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SugarCon presentation: "Best Practices in Managing Customer Renewals"TRANSCRIPT
04/13/2023 ©2010 SugarCRM Inc. All rights reserved. 1
©2010 SugarCRM Inc. All rights reserved.
Best Practices in Managing Customer Renewals
Andy Dreisch
Christine Sharma
04/13/2023 2
Topics
Why Retention is Key
What to Measure
Boosting Retention
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The Importance of Customer Retention
Tough macroeconomic times
Competitive pressures
Increased costs of customer acquisition
Fundamental to subscriptions-based business
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The Benefits of Customer Retention
Increased profitabilityIncreasing retention by 5% can boost profits anywhere from 25% to 85% depending on industry
Reduced operations costsIt is 3 to 5 times cheaper to keep a customer than to recruit a new one
Satisfied CustomersStay loyal longerTalk favorably about the organizationPay less attention to the competitionAre less price sensitiveOffer service ideas to the organizationCost less to serve than new customers
Classifying Customer Loyal Segments
Strangers short-term/low-profit customers
Butterflies high-profit potential but tend to be short-term and disloyal
Barnacles stay around for the long-term but generate relatively low profits
True friends are both highly profitable and are long-term customers
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(Reinartz, W. and Kumar, V., 2002)
Retention and Profitability
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Why Do Customers Defect?
Price
Product
SERVICE -- Customers leave service organizations due to service reasons about 2/3 of the times (Keveaney, S.M., 1995)
Market
Technology
Organization
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Customer Retention Tactics
Set a retention goal and bake it in to corporate objectives
Segment your customer base
Build and foster trusting relationships
Build a loyal employee base
Allow for discretionary surges of effort; empower your service reps
Know when enough is enough
Focus on all-important on-ramp
Monitor, measure, improve, repeat
The All-Important On-Ramp
On-Ramp = 90 daysSubdivided: immediate post-sale, +30, +90
Waves of capabilities to secure entrenchment
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Sugar Adoption Program
On-Ramp Acceleration Optimization
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Measuring Customer Retention
By subscription
By renewal $$$
By including up-sells and cross-sells
Bookings
Monthly Recurring Revenue
Committed MRR
ACV (Annual Contract Value)
CAC (Customer Acquisition Cost)
Customer Lifecycle Value
Deep Dive on Retention
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Sugar Retention Best Practices
Baton Pass Program
JumpStarts and other PS Packages
Customer Advocacy Constant Touch Program
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Sugar Retention Best Practices
Baton Pass ProgramNew Customer Email Drip Campaign
5 emails, issued immediately post-sale and over 15 days
Informs customers of relevant content
Warm Hand-Off:Personalized outreach
Ensures excellent initial customer experience
Introduces Customer Advocate
Customer Advocate first touch (within 2 days of sale)
Support On-Boarding team activated for first 90 days
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Sugar Retention Best Practices
JumpStarts and other PS PackagesInexpensive, easily consumed, topical deliverables
Mixture of training and upgrade-safe customizations
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Sugar Retention Best Practices
JumpStarts and other PS PackagesInexpensive, easily consumed, topical deliverables
Mixture of training and upgrade-safe customizations
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Sugar Retention Best Practices
Customer Advocacy Constant TouchAccount ownership transferred immediately
First touch within 2 days of signing
No customer goes untouched in 30 days
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References
Bessemer Venture Partners Bessemer’s Top 10 Laws of Cloud Computing and SaaS (Winter 2010)
SaaS Metrics – A Guide to Measuring and Improving What Matters (http://www.forentrepreneurs.com/saas-metrics/)
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