How Personalization Transforms SaaS Renewals and Drives Customer Retention

For SaaS organizations, customer retention is the lifeblood of sustainable growth. SaaS churn rates have surpassed all records in the past year, with a 7% increase in MRR churn from December 2023 compared to the previous year and a 25% rise compared to December 2021 (ProfitWell B2B SaaS Index). Discovering effective renewal strategies is crucial for long-term success. As competition intensifies, renewal leaders must adapt their approaches to ensure continued value delivery and maintain strong customer relationships.

I first recognized the need for a more personalized approach to Customer Success when working at OptimalPlus. When Emerson acquired NI in 2023, I had the opportunity to take this to the next level, overseeing renewals for 35,000 customers in a manual process. By onboarding an automated renewal platform, we increased retention rates by 15 points. I also helped shape renewal teams and processes to emphasize personalization. Here are three proven practices that dramatically improved customer retention. While each pertains to different stages of the customer journey, they all center around one key principle: personalization.

The Challenge of Renewals

Why is it so difficult to keep customers engaged? In my experience, the main challenges include:

• Not truly knowing your customer: It's crucial to understand the customer's business health, where your customer is in their product journey, What are their pain points, What features are they using—or not using. Without a cohesive view of the customer, you might miss valuable opportunities for engagement.
• Scaling with a limited budget: As organizations are pressured to serve more customers with fewer resources, automation becomes essential. However, even as you scale, maintaining a personalized and human touch is vital.
• Breaking down silos: Renewals shouldn’t happen in isolation. Integrating cross-functional data and collaborating with technical support, sales, and other departments can uncover new upsell and cross-sell opportunities.

The Need for Personalization in the Renewal Process

In light of these challenges, my team developed and tested three best practices to help renewal managers leverage the power of personalization. 

Practice #1: Personalized Mid-year Check-ins

Using both internal and external sources to create a holistic view of your customer is essential for success. Some tactics that have worked for me are following their key stakeholders and monitoring what they post about, or even checking their financial picture. You can also look at your internal data and analyze the customer’s usage, technical support cases, bugs and more. Then, craft 2-4 specific data points that you can leverage during a mid-year check-in. You can say, Hey, I know you're going through a tough time. Here is a special discount, or I can give you 10 users for free for the next 12 months. Or if you’ve found that he is moving to a new business function, you can propose a demo or a free license for a product that he can use in his new vertical. If your data shows that his usage is not as you’d expected, you can offer training credits to improve engagement.  Then go one step further: don’t just offer the discount, the extra license, or the training credit but actually deliver it within the platform. Act as the lever to propel your customer forward. But keep in mind that the timing for this check-in is important: you want them to have gained experience using your software but try not to get too close to the renewal period that they think you are reaching out to sell.

Practice #2: Personalized Renewal Experience 

It is important to translate these insights into actions that are part of the renewal process. Ideally. I found out that the most effective is to bring personalization into renewal platform automation flows. Picture this: three months before the renewal, a renewal automation workflow kicks in and your customer gets an email. Instead of being generic, the messaging should be as personalized as possible by mentioning the insights you have uncovered: the difficult finances or the new product domain. Another thing to mention is usage. If they are using it to the maximum, they may want to add users, or if there is a decline, you can offer help, or you can acknowledge that they lost a power user, or you can mention a technical issue that was satisfactorily resolved. This is also the place to mention that you have given them a three-month period license fee of charge or the training credit. In addition, as part of your renewal automation flow (we adopted RenewTrak for renewal automation), you can provide options relevant to the key insights you shared in the email, e.g. upsell, cross-sell of new products to pilots, training credit, and more.

Practice #3: Value Mapping for Key Accounts

During a customer Quarterly Business Review (QBR), executives want to understand how you –as a vendor– deliver value to their business, but even more importantly, they want to learn best practices used by their peers/competitors. But gathering and analyzing this data is time-intensive and time-consuming. To address this, we developed a white-glove service for key accounts, using a value-functionality matrix to optimize client positioning and identify improvement areas. This approach enables us to provide our customers with valuable benchmarking insights: where they are best-in-class, average, or need improvement. For example, we guided a customer entering a new market with learnings we gained from other customers playing in this domain, a huge value add for them. We also guided a fast-growing customer with on-prem solutions to move to a cloud-based deployment, saving them significant data center costs and improving the overall performance and customer experience. By leveraging data-driven insights, we enhance our value proposition and position ourselves as strategic partners in our customers' growth journeys.

The Future of Personalized Renewals

The future of personalized renewals in SaaS lies in the power of data integration, analytics, GenAI, machine learning, and automation. While our value mapping project provided invaluable insights for key accounts, it was unable to  scale to our average customers simply because we didn’t have enough people to do the manual analysis it required. However, emerging solutions from new innovative companies promise to automate data collection and insight generation, allowing renewal managers to focus on customer engagement. These AI-driven solutions will arm us with the data we need, offering tailored recommendations for upselling, cross-selling, and mid-term strategies, for different stages in the customer journey. AI can also overcome human limitations and allow us to extend renewal strategies beyond just the top accounts to the entire customer base. Ultimately, AI-powered personalization will not only scale our operations but also accelerate sales, changing the way we approach customer retention and growth in the SaaS industry. These capabilities will also help to focus the “human touch” on trust and relationship building instead of on mundane, repeatable tasks.

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About the Author
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Sharon Shafran is a customer-centric and transformational leader with a proven track record in leveraging emerging technologies like Machine Learning within SaaS and B2B domains. He established Customer Success at NI, revolutionized their renewal process, and has been instrumental in driving innovation and solving complex problems across his career.