End-Of-Contract Renewal Strategies

TAP CXM

7 Jun 2023

Enrich end-of-contract renewal messaging

Attracting new customers is only one part of a company’s growth equation. Customer loyalty often yields better ROI than acquisition programs, especially in industries with long sales lead times.

Retaining customers not only costs less than attracting new ones, but it also opens up opportunities to cross-sell and up-sell. For now, we’ll focus on customer retention. Customer lifetime value (CLV) is a hefty topic in its own right, although there’s a natural overlap between the two.

Anticipating your customer’s needs is critical to building loyalty

Customers don’t just want personalised experiences. They expect them.

Personalised marketing “punches above its weight”, as McKinsey put it in a 2021 report that found companies with mature personalisation capabilities generated 40% higher revenue from marketing activities.

When asked about personalisation actions, 67% of customers said relevant recommendations were important, second only to seamless customer experiences (75%). Tailored messaging ranked third (66%), with celebrating milestones (61%) and timely communications tied to key moments (59%) also ranking as top priorities.

TAP CXM helps global brands reach a first-name basis with customers. See how we work with some of the world’s best-known brands.

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What does contract renewal messaging have to do with personalised marketing?

End-of-contract renewal messaging refers to the strategies that engage customers nearing the end of periodic agreements, from free trials to 12-month contracts or longer.

It’s an opportunity to nurture existing relationships, reinforce brand loyalty and increase the likelihood of renewal. By tailoring communications based on individual customer preferences, needs and behaviours, brands can deliver better customer experiences and improve retention rates.

Our CXM consultants have been busy designing and implementing renewal workflows to help clients boost retention rates and build brand loyalty. In particular, our recent work has focused on the insurance industry, where retention rates are among the most pressing challenges for players of all sizes.

How to build an effective contract renewal communication workflow

Before lifting the curtain on contract renewal, we need to reiterate the importance of customer centricity. Customers respond to empathy. But they’re smart – they’ll spot a performative ploy from a mile away.

Be authentic. Create content with customers in mind, not revenue targets. Become the helpful partner, not the pushy salesperson.

It might sound counterintuitive for a financial services industry like insurance, but a human touch is significantly more effective than pressure selling.

1. Start with strategy

The first steps to any effective marketing activity are:

Defining clear goals
Aligning sales and marketing strategies

That way, the parameters and priorities are in place for marketing to generate ROI that contributes to business growth.

2. Get your ducks in a row

First-party data is essential for effective personalised marketing – or really any CXM activity. Implement a customer-centric marketing approach to plug data gaps and enrich customer profiles.

3. Identify customer needs

Conduct thorough customer analysis to segment customers based on enriched data. Segment based on preferences, pain points, policy usage and renewal triggers rather than relying on demographics.

4. Personalise marketing

Tailor messages and offers based on individual customer profiles, leveraging insights from customer data and past interactions. Test different messaging strategies and use the results to refine your communications.

Don’t forget to personalise the channel as well as the message.

5. Automate workflows

Build custom contract renewal workflows using a fit-for-purpose solution like Adobe Campaign to streamline the renewal messaging process, ensuring timely and consistent communication.

Ensure the workflows are segmented and adaptive. By that, we mean:

Use rules to allocate users to journeys
Listen for customer signals that inform next-best actions
Remove unnecessary steps based on existing customer data

6. Measure success

Monitor engagement and conversion rates using a test-and-learn approach to continually improve customer experiences.

The best tools for the job

Martech plays a vital role in improving end-of-contract renewal messaging. It helps organisations manage customer data, automate workflows, deliver dynamic content and measure engagement.

But tech alone isn’t a silver bullet. For example, martech can’t:

Express empathy (a big one for customer retention)
Create personalised content
Call customers who don’t read emails
Align organisational strategies (although it can enable sales and marketing alignment)

So before investing in new technology, it’s worth reviewing existing capabilities. In our experience, customer retention issues are much more likely to arise from inefficiencies in data management and strategy than underperforming martech.

Although these structural issues are trickier to solve, they’re significantly more valuable for companies and customers alike.

Don’t buy new martech without reading our guide to investing in better marketing.

Get the guide

The first-party data paradox

Personalised marketing depends on first-party data. First-party data comes from customer interactions.

It’s a little ‘chicken and egg’; sending irrelevant communications turns customers off, but you need touchpoints to gather data. We’ve found these strategies helpful:

Ask customers; send surveys, build preference centres, create choice-based experiences, include filters on content
Become better listeners; clarify the data you need and implement a way to capture it through customer behaviour signals
Integrate and associate; bring all marketing channels together in a central interaction hub, using clear rules to transform customer data into enriched profiles

Boston Consulting Group found that 90% of people are willing to share their data when presented with the right value exchange. So, our final piece of advice?

Don’t be shy.

Be strategic.