Update to COVID Renewals

Morgan Pottruff

There was a much earlier thread in April that asked about how people were managing renewals.

The discussion then as COVID took everybody by surprise was to avoid blanket discounts and do your best to triage things case by case.

Now that were a little further down the guantlet of 2020, how are you striking a balance from being sensitive to customers which have taken a financial hit during this crisis and looking to reduce costs, with protecting the revenue needs of your own company.

Daniel Harry

For me, this has been a fun puzzle to solve.

Instead of coming out the gate with discounts, we began to migrate to pushing out from Net 30 to Net 60/90 as well as offering semi-annual payment terms instead of requiring 100% payment up front. 
Much to our surprise, many of our clients were willing and able to re-up at the full price + annual rate increase so we learned to send out contracts with the normal pricing, but also preface the conversation with the potential to adjust payment terms. 

Where did you land on this?

Jordan Silverman

This has been extra unique for us as we are B2B SaaS software working in the hospitality business. Primarily with restaurants.

We made the decision back in March 2020 to not bill our clients if they were closed or struggling.

Quickly we saw our revenue cut in half and to date have waived almost $1 million in monthly fees. It has hurt for sure as we had to furlough staff temporarily, take pay cuts, etc.

But we have seen this pay huge dividends already. We ended up growing almost 30% in 2020 despite Covid and the waived monthly fees. We have brought our whole team back plus more and our customers are stickier then ever.

To me it is all about putting the customers short term needs first - showing you are a partner for your customers, and reaping the long term benefits.

I do realize that not every company and startup can do this, but if you can take the short term hit - I do believe the renewals and business will benefit.

Susan Maarup

@Jordan Silverman I think that was a very smart business decision.  I'm sure that it was difficult for your company both financially and emotionally with having to furlough your team, but the fact that you were able to relate to your customer's struggles really showed them that you are in true partnership with them and value that relationship.  That connection builds loyalty and loyalty leads to retention and growth, as those customers will certainly remember what you did for them during a challenging time.   

I can relate on a personal level as I was working in the hospitality industry when COVID hit.  Many of our customers were churning, not by choice but by necessity and although we lost millions of dollars in revenue, we allowed many customers to utilize their contractual obligations at a future date and time. In the long term it was a Win / Win for both sides.  

Congratulations on your success and for having the team back together!