Missing contract deadlines can have a negative impact across your business.
For revenue leaders who are accountable for providing a revenue forecast to their finance department and the board, it’s crucial for them to conclude a quarter with an accurate reflection of the revenue they retained. Late renewals most commonly reflect a poorly defined process or the poor execution of a well-defined process. The inability to secure renewals on time has a negative impact well beyond the team accountable for renewing – this could include Finance and their ability to accurately close the quarterly financials, which are communicated to the board (and investors).
This heavily impacts Finance because they are responsible for constructing a company's financial plans based on actual $'s vs. anticipated $'s (higher risk), compensation calculations, and payouts to team members' compensation tied to retention, says Sydney Strader, Vice President of Customer Success at Catalyst.
Externally, past-due contracts open the door for companies to provide their customers with an unpleasant and abrasive experience. Suppose companies aggressively pursue expired contracts, such as turning off access to the service to get customers to pay. In that case, this can place customer-facing teams in an uncomfortable position.
Lastly, revenue leaders want to keep a consistent rhythm in communication with the team relative to the goals being attained. Morale and momentum are affected if the team can’t conclude the quarter with accurate results, lessons learned, and the impact that may have on their compensation (if the CS team relies on variable comp).
Catalyst is a Customer Growth Platform that enables companies to generate more revenue through their customers. The CS team comprises of Implementation Managers, Customer Success Managers, Renewals Managers, and Customer Support. They support a wide range of customers in the B2B SaaS space, from SMB to Enterprise.
Melanie English, the Senior Renewals Manager (RM) at Catalyst, noted that Catalyst wasn’t always connecting when customers were finalizing budgets, which, generally speaking, never coincides with their actual renewal date. Meaning customers were trying to secure additional funding internally after the budget for Catalyst was quoted and approved. This put Catalyst and, more importantly, the executive sponsor advocating to renew with Catalyst, in a vulnerable position–customers sometimes had to return to their CFOs to ask for more money.
So Melanie decided to shift her approach and timing to renewals.
“The solution here was pretty simple… Get in front of customers within their budgeting cycle and provide them with a projected cost of the renewal to proactively arm them with the information they needed."
Average renewal closing: 28 days before renewals
100% renewals closing before or on the renewal date
2000% increase in expansions won at renewal in Q4 vs Q3
Ran the Play
As the team responsible for securing customer renewals, Melanie, the Senior Renewals Manager, learned that customers were looking for two concrete things: predictability and prescription. Her process was focused on creating a win-win situation: ensuring the customers' needs were delivered on, while still maintaining a focus on achieving Catalyst's growth and expansion targets.
As she was considering how to redefine their approach to renewals, Melanie focused on the data she had at hand (and what was missing), the experience she wanted customers to have, and the technology she’d need to stand up her process.
To build the workflow, she leveraged Catalyst Software to automate touchpoints, set alerts and capture data. This saved her a considerable amount of time by reducing manual work and gave her access to reporting that measured the impact of her efforts.
Here’s the step-by-step breakdown of the Play:
Step 1: Start the conversation early
Previously, renewal conversations started within a timeframe (i.e., 90 days before renewal for SMB/Mid-Market accounts). However, the new approach anchors the renewal conversations to the customer’s budgeting cycle. To do this, Melanie set up a playbook within Catalyst that sent an automated–yet personalized–email introducing herself as the customer’s partner to ensure that, commercially, they’re set up for success.
Step 2: Gather the intel you’ll need
As part of the introductory email from the Renewals Manager, she included a survey to help her gather budgeting and procurement details from the customers. This email was sent to all customers who met the above entry conditions in seconds.
Step 3: Capture the right data
Using the information collected from the survey, a new field was created in Catalyst called “Budgeting Cycle Start Date.” This field tracks the budgeting start date on each account and is then used for reporting and automatically triggering tasks and emails, unlocking proactivity for the Renewals Manager.
Step 4: Reach out at the appropriate time
Using the “Budgeting Cycle Start Date” field, Melanie then created another automated email that shared her scheduling link with the customers who were nearing the beginning of their budgeting cycle:
Step 5: Arm your stakeholders with the right information
This step is broken down further to show you how Catalyst articulated the value of the partnership and gave its customers the data they needed to allocate the budget for Catalyst.
Step 5a: Articulate the value to the customer
After taking on the renewals workflow, Melanie quickly discovered that a common pitfall was that she did not have direct access to the decision-makers. They were typically delegating to their team, and it wasn't clear if the team was delivering the full picture of the value they were receiving from Catalyst.
To ensure the full value of Catalyst was communicated appropriately, she created a one-page quick ROI review. This asset outlines the customer’s wins with Catalyst in a way that closely aligns with their OKRs and company goals.
