Industry average performance is not good enough. To maximize support and maintenance contract revenue you need a clear picture of your current situation or a plan to understand and mitigate attrition.
Why Customers Don’t Renew
There are many reasons why customers choose to cancel their service relationship. The most common reason for cancelation is that they do not perceive that the benefits outweigh the cost of continuing the service. Or, they do not feel that the risk is too great to cancel – this is a common perception by customers that use mature products. The least likely cause of customer cancelation is poor service quality.
For customers that cancel because they did not see the value in your services there is still hope for a win back. If these customers are still using your product re-engage them and attempt to convince them of the benefits of your service. You may learn a lot about why customers canceled in the first place (price, lack of use, etc.). Consider making modifications to the service to make it more appealing.
Within your active customer base chances are good that you have customers that would like to cancel but are not willing to accept the risks associated with lack of service or out of date software. In these situations, there is still time to protect the relationship. Work with customers potentially at risk to help them see the value.
The second most common reason for service cancelations occurs when customers stop using your products. Once this occurs – for whatever reasons – there is little to do to win the customer back. The best strategies to minimize cancelations due to lack of use is to develop good onboarding, adoption, and success practices to make sure customers can use and apply your products effectively.
Keep the customers you have and find ways to prevent customers from canceling services in the first place. Retention is paramount – make it a strategic priority!
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