31st March 2017
5 Ways Digital Channels Can Help You Increase Customer Renewals
Back in 2012, I bought myself a new phone. I was on a sim-only contract with my network provider, and I bought the phone outright from an online retailer. After spending a few hundred pounds on a new phone I was feeling a little paranoid about damaging or losing it, so I took out a policy with a gadget insurance company.
Fast-forward to 2016 – exactly a year ago, in fact – and I replaced my phone with a new one. I was still on a sim-only contract, so I bought a phone outright again and needed to transfer my insurance from the old phone to my new one. However, when I called the insurance company I was surprised to discover that my contract had expired, I wasn’t insured at all, and I had received no notification to let me know about this and give me the opportunity to renew.
There are a couple of things wrong with this picture. Firstly, I didn’t even realise my contract had expired, so if I had broken my phone I would have called them up only to find that I wasn’t even covered. People are forgetful. We have to renew so many things these days – car insurance, car tax, home insurance, phone contracts, TV streaming services – the list goes on. We can’t always remember the dates for everything without a little reminder, and I was blissfully unaware my contract had run out.
Secondly, why wouldn’t the company want to get in touch with me to renew my contract – if not for my benefit, then for theirs? I had been a customer for a while, and I would have been perfectly happy to renew. Did they not want to take my money for another year? Where is the business sense in allowing contracts lapse like this without contacting the customer and trying to secure a new sale?
There are so many ways to reach out to customers now, there really is no excuse for not reminding them to renew their contracts with you. Aside from a good old fashioned letter or phone call, the internet offers many different ways to remind your customers to renew. Here are a few ideas:
1. Email Reminder Campaigns
An email reminder is fairly standard practice, but you have more options than simply sending one email. You need to think about how many reminder emails you’re going to send, and how early you’re going to send them. Obviously, you don’t want to wait until the day the contract expires, but how far in advance do you want to contact the customer? A couple of months, perhaps? Having people renew early is great for you because you make money sooner, and it’s good for the customer as well because they can get it out of the way. You could also offer an incentive for people to renew early.
Sending an early email gives you an opportunity to send more than one reminder. For example, if you send an email two months in advance and the customer doesn’t respond, you could send another reminder a month later, and then again two weeks later, increasing the sense of urgency each time. You could also tailor each email based on any action the customer has taken. If they clicked on a link in your first email but didn’t renew, your next email could acknowledge this and ask them if they forgot to renew, or if they have any questions or would like to consider other options, such as different contract lengths. You could even personalise these for each customer based on their previous purchases. Your customer may be on one of your most expensive tariffs but hasn’t used your services for a while. Maybe in this case you could send them some suggestions for cheaper tariffs that are more tailored to their needs. This shows you’re paying attention and that you care about the individual customer, making them more likely to renew and possibly recommend you to others.
2. App or Website Notifications
If your business has its own app that your customers use, you could use this to send notifications to the customer’s phone reminding them that their contract is going to expire. Or if they have an account on your website and they log into it regularly to use your services, you could add a renewal prompt to the homepage.
3. Cross-channel Targeting
Email, your website, your app, text messaging, or even social media can all be used to send your customers a gentle reminder. The trick is knowing where your customers are and what channels they use – and aligning them so that you are messaging them strategically. However, you don’t want to bombard your customers, and if they do renew, you need to ensure that the reminders are no longer sent to them and that they stop across all channels.
4. Make Renewing Simple
Once you have contacted the customer, the next step is to make the process of renewing as easy as possible. You don’t want to throw up any roadblocks that might make the customer change their mind about renewing. If the customer can renew online, make sure it is easy to navigate to the correct page on your website, and that any links in your email marketing take the customer straight to a dedicated landing page. The landing page should provide all the information the customer needs in order to decide whether they want to renew, and show any relevant options so that they can amend their contract if necessary. Forms should be as short as possible so that the customer doesn’t have to put too much effort into renewing.
When the customer renews, you could suggest easier ways for them to renew next time, and these could benefit you too by improving customer retention. You could offer to switch people to rolling monthly contracts so that they don’t have to think about renewing annually. Or set up automatic renewals so that the next annual payment is automatically taken – but make sure you let people know before the contract is due to renew so they can cancel if they want to.
5. Ask For Feedback
The worst case scenario is that your customer does not renew and you don’t know why. You’ve sent out reminders but they haven’t renewed or gotten in touch with you, and now the expiry date has passed and you’ve missed out on a sale. Did they forget? Are they not interested in your service anymore? Was there something they were very unhappy with? Would a different service or subscription have suited them better?
If someone doesn’t want to renew, it can be very helpful for you to find out why so that you can improve your services in the future, and you can make this part of your email strategy by asking the question in your final reminder email. This gives you the opportunity to put right anything that might have gone wrong, or offer a different contract to the customer that is more suited to their needs.
Contract renewals provide you with predictable cash flow, and they keep customers like me happy and informed. However you decide to approach renewals, don't do what my phone insurance company did, which was precisely nothing until I called them! If you’d like some help with anything we have discussed here, get in touch with SilverDisc.