Is it just me or are renewals more challenging this year?
What are the biggest adjustments you’ve made to not only lock in renewals, but also drive expansion when belts have tightened?
Looking for any tips, thank you!
Hello Tim!
IMHO, you should know if a renewal is at risk or not well before it comes time for renewal.
Too often I have seen reps who are blindsided at the time of renewal (30 days from Expiration).
The way I get ahead of this is to run a Value Realization exercise and show how your solution helped them achieve their corp metrics.
Most vendors tend to focus more on pre-sales and far less on post sales (which is why they are surprised at renewal time).
People want to share their successes with programs they are responsible for.
It really comes down to the following:
1.) deliver business results
2.) be a solution, not a tool
3.) have a strong army of champions, and exec sponsor(s)
High level but this is how I can gain insight into a full renewal or not.
Happy to discuss live in more detail if interested.
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Great breakdown. Completely agree with all the points. Especially the lack of emphasis on post-sales, and having a system in place to be primed for renewal. Easy for people to forget to maintain that focus and build that new narrative and id champions.
Been tougher this year to lock these renewals with budgets the way they are and a do more with less mentality. What seemed like slam dunks in 2022 haven’t proven to be in 2023.
I firmly believe the system you laid out is a great way to be prepared to present the strongest case possible when the time comes.
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Thanks @tim.hartwell!
To be clear, it would be ideal to do the Value Realization well before the contract is up for renewal. I like to design them as a simple exec one pager for everyone who is enjoying the success supported by my solution can use as a flag to wave.
The point in the Value Realization is to highlight the pain we remove and by removing or reducing their investment will reintroduce the pain we removed.
Hope this makes sense.
Personally, I am doing this process with my customers. Not only has it been completely insightful for me, but also the customer.
Good Luck!
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@greg.nishihira, great insight!
Couple quick follow-up questions:
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Have you noticed more of an uphill battle with renewals these past few months with a lot of belts tightening? Any specific trends stand out in those renewal conversations that feel unique to this year?
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Have you run into any situations where your key champions are no longer with the client? As a result, have you had had to put any Plan B’s in place?
Thanks again for all your info on the topic!
It is always important to focus on the value you have delivered, but with the economic client in which we now operate it has become even more vital to hone in and clearly demonstrate the value you have delivered - and the plans you have in place to deliver it in the future. That is not always the magic elixir, but absent a compelling value narrative the road towards renewal is that much more perilous.
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I don’t know about you all, but I have seen more stakeholders and champions leave (either on their own or downsize) this year than in years past. Takeaway lesson for me (in addition to what others suggested above) is always to be looking to add new champions (don’t just rely on your main champ) to de-risk and be aware of executive movement and how it may affect the initiatives you’re tied to
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REALLY appreciate this question, @tim.hartwell. I think we’ve all seen and are experiencing the differences from this year vs. 2022. I’m also in COMPLETE agreement with @greg.nishihira, @andrew.gibian, @matt.conley.1, and @amy.tsao.demmler.
I recently closed a renewal and an EXPANSION last month, with a very well known consulting firm. We started with a one year “Pilot program” and for the past year we’ve implemented a very strategic relationship management plan and established a steer-co, with very specific success criteria and clear objectives and key results (OKRs).
Sales people are notorious for acting like locusts: They close a deal and then it’s on to the next. IMHO, it doesn’t work like that. Sales people should remember that they are advocates for their clients, responsible for building trust and maintaining the relationship for the duration of the agreement. Good old fashion: Customer Support and Success, with very clear OKRs in place.
That’s always worked for me.
Thanks again, @tim.hartwell.
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@Matt.Conley. sorry for the delayed response, I was on PTO in Japan.
So regarding the uphill battle, so far the only thing I have experienced is the customers are looking for flat renewals. Fortunately, I have been able to maintain the uplift agreement and add growth YOY.
The other situation that is beyond any control or sales process are acquisitions. Nothing new hear, but what I have been pressing on are Value Realizations so that my Champions and Exec Sponsors can waive the flag on success they have had with our solution.
Regarding Champions who are no longer my client…I ran into that once, when I was too dependent on one Champion. This is why I press for building an army or fleet of champions. Should one leave, which you should expect, you have backups.
Yes, I do maintain a “heat map” of people to have a visual on who likes us, who is neutral, or who hates us. The more green the better.
My only plan is to build my army of champions and build executive relationships.
One bold move I ofter make with my execs is that I want my team on stage with you as you hand them the vendor of the year award. It is bold and you have to back it up, but exec appreciate the goal. ;^)
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Some of you heard about me talking about being an observer…
Well, this CEO drives home the point I have been making here and with companies I have worked with in the past.
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I saw this going around on LInkedIn. Thank you for sharing it here, too.
Perfect example of what NOT to do.
Customer relationships could never be built with correspondences like that.
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