How do you ensure a great customer experience when it comes to renewals?
In our previous article we discussed the importance of a good renewals process and its impact on customer retention rates.
In our previous article we discussed the importance of a good renewals process and its impact on customer retention rates. There are a number of approaches to driving good CX including data, technology and communications. In this article, we’ll be expanding on 3 key things you should consider before implementing any changes in the business.
Firstly, it's important to ensure that all staff have a good level of awareness and understanding of the value of renewals for both the customer and the business. Start by asking yourself questions such as: Why should your customers renew with you, and what value does this bring to your customers? How does your customer’s renewal align with your overall strategy? Collectively answering these key questions and ensuring that your staff, especially those who are customer facing, are on board with this will be the first step to securing success in any changes you make.
The next step to providing a great customer experience is to understand who your customers are. According to a CX study by Gartner, customer analytics appeared as the number one technology investment employed to provide excellent CX for organizations. This highlights the importance of looking at who your customers are, taking into consideration how they are alike but also how they differ from one another. Remember, not all your customers will be the same - nor will their experience be.
There are a few ways of addressing the differences in your audience. These are::
Segment your customers - Segmenting your customer base will help you to understand where you should prioritise efforts on improving the renewals process. For example, if you want to target higher retention rates amongst larger businesses, this could involve assigning a dedicated account manager to maintain regular contact and ensure their needs are being met.
To segment your customer base, start to look at different patterns: Is there a purchasing pattern between groups of customers? For example, is there a group of customers that purchase high value products but renew less frequently?
The infographic below offers some more ideas of ways in which you could segment your customer base, keeping renewals as the focus point:
Analyse metrics for success - The two key CX metrics are your Customer Satisfaction scores (CSAT) and Net Promoter Scores (% of customers likely to make a positive recommendation). These metrics will help you to understand how your customers feel, which will ultimately impact their decision to renew. In 2018, ProfitWell carried out a study of 2,000 subscription-based businesses and found that “companies in the upper quartile of NPS drove 5% to 10% higher retention with approximately half as much churn and considerably more expansion revenue”. In comparison, the remaining had little or no difference in their retention rates.
Map out your customer journeys - To fully understand a customer’s experience, put yourself in their shoes and deconstruct the various parts of the experience. Mapping out a customer’s journey can help identify what works well, what doesn’t work well; potential drop-off points in the renewal process, the biggest pain points, and key decision-making stages that they might encounter. Use insights from the aforementioned metrics too; these will help you to understand which touchpoints are the biggest cause for concern and where optimisation efforts need to be focused.
Enrich your customer journey maps with further insights - A particular consideration for B2C businesses should be examining the funnel on your existing platforms. How many customers reach a renewal page but don’t end up renewing? Why could this be? Capturing the factors impacting your customer’s propensity to renew (e.g. number of support cases opened, level of engagement, or price perception…) will help answer these questions and further enrich your understanding of your customer’s behaviours.
Customer analytics are a powerful tool. Direct customer feedback (qualitative & quantitative) is just as important and will validate your data. Utilising all the insights that your customers provide you with will allow you to deliver a more personalised renewals experience for your customer, and a smoother customer journey overall.
The final task to prepare for potential changes is to analyse your current process, and assess your infrastructure and governance around renewals. Those closest to the customers (account managers, customer service support etc.) will have good insights on the current process so they’ll be best-placed to offer information and advice. It’s also worth looking into any themes that arise from other parts of the business, such as your operational or finance teams. Combine these insights with the customer journey maps to develop a holistic, as-is view of your renewals process.
This information gathering stage may feel extensive but think about it in context of the customer’s lifetime value; in the long-term, these activities will help to convert customers who might be loss making (when just acquired) to loyal customers with an improved customer lifetime value. So, you’ve collected all the insights - what comes next? In our final blog of this three-part series, we will be discussing how you can channel all of your new insights into improvements with the aid of technology and communications, to enable you to offer a better customer experience.
To find out more about renewals, check out our earlier blogs in this series: