5 KPIs to Manage Your Renewals Team

Assessing the health of your renewals program can be challenging. Although you may see your bookings come in, are they translating into good renewal rates and sustainable growth?

To ensure you manage the workload of your renewals team and reward their performance appropriately, there are a few KPIs to keep your eye on:

KPI 1 - On-time attainment rates

This metric looks at whether the renewals are coming in on time or after the expiry date. It is calculated relative to the total opportunity size for a given period. While, it’s not unusual to see carryover or expired renewals coming in the month after the due date, in an ideal world the more that get processed on-time the better it is for the health of your renewal program and workload for your team.

Depending on the tools you have available, you can measure the percentage of on-time, versus carryover versus early to monitor where time is being spent and to help prioritise future workloads. For example, if your carryover queue is growing, it is likely that you need to re-allocate or re-focus teams on closing out old quotes before processing early or even on-time ones. For tips on boosting your on-time renewal rates, check out this blog.

KPI 2 - Bookings rate

The backbone metric of any renewals program, bookings rate is an indicator of whether you are going to meet your monthly or quarterly targets. Although, it’s important from a sales and variable compensation perspective, we recommend not reviewing bookings rate in isolation and to combine it with the others listed.

KPI 3 - Resolution rates

Resolution rate measures the extent to which the renewal opportunities are able to be resolved within the specified opportunity period. It can also be known as a coverage rate and offers insight into how well the opportunity pipeline is being addressed by your team. The higher it is, the more inquiries and opportunities that are being looked after, which can influence customer satisfaction metrics as well as lead to growth in the renewal pipeline. For example, with more opportunities being covered, it is likely to translate into better cross-sell and upsell revenue.

KPI 4 - Close rate

Close rates are an important indicator of renewal cycles. Measured as renewed opportunities divided by total opportunity size, low close rates can highlight blockages (for example if a vendor takes days to approve a quote) or a lack of follow-through by internal or channel teams with the customer. A good close rate demonstrates an efficient renewal cycle and shows that your teams are successfully promoting the value of the renewal.

KPI 5 - Cancelled/Lost Rates

Inevitably not every opportunity will renew. Regardless of whether the renewal is cancelled (could be due to data or duplication issues) or lost (could be because the company has gone vendor-direct or it’s been lost to another reseller), it’s important to monitor these rates. A sharp increase in cancelled or lost rates may indicate an underlying data problem (eg data from your ERP system) or that there is a problem with the way the process is being managed by your renewal teams, which may warrant further investigation.

Also, depending on whether you have the functionality available, lost renewals can be captured and auto-added to a win-back campaign. This allows your team to be notified to re-quote the opportunity when it falls due the following year.

These rates provide strong indicators into the health of your renewals programs and will translate into strong under-contract rates (iasset.com) and renewal rates. They will also help you prioritise and allocate activities to your team. It’s also important to review performance at the team as well as the individual level. Generally teams that are working well together produce better statistics overall.