The annual renewal model is the new standard for vendors in the Microsoft 365 space. But what’s the best way to go about streamlining the renewal process? And how far in advance should you begin talking to your vendor about renewing the contract?
In this episode of P2PNow, we’ll go over best practices for handling vendor renewals and tips for timely communication. Watch the session below or read on for a full transcript!
Christian: Today’s episode will be how to handle renewals with a vendor. So Sam, we’re speaking specifically about annual software renewals, correct?
Sam: That’s correct! Many vendors are switching to an annual renewal model for their customers. Monthly renewals are a bit of a different animal. Vendors will typically have a pretty specific process for how they handle annual customer contracts.
Christian: Right. Isn’t it as easy as just ensuring that the quote for the renewal is signed by the customer before the contract expires?
Sam: Actually, it is that simple. But without a structure in place to be proactive you can quickly find yourself overwhelmed with paperwork, especially as business begins to pick up.
Christian: Fair point. So what recommendations do we have to help partners avoid the paperwork overload?
Sam: Two words: Start. Early.
Now, if you’re an MSP and have a solution bundle, you may know very early on if a customer is renewing the entire package. Other partners may handle renewals more ad hoc.
At AvePoint, we really recommend starting the conversation of renewal at least 60 days in advance, especially if there needs to be any additional funding requests. The process may need even more time in those cases.
Assuming the funds are already allocated, 60 days is a safe time to begin measuring intent.
Christian: That’s a pretty simple timeline to remember? How much time should the partner set aside to actually get the contract signed?
Sam: We recommend sending the renewal quote to the customer at the very least 30 days in advance. Even if the customer intends to renew, there is probably some sort of signing process involved. You’ll want to ensure you give the customer enough time to get this pushed through, which will also avoid unnecessary pressure from the vendor.
Keep in mind that vendors have to report renewal metrics internally. Communicating with your vendor point of contact about renewal status on a regular basis can really make things easy!
Christian: Yeah communication is indeed key! So:
- 60 days – start the renewal conversation
- 30 days – send the renewal quote
Sam: Yup! Simple and easy to remember. We could go into a lot more details about Cross Selling and Upselling during renewals, but we’ll save that for another segment!