Sales Renewal Strategies: A Framework for Increased Retention

Winning Customer Renewals with a Messaging Framework

Provocative messaging works wonders—except when it doesn’t. Among the exceptional scenarios are sales renewal strategies, where marketers and sales professionals need to have a compelling answer to the question that’s top of mind for your customers: “Why Stay?”

When you’re the outsider trying to move buyers off their current situation, a disruptive message is effective—research proves it. But a recent Corporate Visions study revealed that provocative messaging isn’t universally applicable. In fact, when you’re the incumbent and trying to secure a renewal contract, this messaging approach could actually backfire.

Sales Renewal Strategies Study

Corporate Visions, in collaboration with Dr. Zakary Tormala, a social psychologist with expertise in messaging and social influence, built on previous findings that reinforcing the causes of the “status quo bias”—preference stability, anticipated blame/regret, perceived cost of change, and selection difficulty—gives you a statistically significant advantage across several areas critical to winning sales renewal strategies.

The follow-up study set out to answer: Is there a specific renewal messaging framework that’s best suited to reinforcing the status quo bias and encouraging customers to renew with you?

Turns out, there is.

The studies confirm that you need to reinforce the four causes of the status quo bias to tell the most compelling renewal story:

• ​Preference stability: Remind customers of the long, hard process they went through to make their original buying decision. This reinforces their natural inclination to keep preferences—and decisions—stable.
• ​Anticipated regret and blame: Humans anticipate regret and blame before it happens, which can impede change. Remind customers of the time and resources invested in ramping up the solution, onboarding, managing changes, and achieving smooth implementation. Changing now exposes them to potential failure points and blame.
• ​Perceived cost of change: Change is perceived as riskier and more costly than staying the course. Walk customers through the startup costs that have been returned through improved performance and are now part of the ongoing operating budget. Confirm that change costs more than staying the same.
• ​Selection difficulty: Making the choice to change is harder when there’s little difference between the current situation and alternatives. Admit that most other solutions offer similar capabilities, that offerings haven’t significantly changed since their original purchase, and that you’ve kept customers apprised of market changes. People are less likely to consider change if they don’t see contrast between alternatives.

The overall findings reveal that documenting results at the outset of your renewal message (before affirming that you continue to be the right choice) and providing more explicit detail about your progress will give you significant messaging advantages in:

• ​Minimizing switching intentions
• ​Increasing willingness to pay
• ​Improving trust
• ​Enhancing perceptions of quality

The Winning Sales Renewal Messaging Framework

Below is the basic marketing message framework of the winning sales renewal strategy, which tested four different renewal messages (varying in structure and level of detail) aimed at convincing business partners to remain with their current 401k provider. The parts of the framework correspond to the four causes of the status quo, which the renewal message sets out to reinforce.

Our Framework

• ​Document Results: You have made great progress on your goals over these last two years. You’ve seen 401k participation grow from 20 percent to 50 percent. Your employee satisfaction scores are up, and some employees have even thanked you for the changes you’ve made. In addition, your employee retention rates have started to improve, which was the ultimate goal of making these changes.
• ​Stabilize preferences: When you signed up two years ago, you did your homework and looked at many options before getting your entire team to come to a consensus and choose our company. It was a long process involving many people, but you ultimately made a big decision to bring this program on board.
• ​Anticipate Regret/Blame: As you look at making a renewal decision, it’s important to realize that you are at a critical point in this journey and that maintaining momentum is key to achieving your participation and retention goals. Any change to the program now could create unnecessary risk of losing the positive gains you’ve made.
• ​Mention Perceived Cost of Change: Bringing in another vendor would require you to invest time in getting them up to speed and money on implementation costs and other changes that you won’t have to spend if you continue working with us.
• ​Reinforce Selection Difficulty: We’ve continued to update and tweak your program over the last two years to ensure you are keeping pace with anything else available in the market today. Specifically, you will get two new features designed to help improve your goals of employee participation and satisfaction:
  • ​The first is a monthly report that shows how many tax dollars your 401k participants saved versus those who aren’t in the 401k. You can share this with your employees monthly to encourage participation for the tax benefits.
  • ​Second, we’ve added a new smartphone app with retirement planning calculators and budgeting tools to help your employees make more informed decisions and feel like they’re making progress on their goals.

You’re making great progress. Stick with our program for another two years, and you’ll get to your 80% participation goal and further increase your employee retention rates.