How much focus do you place on renewals? Often, it’s put on the backburner while salespeople place more emphasis on new business. New business is great, but renewals are the lifeblood of any book of business. If you don’t have a strategy to win renewals, or if yours needs an update, we have some great tips for you.
Customer Acquisition vs. Customer Retention
There are lots of stats on customer acquisition vs. retention. They offer some perspective on how you should devote your time.
- Acquiring a new customer can cost five times more than retaining an existing one.
- Increasing customer retention by 5% can increase profits by 25-95%.
- The success rate of selling to current customers is 60-70%, while it’s only 5-20% for new ones.
- Nurturing customers and creating loyal ones can positively impact repurchases, new product interest and referrals.
With these data points in mind, you are likely rethinking how to approach renewals. In considering how to win renewals, you also have to consider the changing landscape. You may have faced cancellations during the pandemic or a cutback in advertising. Things are looking much more optimistic, and many industries are spending ad dollars now.
As you meet with clients about renewals and new opportunities, take these tips and ideas along with you.
5 Tips to Win Renewals
We’ve put together some tips that should help you retain more clients.
Come to the Table with Data
Data fuels decision-making in the modern business world, and you need to impart it to your clients. It needs to be relevant to them, covering their industry, ad performance and geography.
Show them that consumer confidence is rebounding in their vertical with stats around buyer behaviors and how ads are driving behaviors in different mediums — radio, TV and digital.
Also, bring them performance data on their last interval. Present this in a way that’s easy for them to digest. Data visualizations could be useful in this scenario.
The bottom line is that when clients see data that supports what you’re saying, it’s hard for them to argue.
Be a Source of Ideas
Your advertisers may not have the expertise or experience around ad campaign ideas. They look to you, so you want to show them specific concepts that make sense for their customer base.
For example, offer them seasonal ideas around national days or holidays. May is National Military Appreciation Month. That would be a great time to create a campaign for special offers or discounts. You can target these audiences with digital advertising and run additional ads on radio and TV. (For more of these ideas, check out our holiday and seasonal content.)
Plan to have three to five ideas that are new to the advertiser that leverage data and opportunity. That’s a great way to show them how much their business means to you. You didn’t just expect them to renew; you knew you had to work for it.
Examine Why Customers Cancel
Last year was an outlier for identifying why customers cancel. Many companies closed for long periods of time and didn’t have the revenue to justify advertising. Take that out of the equation, and pinpoint other reasons, such as:
- ROAS (return on ad spend) wasn’t positive. If it wasn’t, why? Was the creative bad? The message off? Did the channel impact it?
- They went to a competitor. If this is the case, figure out what the other company provided that you didn’t. Was it purely a cost motivator, or is there friction in your process?
- The company decided to invest in other advertising channels. What are those? Were they aware you could handle those channels, like SMS marketing and search engine marketing (SEM)?
- The point of contact changed. It’s possible there was some shuffling, and your initial buyer left. If this was the issue, it serves as a reminder to stay connected to customers after the sale and build relationships.
Rethink Renewals as an Ongoing Process
Limiting your focus on renewals to that specific date when the contract ends could be costing you. Instead, reorient your approach by thinking of it as an ongoing process. You can nurture this by asking specific questions early on, including:
- What are your current challenges that I can help solve?
- What is the ideal outcome for using our services?
- What could I do better to ensure you’re meeting your goals?
- What are the positives and negatives of using our services?
- Has anything changed since the campaign launch around goals or business changes?
Asking these questions early and often is paramount to winning renewals. First, it demonstrates your continued interest in their success. You didn’t just get the sale and move on. Second, you can learn a lot from what your clients tell you during the campaigns. Third, you’ll understand their current concerns, which may be different than they were when they initially signed the contract.
Make It Easy to Renew
Business owners have little time to sort through paperwork, or they have endless meetings. The more frictionless you can make it, the better. Some of your customers won’t require a “new” pitch, although you should always introduce new opportunities.
For those clients that are very loyal, don’t let anything process-wise get in the way of renewals. You want it to be as convenient as possible on their terms.
Cheers to Winning Renewals
Customer retention is integral to sustainable growth for your organization. Employing extra effort to ensure you keep your clients is worth it. They deliver a steady revenue stream and may also refer others to you or agree to be part of testimonials or a case study. These tips and ideas could make all the difference in obtaining more renewal business.