SaaS Best Practices with Renewal Management Software

SaaS runs on renewals. If your clients were to stop renewing their subscriptions to your software, your company would go bankrupt before the end of this sentence. This is why it then becomes important for you to have effective CRM subscription management by investing in a renewal management software. This blog walks you through what renewal management solutions can do for you & what you should be avoiding when it comes to renewal strategies.

What Can Renewal Management Software Do for You?

Software renewals management refers to the process all SaaS companies go through every time their customers’ subscription periods are expiring, at risk of being paused or at the brink of cancellation. This is the time to strategize how to push for subscription renewal and/or make changes to existing subscriptions that keep them active. Doing this is not only necessary for survival in saturated markets, but also allows business offering subscriptions to grow the LTV of their subscribers and maximize revenue.

Though this may vary depending on your business model and vertical, the general aims of software renewals management are as follows:

1.   Subscription Calendar for Renewal Visibility

Tracking and analytics is one of the biggest assets that a renewal management software can offer to you. Using its analytics tools, it can provide you with an in-depth assessment of customers payment behaviors and flags at risk profiles to rescue from churn. This requires high visibility over renewals.

Subscription renewal management tools help you by offering calendar view of subscriptions activated, invoices generated and paid, as well as overdue invoices. Without a streamlined, easy to monitor and consolidated view, you are bound and miss revenue leaks and fail at maximizing renewals. This is the reason that all SaaS enterprises and many SMBs invest in subscription management software—to stay ahead of their competition!

2.   Track Feature Usage & Renewal Strategy Performance

Closely monitor customer usage trends for different feature. This helps in product-led growth and lets you offer incentives to renew that are tailored to relevant segments. For example, an account that has been inactive except for one feature can be engaged to raise awareness about the value proposition of other features and can be sent a counteroffer for their favourite feature if they ever pause their subscription.

Tracking customer usage data and getting feedback lets you perform need-based segmentation that allows you to better succeed at CRM marketing in the last stage of the AARRR funnel i.e. retention through renewals.

3.   Forecasting Revenue

Budget well and forecast revenue to see how much revenue you can earn in the future to match your profit margins. Follow the best approach to revenue forecasting for subscription revenue. Software renewals management can help with this by giving you a detailed report on your customer satisfaction levels with your current offerings of licenses or their (dis)satisfaction with it. This will give you a fair understanding of the wiggle room you have to boost your prices to begin maximining your revenue without risking losing contracts.

4.   Optimizing Underperforming Licenses

There is no shame or harm in recognizing that something is not working quite as expected. Initially, you may want to give it another go and modify it in some way, but if a software is just not selling well or a subscription package is not becoming popular enough, this moment may be a reminder for you to cut it out and focus your attention on avenues of revenue that are working well.

SaaS renewal management allows you to assess how satisfied your customers are with each individual product by gauging primarily with their usage of it. If a customer has bought a subscription to one of your software for a year but only used it a little in the beginning before their use tapered off, there is a very high chance they may churn away from that software by not renewing their license.

5.   Managing Churn

How do you deal with such clients who are about to abandon your service? A subscription management software for renewals will help you identify such clients and will then send them timely emails, reminders via SMS and/or tailored discounts, and even a few freebies to help retain these customers who may otherwise flock away.

The reason why it is important to leverage your churn management software is because it is five times more expensive to attract a new customer than to simply retain one. This is why it is important for you to first address the problem of the dissatisfied customer before investing in attracting a new customer.

Practices to Avoid with a Renewal Management Software

In this blog so far, we have covered critical ground on what you can and should do with a renewal management software. It is also important for you to know what not to do so that you can learn from others’ mistakes without repeating them yourselves.

1.   Not Cutting out Unpopular Features

No one likes clutter. Especially not when it comes to a service that they are paying for since having lots of useless features takes time to sift through till you get to those select few features that you actually want. By monitoring your customer’s usage of your software, a renewal software can help you identify certain weak links in your offered package to declutter it by cutting whatever that is not pulling its weight.

2.   Not Taking Customer Feedback into Account

This is where it is optimal to also invest in a robust CRM—a customer relationship management software. Integrate your CRM with your renewal boosting software (or just licensing a software that offers both), will let you get feedback from the horse’s mouth.

No one gives a more honest and unbridled assessment of the pros and cons of your service than someone who is paying for it with their own hard-earned money. Keep sure to keep these customers in the loop – have your customer relationship management send out regular two-minute surveys – to continually improve yourself.

3.   Not Leveraging Personalization

Just like all companies are not the same, all customers too are not the same. It really helps to have your CRM personalize in its approach to the customers by having your customer care take out the time to patiently listen to each customer’s queries and, especially in the case of important customers, proactively suggest solutions to problems they might face in the future.

Bottom line

Just having the best product in the market is really not enough now. Adobe has had the best digital editing suite for a while now, and though that is great, what really sets them apart is their excellent software renewals management. Be it initially selling Photoshop for the exorbitantly high price of $600 in a one-off deal, or by understanding the subscription-heavy new trends of the rapidly digitizing world and jumping on this bandwagon by offering the same software for $10 per month, Adobe leveraged effective software renewals management to stay on top of the market.

You too can do the same with a robust renewal management software. Book a demo with SubscriptionFlow now and start maximizing the potential from each subscription renewal!