Subscription management is an essential tool for business leaders who are cashing in today’s subscription economy. A B2B subscription strategy is critical in ensuring increased revenue over the long term.
Your existing subscribers are perhaps your most precious resource – and the least expensive source of profits. Acquiring new customers is exponentially more costly. According to Frederick Reicheld, creator of the Net Promoter Score, “Return customers tend to buy more from a company over time. As they do, your operating costs to serve them decline.” To illustrate, a 5% increase in customer retention for a financial services firm could result in a greater than 25% increase in profits from those customers.
Maximizing customer contract renewals is the key to growing revenue for a subscription-based business. Developing a solid strategy for subscription management and growing the number of active subscribers should be the sales division’s top priority.
To achieve that goal, we’ll share 5 important ways you can increase subscription renewals that drive revenue to new heights.
1. Automate Subscription Renewal with Dynamics 365 Sales
Automating renewal opportunities is a vital part of a good subscription strategy, as it reduces friction, making it easier and less time-consuming, while also reducing errors from manual entry. Automating those processes within your CRM solution, such as Dynamics 365 for Sales, can be extended to upselling, cross-selling, bundling, and co-terming, reducing the administrative legwork and enabling any CRM user to process customer renewals.
2. Optimize Upsells, Cross-sells, and Bundles using Dynamics 365 Sales
According to a Gartner study, 20% of your current customers will produce up to 80% of your future revenue. Thus, it is important to seize every opportunity to upsell, cross-sell, and bundle products in order to increase subscription revenue.
Gaining insights from your customer, sales, and product data will help you identify such opportunities with precision. DealHub CPQ helps you achieve that goal by collecting data through the entire process and preparing a sales playbook that prompts your salespeople when to upsell, cross-sell, and bundle products automatically, based on intelligence gathered from deal data. This puts the power to sell in the hands of everyone on your team, from sales professionals to account managers and even customer success managers, making it fast, simple, and free of errors.
3. How to use Dynamics 365 Sales to Offer Incentives to Renew
Giving an incentive can provide more value for the customer, as well as create a sense of urgency that will motivate them to renew sooner. Incentives are a useful tool for sales professionals to close more deals in less time while fostering long-term customer relationships – key factors in increasing the renewal rate.
What sort of incentives could you offer your customers?
Provide a discounted monthly or yearly rate, or a promotion (such as one month free) for those who renew ahead of time.
Offer special renewal pricing to those who haven’t renewed or who are at risk of churning
Offer flexible billing – for example, monthly payments for an annual subscription
Provide a reduced rate for customers who choose to renew for a longer subscription term
While these are effective methods to retain customers, ideally you don’t want to give something away to everyone. There are other, equally successful paths to customer retention.
4. Dynamics 365 Sales can Identify Churn Candidates
While brand and product satisfaction are strong drivers of subscription renewals, you’ll want to give attention to those who are on the fence to keep them in the fold. This includes, not just those who have experienced problems, but also those who have slowed down or stopped using your product.
Examine customer health to minimize the churn rate. Customer feedback, reviews, and support tickets can give you valuable insights into customer satisfaction. Forbes even suggests using “machine learning technology to crunch data to determine which customers are most likely to leave, and target the ones at the top of the list with new offers, sales, or promotions.” What is more, if the customer feels their feedback is taken into consideration, they may have renewed confidence in your product and be more likely to renew.
5. Keep the Lines of Communication Open with Dynamics 365 Sales Tools
Customers who are dissatisfied with your product or service are not likely to value it more over time without your help. And if they don’t value it, they won’t renew.
Invite your clients to communicate with you and share their experiences with your product and brand. This can be accomplished through a variety of channels, including surveys or even chatbots. According to HBR, “The key to any successful relationship is effective communication. In the business world, this means trying to understand what consumers and clients are saying, and responding to them in ways that reflect that understanding.”
MMaintaining proactive communication with your customers tells them that you appreciate their business, you want to help them get the most value from their subscription, and that you’re striving to improve. Those sentiments drive renewals.
Increase Renewal Revenue with DealHub Subscription Management For Dynamics 365
DealHub delivers one fluid revenue motion, helping SMB and enterprise companies increase their subscription renewals and resulting revenue. Our Revenue Platform provides the tools needed to streamline the quote-to-revenue process and deliver value-added and engaging B2B customer experiences.
Our solution brings consistency and accuracy to your sales process, empowering you to shorten the sales cycle, close more deals, and drive revenue higher. Link quoting with subscription management to automate contracts, subscriptions, renewals, recurring payments, upselling, cross-selling, co-terming, and more. Eliminate the bottlenecks in billing and invoicing while gathering valuable insights from the customer journey to improve the buying experience and reduce churn. Contact us today to find out how our solutions can help your business.
By DealHub | dealhub.io
