Shifting Gears: Prioritising Contract Renewals in the New Financial Year

With the new financial year underway, it's time for businesses to shift into gear on contract renewals. Now is the moment to focus on current clients and not just coast along on automatic for the next six months. Ensuring the satisfaction and loyalty of existing clients requires dedicated effort and strategic planning. Sales teams need to consider current clients and current contracts as part of their sales pipeline, fully engaging with these critical clients and addressing their needs proactively.

I once sat in a contract renewal kickoff meeting at a services company where the Executive General Manager (EGM) started the meeting with, "Don't worry about this one, team. We've got this. The client loves us." This complacent mindset led the team to coast on automatic, confident that renewal was certain. However, they lost the contract. This lesson highlights the importance of staying vigilant, focused, and proactive, even with long-standing clients.?

To avoid such pitfalls, it's essential to understand that client relationships require ongoing attention and effort. As the new financial year unfolds, businesses should prioritise several key actions to ensure the retention and satisfaction of their current clients.

We recently conducted a poll on contract renewal priorities which revealed some interesting insights:

1. Regular client communication - 14%

2. A structured renewal strategy - 43%

3. Exceeding deliverables & KPIs - 43%

4. Sales-Operations teamwork - 0%?

It's noteworthy that while 43% of respondents believe a structured renewal strategy is key, many businesses fail to implement one effectively. This disconnect between understanding and action highlights a critical area for improvement in contract renewal processes.

Firstly, sales teams must engage in regular and meaningful communication with clients. Despite only 14% of poll respondents prioritising this, it's a crucial aspect of maintaining strong client relationships. This involves more than just checking in; it requires understanding their evolving needs, challenges, and goals. By staying connected and informed, sales teams can tailor their offerings to better serve their clients and demonstrate ongoing value.

Secondly, businesses should implement a structured contract renewal strategy. This includes setting clear renewal targets, establishing timelines, and assigning responsibilities. Regular review meetings can help track progress and address any potential issues before they become critical. This proactive approach ensures that contract renewals are treated with the same urgency and importance as acquiring new clients. The last thing any business needs in this economy is to find themselves re-bidding for a contract they have already won!

Retaining hard-fought contracts is much more beneficial (and financial) for businesses than prospecting for new work.

Businesses should focus on reaching more than just the contract deliverables or monthly KPIs and should identify additional services or products that can benefit their clients. The poll results show that 43% of respondents recognise the importance of exceeding deliverables and KPIs, indicating a growing awareness of going above and beyond to make clients feel valued and receive the best service in the marketplace. This approach is critical to renewal activities. It not only strengthens client relationships but also increases revenue streams. A tailored approach, where the specific needs and preferences of each client are considered, also significantly boosts renewal rates.

Surprisingly, the poll showed extremely low prioritisation for Sales-Operations teamwork. This is a concerning oversight, as collaboration between sales and operations teams is vital. Operations teams play a crucial role in delivering exceptional service and addressing client concerns. By working closely with sales teams, they can gain insights into client expectations and proactively address any issues. This seamless coordination ensures clients receive a consistent and high-quality experience, reinforcing their loyalty and their desire to keep your team as part of their solution. The lack of focus on this area suggests a significant opportunity for businesses to improve their renewal processes by fostering better interdepartmental collaboration.

Finally, it's essential to create a culture of client-centricity within your organisation. As our EGM above very quickly learnt, suggesting to the team that we're doing enough and that the contract is in the bag, very quickly leads to failure. A client-centric approach involves fostering a mindset where every team member understands the importance of client satisfaction and actively contributes to it. Regular training sessions, workshops, and incentives can help instill this culture, along with positive and constant client touchpoints, this ensures everyone is aligned with the goal of retaining and delighting your current clients and delivering up to, and beyond, their requirements – every day of the contract, not just when you could lose it.

Planning for contract renewal success should be knitted into the DNA of every contract you have won – from day one.

So, make this your focus – and that of your team – as the new financial year gets underway: ensure your business shifts into gear on contract renewals. Focusing on current clients and not just coasting along on automatic is crucial for sustained success. By engaging in regular communication, implementing a structured renewal strategy, identifying upselling opportunities, fostering collaboration and creating a client-centric culture, you will ensure your current clients remain satisfied and loyal. Remember, you worked hard to secure this contract in the first place. So, shift up a gear, focus on your current client needs, and ensure they have no reason to slam on the brakes, open the door and ask you to leave.

TO FIND OUT MORE

Aurora Marketing - Tenders, Bids, Proposals, Submissions works with our customer’s business development and operational teams, management and key bid/sales personnel to facilitate?a?proactive and interactive series of workshops to ensure all the necessary requirements are in place with enough lead time to deliver successful contract extension or roll-over, without going back to market.

To get help with ensuring your view to success is front of mind for both your sales and operations teams, contact?our team?of renewal specialists today. We provide obligation free consultations that focus on tailoring a solution to meet your needs and budget.?Click here for more.