Getting customers to pay up-front for a year is great… the challenge comes 12 months later at renewal time. There are four ways to do renewals, but only one right way.
This came up on a recent Clarity call with a SaaS founder, and since annual pre-payments are often the go-to funding source for many early-stage B2B SaaS companies or those bootstrapped companies - regardless of stage – that have chosen to forego any serious external funding, I thought it was important to discuss publicly.
While that up-front money from annual pre-pays is great, when it comes time to renew those customers, well, that’s where things get tricky.
I’m going to help you make that less tricky.
First, let me take a quick step back and cover a couple of basic ideas.