The Toronto Customer Success Executive Breakfast is a forum whereby industry leaders meet to discuss the still young and rapidly evolving field of Customer Success.
Organized by DesiredPath, senior executives in the field of Customer Success are invited to share their knowledge and expertise amongst their peer group in an intimate and highly interactive setting.
The pandemic is amplifying the importance of keeping customers and, as such, executives are placing a concerted effort on customer retention, expansion and scaling their teams to do so accordingly.
Renewal strategies was therefore the chosen topic of discussion.
Prior to the call, the group of senior leaders were asked to participate in a survey to find out how they are structured to drive customer loyalty and revenue growth from the customer base, and then come prepared to discuss their challenges and what’s been working for their organizations.
Forecast visibility, visibility into customer usage data, renewal process/playbook, multi-year renewals and employee enablement were both top challenges in managing renewals as well as what’s working best about renewal processes.
Those that have made significant strides in improving customer retention attribute starting the renewal conversation with customers earlier, improved renewal process and investments in employee training as the reasons for increased revenue growth.
Aligning targets and compensation plans, as well as providing CSMs with greater visibility into their accounts, allows for improved forecasting and execution.
Highlights of the survey results include:
83% have the CX department owning renewals.
92% have CSM as the role that owns the renewal.
For teams with a variable component of compensation, the typical percentage of base salary that the variable component reflects is 0-10% (42% of respondents) followed by 11-15% (25% of respondents).
Net retention is the biggest contributor to the variable component for the CSM.
92% use ARR as the primary revenue model.
58% work with annual contract lengths, 33% have multi-year contracts with customers.
The average ARR per renewal was fairly evenly split with 25% between $16-$25k, 25% between $51-$100k, 25% between $1010-$200k, 17% between $26-$50k and the remaining 8% have $15k or under.
CSMs average book of business is $1-$1.5M (42% of respondents) followed by $3-$5M (25% of respondents).
70% have unique targets per segment.
50% begin renewal conversations 90 days before renewal, 42% start 120 days out and 8% start 6 months out internally.
Customer goal-based calls, automated billing reminders and commercial calls were the top 3 steps employed during renewal.
58% of the group have between 81-100% of their renewals closed prior to end date of current agreement.
Half of the group see 26-60% of their renewals include expansion while 33% see 61-80% of the renewals with expansion.
The majority of the group (75%) are focused on increasing contracts signed with multi-year terms.
A full copy of the Renewal Strategies survey results can be downloaded here:
How is your organization setup for renewals? Do you or your organization have a winning renewal strategy that you’d like to share? Contact me at kia@thedesiredpath.com to share your story or if you are interested in joining the group.