When SaaS renewals are done right, improving your NRR (net revenue retention) is easier. NRR is the retained and expanded recurring revenue from your existing customers. It considers fluctuations related to factors like: 

• Expansion revenue (Upselling or cross-selling) 
• Churned revenue (Cancellations or downgrades)

But, the possibility of renewals going wrong becomes higher when manual processes are involved. Missing renewal emails, chasing outdated payment details and time delays due to manual tracking can become part of a bigger problem. 

This is where automated SaaS renewals can help you out. In this article, we’ll discuss SaaS renewals and their automation in more depth. 

Why Should You Automate SaaS Renewals?

Renewal automation is just for saving time. It’s important for the financial health of your SaaS business. Here’s how: 

1. Reduce churn

Manual renewals can contribute to involuntary churn that may occur due to payment failure, expired credit card or customer inaction. 

With proactive reminders, automation can help you reduce customer churn. Seamless payment processing and dunning management also contribute towards reducing customer churn. 

2. Increase upsell and cross-sell revenue

Automation helps you integrate upsell and cross-sell offers into the renewal process to help your customers see the value of upgrading with ease. 

Renewal automation frees up valuable time and resources for your sales and CS team. They can focus on two important aspects: 

• Spot chances to build better relationships with customers instead of chasing renewals.
• Identify opportunities to upsell and cross-sell to grow the revenue.

3. Improve customer satisfaction

You don’t want customers to feel hassled going through the renewal process.

An automated renewal process eliminates the frustrations and helps you leave a positive impression on the customers. A seamless experience fosters customer loyalty as a result. 

4. Get paid on time

Automation helps you get accurate invoice payments on time. You can integrate a payment gateway to charge customers automatically based on their preferred payment methods. It reduces the risk of late payments and revenue leakage. 

Key Steps to Automate Your Renewal Process

SaaS renewal automation requires a five-step approach: 

Step 1: Assess your current process 

Document your current process to look for the inefficiencies and bottlenecks associated with it. This will serve as the foundation for your new automation process ahead. 

To begin, map out your current renewal process from start to finish. Visualize various touchpoints and identify areas for improvement. Consider factors such as: 

• Areas for automation: Find repetitive and time-consuming tasks that may also be prone to human error. 
• Inefficiencies and bottlenecks: Recognize if specific stages consistently cause delays or frustration for customers. 
• Manual data entry: See the extent to which data your team manually enters data. This way, you can evaluate the potential for errors or inconsistencies.
• Customer communication: Identify the effectiveness and efficiency of your current communication method with customers for renewals. 

Step 2: Choose the right tool 

Now, it’s time to choose the right tool for automating the renewal process. You need a comprehensive platform that will simplify how you manage the whole renewal process. 

Here are some key capabilities that you need to make an ideal choice:

• Automated renewal reminders: Give your customers a heads-up with automated alerts way before their subscription runs out. Being ahead of the game helps cut down on forgotten renewals and enhances customer satisfaction.
• Seamless payment processing: Integrate popular payment gateways to make the payment process a breeze for customers doing renewals. Customers must have the ability to securely update their payment information. With saved information, you can automatically process on the renewal date and remove manual intervention.
• Auto-renewals: Auto-renewal settings automatically renews subscriptions without any action required from the customer. This convenience factor can improve retention rates and reduce churn.
• Upselling and cross-selling: Having upsell and cross-sell opportunities in the renewal process can contribute towards potential increase in revenue. 

Step 3: Design your renewal workflow

Now, map out the entire renewal process. You have to get into specifics here. It includes the complete cycle from initial communication with the customer to successful renewal and follow-ups. Here's an example of a good renewal workflow:

Renewal Reminders

• Initial notification: Send an automated email or in-app notification to customers. Share the upcoming renewal data and give clear instructions on how to renew. 
• Follow-up reminders: Use follow-up reminders tol send at specific intervals. (e.g., 15 days and 7 days before the renewal date) 
• Final reminder: Shoot off one last nudge to highlight the need to act fast and what they'll miss out on if they don't renew.

Payment Processing

• Update payment information: Offer a secure method to let customers update their payment details.
• Opt-in for auto-renewal: Give subscribers a choice to sign up for automatic renewal when they start their subscription or any time it's active.
• Automate payment processing: Use the automation software to handle payments during renewal based on customer's preferred payment method.
• Payment confirmation: Email customers to confirm their payment went through when their subscription gets renewed.

Upselling/Cross-selling

• Identify offers: Use customer data to find relevant upsell or cross-sell opportunities based on their usage pattern. 
• Provide personalized recommendations: Provide personalized recommendations to customers based on their needs and preferences.
• Focus on seamless upgrade or add-on: Let customers upgrade their subscriptions based on their interests with less effort. 

Step 4: Track renewal data and optimize

Now with an automated renewal process in place, track the relevant data to see how well your strategies are working. A few key metrics help you make decisions regarding the effectiveness of the renewal process. These essential metrics include: 

• Net Promoter Score (NPS) works on a single survey question. It asks respondents about the likelihood that they would recommend a company or product to others. It helps you measure customer satisfaction and loyalty. 
• Customer Renewal Rate. You can use this metric to calculate the percentage customers who renew their subscriptions. 
• Time Spent on Renewal Process is a metric used to monitor the time and resources required for the renewal process. You can calculate the time before and after automation to quantify the efficiency gains.

Use subscription management software with powerful analytics and reporting capabilities. It will help you understand the trend related to usage patterns and renewals for better decision-making. 

Identify your optimization efforts using the data to identify trends. Look for correlations between specific customer segments or product offerings and renewal rates. This information can help refine your approach and tailor your strategies to different customer groups.

Completely Automate Your SaaS Renewals with Cacheflow

Cacheflow can manage and automate the whole renewal process with reminders, payment processing, built-in price increases, and more. 

Experience the difference automated renewals brings to your process and how they contribute to growing your SaaS business.