Tag Archives: maintenance renewals

Renewal Revenue 4 Ways to Fail

According to Morgan Stanley, 30-40% of the revenue and over 50% of technology company profits come from recurring revenue- and that number is even higher for SaaS/XaaS organizations. From 2012-2014 “cloud billing” will grow by about 35%

Given it’s importance, one would expect that companies depending on recurring revenue would have that re-sell process firmly in hand. But if, like this writer, you have recently fielded a call from a supplier’s customer service or even billing department, awkwardly attempting to secure your contract renewal, its pretty obvious that this process is often very poorly managed.

There are so many ways to make a mess of this sales opportunity it was hard to pick my top four, but here they are:

4 Ways to Absolutely Suck at Making More Money on Renewals

1- Leave it in the hands of customer service, accounting or email campaigns.  We want renewal revenue to be as simple as just paying another bill- and so we get lazy. But making the most of your recurring revenue opportunities is a sales job.  Your salse reps know that not getting  a “NO” is not the same as getting to “YES”. You need to close those renewals.  And even more important?  You need to upsell, cross sell and prospect those customers for new opportunities and referrals.

And don’t think that the 27 emails you sent with the billing reminders are doing you all that much good.  Sorry to mention it but most of the emails you send to your customers will go unread. How else can you possibly explain that the number one reason cited by non-renewing customers is that “no one contacted me” which is absolute idiocy.

2- Use the wrong measurements to evaluate your performance.  There are distinct stages in the process that give you recurring revenue and you will never be able to manage or grow this foot-in-the-door income opportunity until you can measure the the performance of your organization and your sales effort against some meaningful benchmarks.  A simple year over year number might be good to look at but it’s doing absolutely nothing diagnostically to help.

You need your decision rate, which will tell you how many and what percentage of your customers acknowledged your efforts to renew their agreement and gave you any answer.  You need to know your churn stats and how your  sales team is performing relative to:

  • actually closing the people who didn’t say “get lost”
  • upselling and cross selling  (what and to which types of product/service)
  • uncovering new opportunities and referrals

And you need to see your overall performance vs YAG

3-Wait too long to get the show on the road

The decision as to whether or not to renew your offering will depend on a lot of things, the most important of which being- “Did the customer perceive that they experienced the benefit they bought you for?”  This is not only affected by the realities of adoption rates and usage, but also by not letting those new benefits and advantages slip out of mind and out of sight.  Ignoring these factors all year long and only establishing contact 60 or even 30 days out from the renewal, perhaps even then with nothing more than an annual bill, will send your revenue performance on a steep, downhill slide.

4- Use your sales team the wrong way.  They’re called your sales team, not your “calling to touch base and made sure you saw our invoice” team.  Nor are they your “calling to make sure you saw our latest webinar about the new release features”  or even your “calling to wish you Happy Birthday” team.  (although these calls are not a bad idea when you decide that you want the relationship to be owned by sales.  They are your SALES team.

Their job is to take the companies who are interested in renewing their agreements with you and close them down.  They are supposed to cross sell associated services or products that are a good fit for their needs.  They are supposed to make this year’s sales bigger and better than last year, which means go for the upsell.

Companies love recurring because its so profitable. Maybe the problem is that it’s a little too profitable because we just aren’t working either hard or smart enough to really take advantage of one of the few growing business opportunities.





Case Study – Solving a Small Account Renewal Challenge


A North American security software developer, selling to business organizations of all sizes, was concerned about the low rate of maintenance agreement renewals from its base of smaller customers (under 50 seats).  Because they already knew that a call from the sales reps at 90, 60 and if necessary 30 days, was the major contributor to the better renewal rate among larger accounts, the sales force was mandated to begin calling on the smaller customers as well in exchange for a commission on the sale which had not been paid in the past.

Challenge– It proved to be a bad plan for a number of reasons.

  • Unlike the large accounts, records for the smaller customers were inconsistent and required a combination of different contact methods to reach them.
  • The sales team was not large enough to make all the necessary calls with voicemail and email follow ups to the full base of smaller accounts and so began to cherry pick the easier call backs to gain extra commissions.
  • While renewals increased, the smaller invoices offered a poor ROI relative to the cost of sale.
  • The time consuming calls generated short term renewal sales, but at the expense of more difficult new account development. Additionally, the calling for larger account renewals was becoming inconsistent.

Alternatives  – Considered and rejected

  • High end outsourced telemarketers could manage the different types of contact needed but were more expensive than the in-house resources. Low end outsourced service providers were affordable, but lacked the management support to deal with the many different messaging alternatives needed to reach the accounts with any significant penetration.
  • Email only reminders provided some lift and a positive ROI, but used alone the overall impact was insignificant.
  • Increasing the telesales/telemarketing group was not cost effective.
  • Status quo was not acceptable, given the potential revenue.

The Solution

A fluid combination of services from Boxpilot was used to reach this market and renew the agreements.  Three unique voicemail messages were pre-recorded by the actual sales rep for the account and delivered at 90, 60 and if necessary 30 days prior to the renewal date.  The first message was delivered using the guided voicemail service.  For some companies, after the contact and direct dial information was verified on the first call, the 60 and 30 day messages were delivered using Boxpilot’s auto-guided service as a cost savings measure.

Each delivered message was followed up with a synchronized email – again from the individual sales rep. The emails offered additional information and an easy method to respond directly to their sales rep representative.  Boxpilot’s Live Message service was used for the segment of the list without fully developed voicemail systems and in cases where the desired contact actually answered the phone.


Using the combination of four delivery methods and campaign management services from Boxpilot – Guided Voicemail, Synchronized email, Auto-Guided Voicemail and Live Message – the renewal rates of the test group were 18% higher than the control and the cost-per-sale was well within acceptable limits.

Improving Cash Flow With Earlier Renewals


Background – A major software organization was looking to reduce the lag time on service renewals and improve cash flow. It was decided to include maintenance renewals as part of the sales team’s responsibilities.  An email program, with messages going out in each reps name was undertaken and the sales reps were also charged with calling customers to remind them to renew on time.

Challenge – The sales team was not making enough calls to have a noticeable impact on renewals and the emails were not driving enough responses.


  • Increasing the number of emails was rejected due to concerns with over saturating the customer base with emails, since this was also the preferred communication tool for others groups within the company.
  • Penalizing the sales team for not meeting a renewal calling quota was rejected as maintenance renewals were a lower priority than new software sales – their main mandate.
  • Shifting the calling to an inside sales team was rejected since the team was too small to meet the volume and not trained to deliver outbound calls.
  • Outsourced telemarketing/telesales was rejected due to the high cost to contract enough callers to contact the large lists in a short time period.

Solution – The Company contracted Boxpilot to execute an outbound voicemail program

. The messages not only altered customers to the renewal emails to be send within one day of the campaign, they also drove responses to the inbound call center which was well equipped to manage the inbound renewal requests.  Boxpilot was selected because:

  • Having the sales reps record messages to their own client base supported renewals and an improved relationship with the reps.
  • The guaranteed delivery timing allowed the voicemails to support the emails and increase the email responses as well as inbound phone
  • Guided voicemail was considerably more cost effective than adding or outsourcing outbound telemarketing
  • The large customer base could be completely covered by voicemail over 1-2 day campaigns.
  • The delivery speed and low cost allowed for multiple voicemails to support responses.

Results– Within 60 days, inbound requests for maintenance renewals increased from 500 to 1200/month.  This volume was sustained as long as the voicemail campaigns ran.  Over the period of the program the cash flow lag time decreased from -60 days to -50 days.