A finance leader’s blueprint for driving customer renewals
The economy’s shift to services and subscription renewals has led finance leaders to think beyond day-to-day tasks and closing the books. They now must play an active role in keeping customers satisfaction and retention. The concept that customers are only one unpleasant experience away from turning to the competition has never been more true. What can you do in both the near and long-term to drive customer renewals and ultimately profitability? Below are four things you might want to prioritize.
1. Focus on customer experience
Renewals are important. As CFO or finance leader, get closer to every post-sales function of customer onboarding, service delivery, support, and customer success. In addition, you need comprehensive views into the “whole account” with high levels of insight into customer behavior, service quality, and product quality so the smartest decisions can be made to meet their needs.
What stage of the customer experience is most critical to track? Immediately post-sale, when a positive customer experience sets the stage for every future interaction. Did the implementation go smoothly? Have they called support? Have they paid? Are they happy with the product? If anything looks amiss, you can quickly suggest and implement responses to course correct.
2. Get predictive about customer data
The cost of acquiring a new customer is typically five times greater than the cost of retaining existing ones. And a mere 5% increase in customer retention spend can increase a company’s profitability by up to 95%. Increasingly, finance leaders are focusing on key customer success metrics: Time-to-value, product adoption rates, project status, usage rates, and service call patterns can all help predict future rates of renewal, churn, and expansion. Additionally, know your customer’s lifetime value (CLV) and corresponding customer acquisition costs (CAC) so you can make immediate business adjustments as needed.
This is a lot to keep track of, but technology makes it easier every year. Augmenting your efforts with artificial intelligence (AI) will help you more quickly and accurately process your customer data so you can make timely predictions based on patterns of customer behavior, not just historical hunches. Don’t wait for the monthly close or a quarterly review to make game-changing decisions for your business. Know in real-time when to capitalize on product upgrades or cross-sells, which regions to focus on, or which customers need proactive outreach to prevent them from churning. You can also more easily estimate the costs involved in developing and delivering new offerings, maximizing for customer satisfaction and profitability.
3. Harmonize billing for customer retention
Your company’s credibility, which took so long to build during the marketing and sales cycle, can disappear the second a billing error occurs. Manual entry, inflexibility, and lagging payments can turn customer wins into bitter losses. To avoid discrepancies or cumbersome steps that don’t make sense for your customers, ensure that you have flexible billing systems and processes that support your various revenue streams. Offer a seamless billing experience from the time an opportunity closes all the way to billing, payment, renewal, and revenue recognition
4. Create the master customer record
A truly customer-centric CFO will implement a financial system that connects all back-office functions and data (ERP) to the front office (CRM) to produce one master customer record. With a single record, you get a single, seamless experience from customer acquisition, quoting, and contracts to internal financial operations and fulfillment. Every conversation, every transaction, every quote, every request, and every documented customer interaction will be accessible from one place. Not only does this empower customer-facing staff to provide immediate, high-quality support, but it also grants financial leaders a wealth of data with which to develop strategic insight into pricing adjustments, contract amendments, and service delivery tracking – all with the end goal of customer satisfaction and retention.
All of this won’t happen overnight. It will require careful consideration of the new markets, access to data you may have not looked for before, and evaluation of your financial systems to ensure they’re equipped to support your efforts. But there is help. Contact us to learn more about how CFOs can achieve success in the new services economy.