Automating the Long-Tail Renewals

Are you neglecting the Long Tail in your Renewal Sales because it seems “too challenging” or “not profitable” to pursue? You are not alone! Many companies, with a growing number of renewal sales, concentrate most of their sales efforts on the top customers falling into the “high touch” segmentation. While this strategy is sensible as the company is expanding, as new sales and the cost of acquiring new customers rise, it’s time to shift focus to the installed base. The obvious answer is to decrease churn and increase lifetime customer value through upsell promotions, customer success programs, and other high-touch sales motions.

If your sales efforts are missing your Long Tail customers, you risk more than just missed revenue, as outlined in this Blog, Low-Dollar Renewals: The Real Cost of Losing. How do you engage this large segment of your customers generating a small but consequential fraction of the revenue in a profitable, programmatic sales plan? Use automation in your sales engagement plan! What if you could increase your Renewal Rates by 10%-20% without adding any headcount or additional burdens to your sales or resellers?

• Determine what constitutes your “Long Tail.” For some, it’s as simple as segmenting customers whose annual contract value falls below 20% of the mean. For others, it may involve an examination of Customer Lifetime Value and costs associated with servicing that customer in a “high touch,” people-intensive sales and customer success plan.
• List the stages for the customer’s journey. In a Recurring Revenue and Renewal Sales motion, there are at least four stages: Land, Adopt, Expand, Renew, sometimes referred to as the LAER model.
• List the desired activities in the Expand and Renew stages. In a High Touch Model, there is usually a quarterly meeting with the customer where new products or services are introduced.
  • If the customer is using the current product at its capacity, suggest more licenses or upsell SKUs.
  • If a product is coming to the end of its life, propose a technical refresh.
  • For some customers, the Renew stage may involve creating a Renewal quote and presenting it to the customer’s proper buying authority.
• Create a plan to automate the same sales motions employed for your “High Touch” customers and deliver actual quotes to the customers.
  • Expand capacity using a quote that has 10% more than the prior year, in addition to the current capacity quote.
  • For SKUs that are End of Life/Service, offer a quote with the appropriate replacement SKUs.
  • For simple renewals, create an accurate quote, deliver it to the proper person, and automate the processing, escalation, or re-routing of the quote as needed by the recipient.

• Use Installed Base or Entitlement data from a CRM or ERP system and current price lists. SKUs, Contract Begin/End dates, Customer Name/contact info are the minimum details.
• For sales through a distribution channel, collect incumbent Distributor and Reseller contact details. If reseller partners retain some customer details, the data can be collected in the automation.
• For Upsell offers, use telemetry data to determine additional SKUs required or suggest growth or an extended contract promotion in addition to the renewal quote.
• For End of Service SKUs, create two quotes—one that expires short of the end of service and an additional quote mapping the suggested replacement SKUs.

• Begin automated renewal notifications 90-120 days prior to expiration.
• Decide if automated notifications will be sent directly to end customers and/or through the incumbent Reseller. Notifications including actual quotes from a Reseller are more likely to close on time and can be automatically created and delivered to the customer, even in a two-tier Distribution model.
• Create an Escalation Plan for Renewals that are inactive. Proper automation should include visibility into the progress of the automated sales, including through distribution and to the customer. Often, quotes languish due to inaccurate delivery data. The automation platform should detect and attempt to correct the data, increasing Renewal Rates for those customers in the following years.

Creating, implementing, and overseeing an automated process to handle recurring sales in your company’s long tail is now more straightforward with platforms such as Yagna’s Renewal Cloud. Whether the Renewal Cloud is established and supervised by your internal renewal sales team or outsourced to Yagna’s Customer Success team, there are now viable options to cater to your Long Tail Customers without escalating costs, placing additional burdens on your sales teams, and eliminating friction from the channel partners.

For more information or a free trial of Renewal Cloud, contact Yagna at sales@yagnaiq.com or visit www.YagnaiQ.com