We were facing a renewal of a major equipment services contract with a national vendor. Let’s call them Koncorp. Before bidding it out, we decided to start with Koncorp and give them the first shot at the renewal. We had not called for service in a long time since the product was very stable; they were getting nearly free money. We were clear up front that this was a chance to keep us from bidding it out, but they managed to drop the ball in every way.
Let’s walk through how not to retain a current customer at renewal time:
• They did not approach us before renewal, we had to actually hunt for them.
• They could not provide an accurate schedule of current contracted services. We had it, but I always ask for that first from the renewing vendor and they had no current records.
• We told them we wanted to evaluate the platform and plan for the future. Instead, they did not ask for projected needs, only emailed us a pricing sheet (list price, no discount, which was higher than current pricing!) for what we already had.
• They showed up unannounced at our offices and demanded a meeting. The rep actually left me a voicemail at 11:40am telling me to call him if I did NOT want his entire local office team to show up at my office at noon. Yes, he wanted me to call if I didn’t want them to show up without an appointment in 20 minutes. They then gave our receptionist a hard time for not hunting me down or letting them into my suite. She did her job well in keeping them at bay.
• When I expressed dismay at all of the above to their local management, the account moved from my local rep to a national call center. I was demoted by the vendor since I was not a quick and easy renewal win on their terms.
Needless to say, they were eliminated from consideration and we moved the business to one of their major competitors. The irony is that the competitor is charging me more than Koncorp, but also upgraded the services because they identified my new, real need. The competitor showed me greater value and met my needs.
The cost of new customer acquisition is massive. Renewals are relatively inexpensive and a measure of your product and service. However, renewals should never be treated as automatic or a low effort revenue. Know what you are providing and show how you can add more value. Start the renewal process well in advance of the contract dates by meeting and planning with your client. “Blend and extend” your contract if you can into the renewal – don’t give them the chance to wander. As importantly, respect the renewal process – woo me like a new customer during the renewal.
I simply want to know you still care about my business and still respect our relationship.