Challenge: The Technology Services Installed Base for the one of the world’s largest Enterprise Information Technology companies was beginning to look more critically at service renewals. Contracts that had been automatically renewing for years, were now more often being reviewed by clients to negotiate better terms. The EIT Company had to prepare its renewals team to justify current prices, maintain price increases and get renewals completed.
Solution: The renewals team developed a playbook for navigating the renewal process. It included milestones and dates to ensure notices went out, risk was identified and accounts were prioritized for escalation. Management developed strategies for two tiers of accounts, with prioritized accounts having greater resources allocated to them:
- Account Reviews: For the top 20% of accounts, renewal reps worked to schedule Account Reviews 90 days in advance of the renewal date. SLAs and performance were reviewed, breakdowns were addressed and remedied, and competitive threats were uncovered that would require special considerations as renewals approached.
- Automated Renewals: For the 80% of renewals that did not necessitate formal reviews, automated renewal processes were enacted to inform clients of upcoming renewals. Renewal teams sent emails and calls incenting clients to renew and implemented automatic price increases. The goal was to maintain a high renewal rate while doing so as efficiently as possible.
Results: After a year of implementing these new practices, net renewal rates had increased 5%, leading to millions in additional revenue. Keys to success included:
- 8% Reduction in churn due to satisfied clients opting to continue the relationship
- 50% reduction in downgrades due to the team’s ability to defeat competitive pressures and stepped price increases