This article is the third part of the actual combat notes. This time, I will focus on sharing some practical experience in the process of completing the core KPI of renewal rate.
There is a sentence in Mr. Wu Hao's "SAAS Entrepreneurial Route": The essence of SAAS is renewal . This is the most important indicator of almost all CSM departments and even SAAS companies, and can be called the "barometer" of SAAS products.
Of course, contract renewal is a big topic, and one or two articles can't explain clearly, and can't explain the hardships of CSM, so this TOPIC will be a series, mainly including the following parts:
How to find the main factors affecting the renewal rate;
How to change the factor to improve the renewal rate;
How to set reasonable goals and incentive mechanisms;
How to recruit/train CSMs who can do renewals;
This article mainly talks about 9 key factors that affect the renewal rate, including three main dimensions: customers, products, and services. Before the main text, let me explain that it mainly refers to the proportion of customer renewals, and does not involve the amount of customer renewals. These are two concepts.
Renewal rate refers to the ratio of the number of customers actually renewed/should be renewed, emphasizing the number of customers;
The renewal rate refers to the ratio of the amount actually renewed/should be renewed by the customer, emphasizing the amount;
Why do customers also affect the renewal rate? Shouldn't the customer have to find a way to retain the customer after signing in? There is nothing wrong with this, but "choice is sometimes greater than effort." If you can't solve some problems no matter how you do it, it may be wrong at the beginning.
Element 1: The proportion of target customers
Each product has its target customers, especially in the SAAS industry, there are more and more products in vertical fields, and the functions of these products are basically tailored for a certain type of customers in this vertical field, so if you sell a If the customer "signs the wrong one" at the beginning, it is unlikely that the customer will renew the fee, and it will even lead to the increase and waste of many resources in the after-sales process, such as the training and implementation resources of the delivery team, and the service cost of the customer complaint team.
Therefore, CSM should regularly count and analyze the proportion of target customers among the current cooperative customers, and reversely promote front-end sales to sign as few or not sign non-target customers as much as possible. investment country email list of resources.
Element 2: Customer Industry Characteristics
The characteristics of the customer's industry will also objectively affect the renewal rate, especially in some emerging industries or industries with extremely fierce competition, the life cycle of the company is very short, only 1-2 years, then the customer company will close down, merge, etc. There are many. At this time, CSM can do more limited. You can consider whether to adjust and eliminate this part of users through a certain caliber during the actual operation. In addition, multi-year orders may be a good choice.