Renewals – Success Chain

Who wouldn’t like to secure 20 years’ worth of renewals with each of their customers?

Well, it is possible.

If you sell on a subscription basis, this should be your goal from the very beginning.

But how do you get there?

Ask yourself, “How would I need to approach and manage a new client relationship from the very start?

Achieving the 20-year renewal requires a shift in thinking and action. It requires that you change:

How you approach your sales discussions from the very beginning
Your service and value delivery approach

You need to create an environment in which a client is delighted to renew year, over year.

Selling for Logos (and Churn)

When we talk with SaaS vendors, we routinely hear some version of a story about how “sales are focused on getting new logos” and will “do anything to land a new customer.”

Typically, the conversations focus on the features and functionality of the software, how easy it is to use, and how fast they can have the system live. The sales rep closes the deal, gets the commission, and turns things over to the implementation and delivery team to make the customer successful.

And then it doesn’t happen.

The Waiting Game

Sure, the system gets turned on, and some people get trained on it.

Then, the customer waits for it use it.

They sit and wait for all the anticipated business benefits to come rolling in.

And they wait.

And they wait some more.

And no (or only limited) benefits appear.

Soon after that, the customer complaints arrive, followed by the inevitable, disastrous Quarterly Business Reviews (QBRs), a clear sign of the churn that is yet to come. And then that happens too.

Selling and Delivering for the 20-Year Renewal

So, what went wrong?

You won the deal, right?

The problem is that if this is your approach, chances are you may have won the deal but already lost the renewal.

Selling for the 20-year renewal requires you to shift your sales discussion. You need to move from focusing on the features, functionality, and potential benefits of your system to instead focus on how your Customer Success capabilities will ensure customers are successful in adopting the system.

From that flows the clear business value from the use of your software, and based on that, customers will be thrilled to continue renewing for the next 20 years.

Here are three ways to do this:

1. Set the Goal of a 20-Year Relationship from the Very Start.

It may seem counter-intuitive, but your initial sales conversations need to move beyond focusing on the immediate, pressing business problem. Instead, address how you will solve the new challenges that will emerge once the current need is met.

Get the customer to think past the immediate need. Help them look at what happens next.

Focus the discussion on the long-term, sustained business value that the customer will need to realize to renew for the next 20 years.

2. Map the Critical Path to Value Creation and 20 Years of Renewals.

Most technology project plans focus on the path to go-live and a little bit beyond. When you map out the critical path to ROI and renewals, you quickly see that accelerated and sustained, effective user adoption is what leads to renewals.

So, what actions and deliverables are needed over the long-term to make sure you get the user adoption required to deliver 20 years’ worth of renewable value to your customer?

Not sure?

Chances are, your customers don’t know either. You need to help them figure it out.

When you walk your prospect through a 20-year renewal timeframe, what will become clear is that after the system is live, what becomes most important is having a sustained effort to maximize adoption.

Help your customers discover that over 20 years, there will be changes to their internal structure, staff composition, products/services, operating environment, and overall organizational performance. All of these changes will impact user adoption and ROI.

The key to a 20-year renewal is helping them develop the capability to accelerate and sustain effective internal user adoption over the course of 20 years of ongoing organizational change and uncertainty.

Provide User Adoption Capabilities to Your Customer

3. Provide and Sustain User Adoption & Value Realization Capabilities for Your Customer

Most of your customers will not have a clue about how to put in place a program that drives and sustains adoption for 20 years. You may not, either. But you, and they, need to figure it out.

Helping your customers map out and proactively manage all the organizational complexities affecting user adoption and value realization they will encounter over time is not a core capability of most software vendors ? even those with a great Customer Success team.

Yet, this capability is precisely what your customers require to achieve 20 years of value from your system.

To address this need, you either need to build this capability in-house, partner with software adoption and organizational change companies to provide this expertise, or discover some way for your customers to solve this problem on their own.

Ultimately, unless your customers can sufficiently sustain adoption and ongoing value realization, the 20-year renewal will remain elusive.

When customer success (CS) first came into the mainstream, many vendors focused firmly on their product. They were very focused on specific features and functions. They spent a lot of time and effort explaining the product and its roadmap to customers.

From technology focus to a customer outcomes focus

Slowly, we are seeing a shift where CS teams are focusing on understanding the customers’ business objectives and desired outcomes. The current thinking is that by focusing on business outcomes, you can better demonstrate the value that the customer is achieving from the vendor’s product. This value discussion then will lead to increased upsells and renewals. This is an important and impactful shift. But it alone is not enough.

The critical area that has long been overlooked by CS teams (and their customers) is identifying and proactively addressing the required people-behavior shift that is needed to achieve success. Once desired business outcomes have been defined, CS teams and their customers need to put people at the center of their focus and efforts. They need to concentrate on helping users – people – change their behavior so that they are adopting technology in a way that will deliver the required business outcomes.

The people – behavior challenge

The biggest challenge on the critical path to customer success is not the technology itself. It is getting people to change the way they do their job on a daily basis, to embrace the system, and use it as designed and intended. It is figuring out how to make sure that current staff quickly shift their work behaviors and adopt the new system. And then it is about making sure that new hires rapidly adopt the new desired work behaviors so that they use the system in a way that creates value. And finally, the challenge becomes how to evolve and sustain effective user behaviors as both the technology product and the customers’ organizations develop. Without this ongoing focus on ensuring users deliver desired behaviors, the customers’ success will steadily fall over time.

Implications for Customer Success

What this means for customer success teams is that they need to ensure they have the expertise, experience, tools, and methodologies to help their customers address user behavior change and ensure software adoption over the long-term. All of the KPIs, automation, onboarding conversations, and QBRs will deliver little results over the long-term if your CS team cannot help customers solve their underlying business challenge – that is, driving effective user adoption that will yield the required business results.

CS leaders looking to develop people-centric customer success should do the following:

1. Map out the critical path that a customer must take from the time of first contact (pre-sales) up to the point of achieving their desired business outcomes. What specific behavior changes are required across the user populations to deliver this result? What do your CS services due to address these critical needs?

2. Ask yourself this question: If the system was already live, people had already been trained on the technology, and we still are not effective adoption, what else could we do to change users’ behavior? If you exclude changes to technology and additional system training and focus on peoples’ behavior, could you still drive success?

3. Increase the capacity to drive behavior change. Most CS leaders will find that their organization lacks the expertise, tools, and methods to identify the various factors that affect behavior and then proactively address these to drive desired behaviors across the user groups. If you lack these skills and processes in your CS team, how will you be able to help customers address this core need?

4. Once you have the right expertise on your team, look outside of what is typically done on IT projects to figure out where different actions, tools, and methods are needed to help users change their behavior and adopt the technology. Identify where you need to change how you engage with customers to get them to take the steps that will deliver desired behavior, and in turn, business outcomes.

5. Figure out how to scale your efforts. You will quickly realize that many of your customers probably lack the expertise, experience, and ability to drive software adoption within their organization. The biggest force-multiplier you will find is that by increasing your customers’ ability to drive adoption within their organization, they will remove a large amount of burden from your CS team. You will probably need to educate your customers on effective software adoption practices and methods. And you will need to figure out how to provide this type of education to your customers in a fast, scalable way.

The Success Chain team has worked with a large number of CS teams and the buyers of software to help them increase their ability to drive and sustain effective software adoption proactively. Our proven educational programs help buyers of software develop the skills they need to increase the effective use of software within their organizations. We also have corresponding programs for vendors that teach CS teams how to help lead their customers in developing successful software adoption programs. Please contact us if you would like to learn more and see how our scalable programs can work for you and your customers.