Are You Justifying Renewals?
The revenue engine behind most companies is renewal income. Be it a food delivery service or software, compounding renewals is what helps move up your bottom floor up year-over-year.
But the thing that many entrepreneurs don’t realize is that the process of selling customers on your product initially is different from selling customers on the renewal purchase. In theory, selling an existing customer should be easier than getting a new one, but only if you do it right!
Emotional Messaging vs. Validating Actions
I really enjoy the process of positioning a brand. It was my favorite part of running LearnDash, and I got pretty good at it.
What I enjoyed most is that it forced me to be creative, discover gaps in the market, and create messaging around emotional triggers that get people genuinely excited to make a purchase.
But if your product has a renewal (you should), the sales validation process is different. Specifically, you need to move from emotional messaging to validating by actions, and the best way to do this is by:
Making customer requested improvements to your product.
Effectively communicating these improvements.
Making continual improvements to your product is a given, but you should be thinking about two audiences with these efforts: new customers and current ones.
New functionality designed to bring in more customers is a natural part of any marketing strategy. To remain competitive in a market, you need to be current with the latest trends. This is where you use your intuition to develop (and position) your product accordingly.
Features that you develop for current customers are not a waste of time or effort. In fact, these kinds of releases are more beneficial than features designed solely for bringing in new customers. If you please your current customers, then they are more likely to give you that word-of-mouth marketing that companies dream of, and that is way more valuable than any paid ad campaign.
But aside from this benefit, creating functionality that your customers ask for is a surefire way to keep them around.
Look, there are an endless number of software solutions available today. Some are dirt-cheap, so competing on price isn’t going to get you anywhere.
What does get you somewhere is your responsiveness and willingness to hear out the use-cases of your customers, and then use those drive a portion of your development. This reinforces a customer’s initial decision to purchase your product (people hate to be wrong). It shows them that you are committed to them and their success.
You Need to Bring the Hype!
More important than anything (and I cannot stress this enough), you need to over-communicate what it is you are doing, specifically why it matters to your customers.
This is where most businesses get it wrong.
They listen to customers and develop “crowd pleasing” functionality, but then they suck at getting the word out about it. They fire off an email and that’s about it. I mean, if you do the bare minimum, then expect a bare minimum response.
While it’s not necessary for every release you do, at least once a quarter you should be building a robust marketing hype train with your new releases. Things like:
- Teasing the new functionality on social media with screenshots.
- Creating pre-release videos to share with customers.
- Working with your affiliates to notify them of the new functionality, why it’s good, and how they can spread the word.
- Doing live webinars to show the new stuff in action.
- Creating a release blog post and video(s) to show it all off.
- Holding post-release webinars to demonstrate further.
- Sharing case studies with the new functionality in action.
- Running re-retargeting campaigns.
- Having a limited time sale in conjunction with the announcement.
- Emailing people who didn’t open your initial email (several times).
- Contacting folks who let their license expire and give them a limited-time discount to jump back on board with your product.
Honestly, the above is just scratching the surface on what you should be doing. If you’re excited, that will get other people excited. You show people you are excited by making a lot of noise, plain and simple.
Keep your current customers excited, and they will reward you by sticking around.
The excitement you generate with your releases translates to new customers (because of the hype) but it also shows your commitment to existing ones.
When their renewal hits, they’ll remember that you keep giving them a return on investment. You’ll be giving folks FOMO if they don't renew. People who let their account expire will jump back on board (you should be emailing old customers about the exciting stuff you’re doing).
You need to over-communicate.
You need to beat your own drum and never stop.
Remember that you are competing with an infinite number of other options out there — it pays to be the loudest one in the room.
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