She uses the details on the account’s dashboard within Catalyst to capture the data used in her asset and closely collaborates with the accounts Customer Success Manager to ensure that, as a team, they are delivering a consistent, cohesive experience for the customer.
She then included this takeaway piece in her follow-up communication, which the commercial team shares with the stakeholder who is advocating to their finance leader for the funding needed to secure their contractual requirements X months from now. This step mitigates the potential risk of miscommunication surrounding the value delivered by Catalyst.
Step 5b: Provide a prescriptive renewal proposal
With the ROI of Catalyst communicated, now it comes down to talking about money!
Previously, the Renewals Manager would gather information from the customer on how they felt the company would expand in the future. This puts the onus on the CS leader to have growth projections at their fingertips, which is time-consuming and requires them to align with other stakeholders.
“We all have so much going on, and the last thing I want to do within the renewal conversation is add more to a customer’s plate. This was one significant contributing factor to delays in getting our renewals signed on time and led to stressful conversations as we were operating within strict timelines,” explained Melanie.
They used Catalyst to come to the table with an educated proposal and recommendations on licensing needs. Renewal Managers looked at the number of new accounts they’ve added to Catalyst month by month, calculated their growth rate, and then projected their growth rate (i.e., 40% new logo growth annually) into the next renewal term.
Coming to the call with the projections already identified removed unnecessary legwork for the customers and gave them and the RMs a baseline to start from.
Impact of the Play
The impact of this Play has been threefold for Catalyst:
Revenue. Since launching this prescriptive renewal process, Catalyst saw 2000% increase in expansions won at renewal in Q4 vs Q3, and 0% of renewals were past due. More importantly, thanks to Melanie’s ability to articulate to customers what Catalyst’s renewal process is, she ensures renewals are secured, on average, 28 days priors to their contract date. This not only helps increase the accuracy of the company’s revenue forecast but has also armed the CS leader with reliable revenue metrics to inform the goal attainment of the team and drive data-backed conversations in the boardroom.
Efficiency. Previously, between one-off emails, call scheduling, and asking customers for their growth projections, a lot of time was lost. The team was reactive in their approach to renewals, and due to this, it impacted revenue goals and the customer's experience. Through leveraging Catalyst for automation and data capturing, meeting with customers at the right time–during their budgeting cycle– and providing prescriptive proposals, the Catalyst team runs a time-saving renewal workflow. Melanie calculated her time savings given the redesign of the renewal process, and on average, the Renewals Manager team is saving one week per quarter!
“For the volume of renewals I'm completing, I'm finding a minimum of 60 minutes of savings per renewal. If, on average, I manage 40 renewals per quarter, I'm looking at 40 hours per quarter of time saved. That's an entire week per quarter that I am now spending on more meaningful activities!” Melanie English, Senior Renewals Manager @ Catalyst
Customer Experience. Customers shared very positive feedback about their experience during the renewal process! They are adamant about never wanting to find themselves in a position of 1) hounding customers for a signature 2) causing customers avoidable stress 3) having to threaten to turn off a team's access to Catalyst. They appreciated the team’s proactiveness by scheduling calls in advance and arming them with the data they needed to make informed decisions. To capture their customer’s feedback, the Catalyst team follows up with a post-renewal survey, which has an average satisfaction rate is 4.6/5!
“The renewal deck and how Melanie walked us through pricing and expectations set to close ahead of the renewal date. It made me want to redesign our renewal process! The process in itself was INSPIRING, and the collaboration with Kiko, our CSM, seamless!!! - Catalyst Customer
Run The Play Yourself
Now it’s your turn!
Here’s how to start building your efficient renewal workflow broken down into three sections:
Identify your customers' budgeting cycle and timeline for renewals
Determine the data fields you need to capture from customers to inform your renewal strategy
Select and implement a workflow software that captures budgeting and procurement details (i.e., Catalyst Software)
Train your team on how to use the workflow software effectively
Use the captured data to inform your renewal strategy
Create a comprehensive renewal plan that outlines the renewal process, timeline, and communication strategy
Arm your stakeholders with the right information, such as the value of the partnership, projected cost of the renewal, and any other relevant data
Communicate the renewal plan to your customers, providing them with sufficient time to budget for the renewal
Monitor the renewal process closely and communicate any changes or updates to stakeholders and customers as needed
Evaluate the renewal process after completion and capture feedback for future improvements
How Catalyst Can Help
Many steps within this play were powered by Catalyst using email automation and playbooks. If you’re interested in learning more about how Catalyst can help you increase your expansion revenue and renew 100% of your contracts on time, book a demo with us!
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