Managing Renewals in Latin America
Managing renewals in Latin America is different from the United States
Traditionally, SaaS vendors sell their solution using an Account Manager directly from the USA or locally in the country and/or use a local partner to resell the solution. RFPs, demos, references, approvals, negotiation with business users and legal, and of course, dealing with the purchasing department to understand the contract, purchasing and invoicing process are all components of the long sales cycle. All the good stuff, no? Discounts, currency, payment terms, the bill to and ship to are defined and premier support are also part of closing the deal. Wait but there is more! Tons of politics and nuances that you have to deal with regarding taxes and regulations. But in the end, the deal is signed.
The purchase order is sent, an invoice is processed, the software is provisioned. And all of these took a team of dedicated resources from the vendor, partner, and customer to make it work. And your partner and customer start the implementation and the software contract renews in one year. You are done! You met your quota! And you move on to the next new deal.
From the vendor perspective, you also have some onboarding process and/or a customer success manager looking into the account. The implementation has many ups and downs like any software implementation. You manage to upsell a few options to the account. Customer is happy, but sponsors and power business users could still play a big role, or they move to other areas of the business or leave the company. The exchange rate changes. The dollar is up and local politics in that country are no longer the same for good or bad, and, the local economy is not doing well that year. Budgets need to change.
Well, you get the picture, no? Then 30 days before the renewal, you have a Renewal Manager calling from the USA to renew the contract and to remind the business that there is a 10% increase in the renewal per the original contract. Do you think you are going to renew in the next 30 days? As you can see, this is the typical New Business vs Renewal process that many USA based vendors have when dealing with renewals in Latin America.
Renewals should be part of any account management process. Renewals should be considered a sales process, where your main focus is the success of the customer, understanding and anticipating any issues from deployment to current budgets and from local economic conditions to up-selling software. This needs to be part of a win-win process between your local partner selling to the customer and your account rep. Not somebody thousands of miles away managing just renewals. So, here are a few tips you should consider to manage renewals with your customers and partners in Latin America.
Right after closing the deal create an onboarding process to educate the Purchasing Department about your renewal process. Use emails, webinars, infographics, and blogs to provide educational and legal content in Spanish.
Plan at least two 1to1 sessions during the first year with your Partner, the Legal Department, the Purchasing Department, and your account representative to discuss issues, roadblocks, and content regarding the renewal process. Make sure your Renewal Team understands all the local issues ahead of time.
If possible make the renewal process part of your customer success and/or sales process. Provide incentives to the account representative. Have the renewal team report to the account representative. This will be the most challenging thing to do in any SaaS organization since many of them have different quotas and compensation plans based on new business and renewals.
Let the local partner manage all the sales process for the renewal team. Focus on facilitating the process and content to the local partner. The local partner has been already in the account for a year implementing, supporting the customer, and helping you provide up-selling opportunities. Also, keep in mind that many local partners use the renewal margins as part of their business model. Don't take this renewal process away from them, by taking away the renewals from your partners it will create friction and you can lose trust with the customer.
Teach your renewal team about the local laws, types of companies, rules, and regulations. The more they know about each country and company the better they can collaborate internally, including the customer and/or local partner. Having a local renewal team will help a lot, but if not, make sure you have resources in your USA based team that can speak and write Spanish.
Have the list of local official holidays. It helps to know when to call the Purchasing Department or your business sponsor for the renewal. Google Calendar has some good options to show holidays per country in Latin America.
Use LinkedIn or Google Trends to follow news about the customer, the industry they are in and local news about the country and/or region. All content helps somehow when dealing with negotiations. You need to understand their perspective.
Hopefully, this list will help you think about how you manage renewals in Latin America. Just consider some flexibility and start six months earlier when dealing with renewals.
If you are a SaaS vendor exploring the option to enter the Latin American market go to CX2Advisory. We can help!