What’s the Difference?

Renewal Automation Vs. Auto-Renewals

Are auto-renewals and renewal automation the same? Absolutely not.

But since people often mix them up, let’s clear things up – and dive into the straightforward distinctions between these two critical elements of subscription-based models.

What is Auto-renewal?

We see examples of auto-renewal everyday in our lives as consumers from subscriptions like netflix and gym memberships. Basically, it’s a rule in your agreement that lets your subscription roll over to a new term unless someone says otherwise. If neither party cancels, the customer is assumed to agree, and the provider keeps providing services.

The Downside of Auto-renewal

Auto-renewal may seem like a straightforward solution and can work well in many scenarios. Enforcing auto-renewal for software or service contracts in a B2B setting might not be the best. It might seem like an easy way to secure recurring revenue, but if not done perfectly, it could harm customer relationships and your brand.

Things to consider when implementing auto-renewal:

Make sure your auto-renewal strategy doesn’t limit potential growth

Don’t allow your auto-renewal strategy to eliminate any potential growth. Ensure that your expansion strategy goes hand in hand with your renewals cadence. Consider whether there are opportunities to capture additional revenue (upsell, cross-sell, upgrade, refresh) and demonstrate further value to your customer. 

Beware of Automatic Invoicing

While auto-invoicing can make things easy for you – it can complicate things from the customer’s perspective – especially when decision-makers change and priorities shift. Automatically invoicing a customer can also add complications where budgets, approvals and PO’s are involved. 

Stay Connected Beyond Renewal Time:

Don’t be a stranger between onboarding and renewal. If your customer only hears from you during auto-renewal, why would they renew? Check if they’re getting value from your solution and if they see you as a trusted partner. If you enforce auto-renewals, ensure your customer success team maintains the relationship.

Prevent Payment Failures:

Implement a robust modern dunning system to recover payments if they fail. Without it, be prepared for involuntary churn, known as passive churn. This type of churn can contribute up to 50% of your total churn. It also brings in users who never intended to sign up, creating extra work for customer service and finance teams with chargebacks.

Consider Renewal Automation..

What is Renewal Automation?

Renewal automation is the process of digitizing workflows to engage users throughout the customer lifecycle and facilitate renewals with existing customers. Instead of communicating only right before the renewal or after a payment has failed.

With a combination of automated tools and processes along with strategically placed human off-ramps, renewal automation identifies and engages customers at optimal times throughout the customer lifecycle, which has proven to improve retention.

Benefits of Renewal Automation:
  • Boost Revenue: Drives additional revenue with higher renewals and cross-sell and upsell opportunities.
  • Fast Quote-to-Cash: Enables easy early renewals, which reduces time to cash.
  • Build Trust: Enhances your brand reputation by ensuring you touch base with every account no matter how big or small they are.
  • Digital Excellence: Provides a seamless digital interaction for customers.
  • No Chargeback Hassles: Digital tracks of every transaction means no more “I didn’t order that”.
  • Scalable Growth: Expand your business efficiently without needing to hire more staff.
When executed correctly, renewal automation should have include the following:

1- The renewal workflow should begin with retention marketing and progress seamlessly toward the renewal transaction.

2- It should aim to offer customers a smooth experience with built-in transaction functionality. 

3- Along this journey, include insights regarding new product features, promotions for additional beneficial products, and use the opportunity to upsell existing products, and expand licenses based on the needs of each customer. 

4- Strategically place renewal links throughout the workflow to make it easier to check out. Customers will be encouraged to renew early, minimizing churn risk and accelerating time to cash.

The bottom line – renewal automation should enable scalable growth without the need for extra staff. 

Where Should Renewal Automation Be Applied?

renewal-automation-infographic-renewtrak

Renewal automation is about finding the right balance between people, processes, and technology to manage renewals effectively. Too much automation could impact your customer relationships and too little will hurt your bottom line due to high costs. Below is a summary of key areas where automation should be applied within the renewals process:

Data Management:

It’s important to keep all data in one place, eliminate silos, and get a complete view of customers and sales because you can’t really improve what you can’t track or measure. But CRM’s are not built to handle the complexity of gathering customer, price-book, contract, and channel data. 

For Vendors, this can be even more complex, because as a vendor you’d want to get visibility into all the transactions in your channel. Implementing a renewals automation platform like Renewtrak, will solve a lot of these issues because once your CRM data is synced to Renewtrak all your renewal data will exist in one place making it easy to track for both vendors and channels. 

Channel Integration:

Renewal reps often spend a lot of time on follow-ups with vendors, distributors, and resellers, especially when handling quotes. To tackle the challenges of high volume and tight deadlines, they require a tool that reduces the need for numerous phone calls and emails associated with each quote. 

This tool should be part of a standardized platform where vendors and partners can securely and automatically exchange data. This way, renewal reps can save time, be more efficient, and swiftly move on to the next customer. Renewtrak does exactly that. 

Quoting:

Implement a renewals platform that allows for tasks that can be repetitive to be easily automated. Such as bulk updates on pricing and margins, and automatically generating order-ready quotes. This will save you and your time a lot of time, money, and effort.

Expansion:

Include expansion in your renewals strategy. Make it easy for your team to discover revenue opportunities within your existing customer base. With a tool like Renewtrak, upsell and cross-sell opportunities can be auto-generated and included with each renewal reminder. 

Instead of sending simple marketing emails, use our platform to send auto-generated, accurately priced quotes directly to customers or partners, increasing the likelihood of successful renewals and expansions.

Renewal automation isn’t without challenges. 

Going through the process of digitizing your renewal automation requires true buy in. In order for that to happen, you need to know you’re in good hands. You need a dedicated team with the expertise to guide you through the renewal transformation journey. A team equipped with best practices and a track record of assisting numerous companies, regardless of their size, on this transformative path. At Renewtrak, this is our specialty!