Insights In Hindsight - Edition 14

The Critical Impact of Renewal Specialists in Driving Profits and Revenue Growth

In today's dynamic business arena, sustained revenue growth is an organizational imperative. Amid fierce competition and evolving consumer demands, renewal specialists have become pivotal in maintaining revenue consistency. In this context, I think, the multifaceted role of these specialists deserves greater recognition for its potential to elevate profits, enhance customer retention, maximize customer lifetime value, and facilitate effective cross-selling and upselling. 

So, Who Are Renewal Specialists? 

They are the ones who navigate the delicate balance between retaining existing clients and acquiring new ones. Their primary focus is on understanding nuanced client needs, tailoring solutions for ongoing satisfaction, and fostering lasting partnerships. Also known as “Customer Success Managers,” “Retention Specialists,” or “Client Success Managers,” these professionals require the ability to understand complex client landscapes, anticipate the customers’ needs, and provide solutions beyond mere transactions. Their role extends beyond closing deals, emphasizing continued client satisfaction and partnership. 

But Can’t Sales Do This?

Well, that depends. It boils down to the distinctive skill set of renewal specialists — a blend of sales expertise and a profound grasp of customer relationships. Imagine, if new sales teams were like a cricket team selection committee, scouting for talent and introducing new players to the squad, renewal specialists would be more akin to the captains, leading and maximizing the potential of existing players for consistent team success. Well-known in SaaS organizations, the Land, Adopt, Expand, Renew (LAER) framework spells out key roles within the customer engagement journey. Sales teams land the customer, performing a “hunting” role, customer success managers assist in technology adoption, and renewal specialists perform a “farming” sort of role, running point on renewals, as well as finding opportunities for upsell and cross-sell, along with other service delivery teams.

Leveraging Renewal Specialists

Amidst unprecedented challenges and intricate growth strategies, harnessing the role of renewal specialists can potentially impact diverse business success factors.

Renewal Rate: Customer retention is pivotal for sustained profitability. For example, when software giant Adobe transitioned from boxed software to a cloud subscription model in 2013, they strategically leveraged renewal specialists to educate customers on the benefits of subscription-based services. This resulted in improved customer retention, with Adobe's subscription offerings contributing to 92% of their revenues and boasting nearly 30 million Creative Cloud subscribers by 2022.

Cross-Selling and Upselling: While building and deepening relationships with customers, renewal specialists are uniquely positioned to identify opportunities for cross-selling and upselling. For example, Oracle's dedicated renewals management team has repeatedly demonstrated its ability to increase the average contract value through strategic upsells and cross-sells, maintaining high renewal rates and substantially augmented revenue. Many banks and financial services conglomerates, such as ICICI, HDFC, or Kotak also successfully employ customer success managers or renewal specialists to identify opportunities for proposing diverse financial products (insurance, loans, MFs, credit cards), as well as upgraded services to existing customers across their group companies.

Customer Lifetime Value (CLV): Studies have shown that a 5% increase in customer retention rate can boost profitability by 75%. Moreover, existing customers are likely to spend 67% more than new customers, which means when renewal specialists achieve higher customer retention, they automatically drive up the CLV and profitability of the business. In the IT industry, there is no dearth of examples. Whether it is Oracle, Salesforce, HubSpot, IBM, Cisco, or Microsoft, every organization invests in and leverages its renewal management team to build meaningful customers, deepen opportunities for cross-sell and upsell, as well as identify customers at risk of churn and proactively address issues to boost customer satisfaction and secure renewals. But even if you look across other sectors, there are many success stories.  For example, all large automotive dealers have a dedicated team focusing on customer relationship management, offering loyalty programs, and facilitating the renewal of service plans and extended warranties to enhance customer retention. The same is the case with banks, insurance, telecommunication, fitness centers, and many other types of businesses.  One of India’s biggest success stories is telecom market disruptor, Jio, which is known for acquiring new customers aggressively. However, their focus on affordable plans, data-driven insights, and customer engagement strategies contributes to high customer retention and renewal rates in a highly competitive industry.

Investing in the Growth and Development of Renewal Specialists

In the era of big data, renewal specialists need to learn how to harness the power of information to make informed decisions. Organizations should also look at avenues to ensure that renewal specialists remain abreast of the latest developments in their business and sector, while continuously honing their customer relationship management skills. Amidst our ever-competitive terrain, investing in and supporting renewal specialists is crucial to unlocking the full potential of sustainable and profitable revenue growth. 

#renewalspecialists #customersuccessmanagers #profitablerevenuegrowth #maximisingCLV #customerretention

Snippets of Articles That May Interest You        

How to Reduce Dependency on Founding Teams in Growing Organizations

Severe founder dependence is not healthy for any business. Not only is it a huge dissuading factor for potential buyers or investors (if that is part of your plan), but it could also come in the way of succession plans, talent growth, customer relationships, risk and governance aspects, and other areas of business. Read on for my take on how high-growth start-ups could proactively address founding team dependence for ensuring long-term business continuity and success.

#founderdependence #foundingteam #startupecosystem #deriskfoundingteamdependence #delegation

Seizing the Next Decade: It’s about Running the Race before Winning the Race

For most organizations across size, sector, and geography, the next decade is going to be about running two different types of races. The first two to three years will be a sprint for overcoming the short-term challenges related to economic slowdown, rising inflation, geopolitical conflicts, and still-disrupted global supply chains. The next several years will be like running a marathon with many visible, as well as unforeseen challenges. How are you shaping your organization's growth plans to seize the next decade? Read on 

#thenextdecade #organizationgrowthplans #embracingtechnology #sustainability #organizationalefficiency

Updates from Practus        

The fourth episode of Bizdom is live!

It is said that “deep conversations with the right people are priceless” and I could not agree more! When you listen in to this episode of Bizdom with @Jeby Cherian, you would agree with me too. An expert in business growth, strategy and analytics, systems integration, data management, and much more, Jeby is a leader with a wonderfully empowering entrepreneurial spirit.

Listen here: https://linktr.ee/bizdom. This is the first of a two-part series.

#Bizdom #WisdomFromBizdom #wisdom #business #knowledge #technology #businessgrowth #strategy #analytics #systemsintegration #datamanagement #retail

Recently, I spoke to The BizzBuzz about the dynamic consulting landscape that is being driven by transformative technologies.

I also focused on industry intricacies, underscoring the vital requirement for ongoing upskilling and reskilling to adeptly navigate the challenges and trends shaping the field.

Here's the article: https://lnkd.in/guD5ZvP5

Organizations must navigate the ever-evolving demands of today's dynamic business landscape and find ways to continuously optimize their operations. And that is something I had a conversation about with Lavanya Iyengar of ET Edge Insights.

Here's more

That's all for this month! See you all next month!