The first rule of subscriptions is don’t forget to automate renewals
Any company that sells a subscription – whether it’s Software as a Service (SaaS) or a licence or even a physical product – has a challenge from the moment that the original contract is in place. How are you going to convert this sale into multiplying revenue by ensuring it gets renewed? It might be a year or more before the term or licence expires, and companies may have multiple contracts for different services with end dates all over the place.
Despite that obvious complexity, there are still otherwise sophisticated providers who are still trying to keep on top of renewals in a way that, frankly, isn’t much better than spreadsheets or even index cards. Sure, they create reminders, but they’re in Outlook or perhaps tasks in their Salesforce systems.
It’s so clear that they need automation in this critical part of their business. Think of the CPQ tool as an all-knowing Energizer Bunny in the background, checking, watching, waiting and alerting your sales team. Once CPQ is implemented, it ensures that every single renewal opportunity is not only being chased in good time, but that value is being added and the risk of lost revenue is a threat that focuses every sales-driven mind, but never a reality.
With Salesforce CPQ, as soon as you sell the subscription it takes the end date of the contract and automatically creates it as an opportunity. You can configure it for how long before the term expires you need to get reminded to follow up for the next contract.
CPQ doesn’t just manage subscriptions – it nurtures renewals
For a complicated product or licence, you might decide that you want the CPQ tool to remind you 90 days before expiry. That allows you to proactively start working with your customer on the terms of the renewal.
CPQ automatically holds everything that you sold the last time, and now it can apply any percentage uplift or discount that your company might apply to a renewal – whatever rules you want to apply.
Without your sales team having to hunt around, CPQ gives you the accurate details of what was quoted and sold last time, and from that starting point you can increase the price, the number of licences or services, or decrease or change in some other way. The point is, it eliminates so much work because all the details you need for the renewal are right there.
The other thing CPQ is on hand to avoid is the dreaded outcome of a missed renewal offer turning into a lost contract. For example, you might have a customer who’s not been using the particular software all that often, so they don’t even realise when their term expires and by the time you come and proffer your renewal offer, you’ve got a hard road ahead to get them signed back on.
At a time of your choosing, CPQ will remind you before a term expires, enabling you to review their usage. This leads to old-fashioned customer service that can save the contract. You might get in touch to point out a feature that you think the customer could be using, point them to a webinar or even offer them some free training. They see the value in the software and they’re not at risk (and at any rate, CPQ is going to ensure they get their renewal offer ahead of expiry).
This is a great example of automation that’s driving both superior customer service as well as sales-team safety net, saving you from the possibility of lost revenue.
In the next article in this series, I’ll talk about how CPQ turns quotes and amendments from a pain point into a revenue raiser, with automation making it exponentially faster and more accurate.
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