Subscription service contract renewals for cloud & communications

Subscription service contract renewals (and generally, revenue lifecycle management) are an essential part of Quote-to-Cash.

Effective processing of service renewals is key to reducing churn, keeping recurring revenue under contract and ultimately, drives higher customer lifetime value (LTV).

Many providers take a passive approach to contract renewals, often relying on “evergreen” clauses (such as auto renewals equal to initial service term). However, a proactive approach to contract renewals may result in substantial benefits such as:

• Increased renewal success rate — customers are not left on their own and surprised with renewals (“evergreen” renewals are commonly disputed).
• Decreased churn — customers can negotiate a better deal; providers can lock them in for a longer term.
• Reduced month-to-month revenue — protects the top line long-term and increases revenue under contract, leading to a healthier business.
• Increased customer-satisfaction — renewal discussions are an excellent opportunity to listen to customers and increase CSAT (Customer Satisfaction Score) as well as discover up-sell and cross-sell opportunities.

While all the above sound straightforward, providing account management and customer success teams with tools and technology to effectively execute contract renewals can be challenging.

While there are many CRM / CPQ tools on the market, they typically focus on new product sales rather than renewals and customer retention.

Nextian Quote-to-Cash is different in that regard: it supports full service/contract lifecycle from new service sales, through delivery, changes (including re-terms and re-rates) all the way to cancellations.

Nextian contract management and renewals live within the Sales Cloud Salesforce CRM reducing user learning curve and ensuring that all renewal information is captured in the CRM.

Subscription service contract renewals tracking

A robust contract management with accurate term tracking and automated renewal processing (both for evergreen and month-to-month renewals) is a cornerstone of an effective renewal process.

Nextian provides end-to-end contract lifecycle management where:

• Term & renewal information is tracked individually for each service; however, multiple services can be co-termed to have the same term start date via the re-term process.
• Current and historical term information is separate from service start and end dates — this enables easy handling of auto-renewals, re-terms and other adjustments.
• Evergreen contracts are renewed automatically in the background, without user intervention.
• Metrics such as Days till end of term are updated daily and are readily available to be used in Salesforce list views and reports.

Subscription service contract renewal reporting

Once accurate term and renewal tracking is in place, Salesforce list views and reports can be easily used to answer business questions like:

• How much monthly recurring revenue (MRR) is under contract vs. month-to-month?
• How much MRR is turning month-to-month over the next 12 months?
• What is the general distribution of month-to-month vs. evergreen contracts?
• Which products tend to be on month-to-month contracts (customers are not willing to re-term them)?
• And others.

Nextian Salesforce package includes prebuilt set of dashboards, reports and list views (month-to-month services, accounts with month-to-month services, services turning month-to-month in the next 30 days, revenue under contract, etc.) that can be further copied and customized.

One-click subscription contract renewal quote creation

The ability to report which services are coming to the end of term is only a steppingstone to implementing an effective (i.e., with a high success rate) and efficient (i.e., as low-touch as possible) renewal process.

An ideal renewal process should look as follows:

Renewal Identification → Quote Creation → Negotiations & Customer Acceptance → Contract and Billing Update

and involve as much automation as possible.

Nextian CPQ supports Re-Term/Re-Rate as a quote line item type. A boilerplate “as-is” renewal quote can be created with a single click. The quote can be approved internally, converted into a PDF and sent for electronic signature exactly the same way as a new product quote would.

This process brings the following benefits to the table:

• Ability to adjust quote to meet customer needs to increase renewal success rate and CSAT.
• Ability to present up-sell and cross sell options on a quote.
• Opportunity for proactive customer communication.
• Easily report and analyze renewal win / success rate (the standard CRM opportunity/quote process is used).
• Full history tracking on service and account in the CRM.

Enabling self-service contract renewals with Customer Portal

Service renewal information can be shown (depending on configuration) in the Nextian Customer Portal along with proposed renewal quotes. These quotes can be accepted by customers without electronic signature and immediately turn into orders as follows:

1. The system creates a renewal opportunity for each service reaching month-to-month.
2. A quote is generated automatically.
3. The quote is made available to the customer via the portal.
4. Customer accepts the quote.
5. Quote is immediately turned into order and submitted for processing (for “as-is” renewals this process can be fully automated).

This can significantly reduce processing overhead and is especially useful for low $ amount “as-is” renewals.

Summary

Nextian is a vendor of Quote-to-Cash (QTC) software for cloud and communications helping providers accelerate growth and increase customer lifetime value.

Our service management software runs on top of Salesforce CRM enabling accurate contract management and automated renewals for cloud and communications subscription services leading to:

• Increased renewal success rate
• Decreased churn
• Reduced month-to-month revenue
• Increased customer-satisfaction

Contact us today to find out how we can help your business grow!