list these friction points. Be aware of your competitors in the industry and understand what they are doing better. Understand why your product and service have the value they do, and understand the cost. Preparing for these obstacles is important, as it allows you to have more productive conversations with your customers and avoid being caught off guard. We can normalize these discussions with ourselves to approach customer interactions with clarity and confidence.

IMO we shouldn't be thinking about renewals as an opportunity in our pipeline to progress, negotiate and close. It's a long term partnership and digitalisation programme with multiple milestones, starting with initial value being realised and then continuous improvement/digital maturity. Ensure the customer is realising the ROI they signed up for (including driving them through the change-management barrier) and understand/co-create/co-map-out their long-term vision for digitalisation. Show week-in, week-out that you are truly invested in their success and that you are a trusted long-term partner. As long as the customer is a good fit (ICP) and your solution is performing, renewal shouldn't come down to a negotiation, it should be a given!

Showing you care comes from checking back on past problems the customer mentioned. Being honest and looking closely at their account—pointing out both the good parts and the bad, and how you've dealt with the tough spots—builds trust through honesty. The negatives are typically overlooked or ignored, whereas I believe you can turn those into assets in a renewal process. Highlight what you've done for the client when they were not always satisfied and pair it with the positives.